Cannabis and Coronavirus: The Industry Responds to Increased Demand

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PHOTO: Ilovephoto_KA/ Shutterstock.com.

WASHINGTON, D.C. – As the novel coronavirus, which causes the respiratory disease COVID-19, creates unprecedented chaos around the globe, American cannabis businesses are adjusting to guidelines issued by the Centers for Disease Control (CDC) and the World Health Organization (WHO). In this “new normal,” never-before-seen measures have brought whole countries to a virtual standstill as millions stay home to honor guidelines for social distancing.

But for some cannabis businesses, a surprise silver lining may be emerging from the epidemic’s perfect storm. In several cities where cannabis is legal, local officials have allowed cannabis retailers to continue sales under the rationale cannabis is an “essential item” much like food and traditional medicine.

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So far, New York and the San Francisco Bay Area have granted dispensaries essential status, while other cities grapple with guidelines in their states. In West Hollywood, California, legal cannabis shops have remained open while exercising virus safety protocols.

“Monday, when San Francisco learned we would be on ‘shelter in place’ orders, our stores got incredibly busy,” said Eliot Dobris, spokesperson for The Apothecarium, which operates three Bay Area stores and one location in Las Vegas.

“The lines were long, and people were stockpiling,” he told mgRetailer.

By Tuesday, like other city retailers, The Apothecarium closed its doors for what Dobris thought might be the duration of the virus shutdown. But then city officials changed their minds and granted dispensaries essential status due to an outpouring of consumer’s messages on social media, via phone, and in emails.

“People are very concerned about being without,” Dobris said. “Not everyone has the financial ability to stockpile or time to stand in line for hours, especially those with medical conditions or the elderly.”

He added most customers were interested in purchasing dried flower, as well as inexpensive items. With no end to the crisis in sight, some consumers may anticipate decreased income during the unexpected work stoppage, which could encourage them to stock up while they have the funds.

As of Thursday, Dobris said Bay Area The Apothecarium locations would remain open for the foreseeable future, complying with safety practices recommended by the U.S. Centers for Disease Control and Prevention and other public health organizations. In order to comply with social distancing recommendations, he said customers may place orders online and pick up their products at the stores. Limited numbers of customers will be allowed into the store at any given time, and store staff will sanitize public areas at night.

The Apothecarium’s Las Vegas location remains open, but is restricted to delivery and pick-up only. The store is scaling up delivery services, though, to answer customer demand.

In New York state, Governor Mario Cuomo declared cannabis an essential item on March 13 when he rolled out the measures his state is taking to curb one of the worst outbreaks in the country.

In Michigan, the latest state to legalize , advocates and consumers requested Governor Gretchen Witmer classify cannabis as an essential item, allowing dispensaries to stay open. They also requested doctors be able to issue prescriptions by phone, if necessary, so patients may continue to access cannabis medicine.

In California on Monday, more than seventy industry members and the California Cannabis Industry Association (CCIA) asked Governor Gavin Newsom to give cannabis essential status statewide.

California-based MedMen, which also has retail locations in Arizona, Florida, Illinois, and New York, is managing the developing situation by following local public health guidelines and recommendations for in-person sales activity. Some MedMen locations offer delivery.

“As of now, MedMen retail stores remain open (save for Monterey Bay-Seaside, California, per local mandate),” Vice President of Communications Christian Langbein told mgRetailer. “We are closely following recent guidelines released by each state and local jurisdiction, plus that of the CDC and World Health Organization. In the best interest of our customers and employees, we have adopted the recommended safety protocol at retail. We are encouraging use of our in-store pick-up and delivery service where applicable.”

Cannabis market data aggregators and wholesalers have noticed a significant increase in sales since the crisis began. Wholesaler Leaflink said sales on Monday, March 16—three days after Trump declared a national emergency—were 48 percent above the previous Monday’s level.

Marketing company springbig reported Friday, March 13, dispensary sales increased 51 percent over previous levels, and 100 percent of consumers used points-for-purchases accumulated through springbig’s loyalty program.

Market data firm Headset said cannabis sales in Washington state increased 33 percent on Sunday, March 15. The firm also reported California consumers seemed to stock up on edibles and infused beverages, while Nevada consumers purchased 50 percent more dried flower than on previous days.

Marketing data platform Flowhub said a sales spike was obvious by Saturday, when customers in California, Colorado, and Oregon added an average of an extra $10 to their baskets, when purchasing online.

Unsurprisingly, cannabis delivery services have seen a boost in sales as customers do their best to stay home. California-based delivery service Eaze reported first-time customers were up 51 percent as of March 16; also, new customer sign-ups had increased by 105 percent.

The National Organization for the Reform of Marijuana Laws (NORML) issued a statement regarding the continued operation of medical cannabis dispensaries during the COVID-19 crisis.

“NORML commends the decision of various state governments and local jurisdictions during this pandemic to designate medical cannabis facilities as ‘essential’ to the community. This designation permits them to continue to provide important services to patients who rely on them,” said NORML Executive Director Erik Altieri. “There are several million state-licensed medical cannabis patients in America. Because many of these patients are among our more vulnerable populations, it is essential that they maintain uninterrupted, regulated access to lab-tested products during this time.

“Policymakers must not push these patients to the illicit marketplace, because unregulated products may contain contaminants, adulterants, molds, pesticides, or other components that could potentially endanger their health,” Altieri added. He also offered best-practices guidelines for dispensaries.

In addition, NORML warned consumers against social cannabis smoking, advising smokers to “puff, puff, DON’T pass,” and not to share pre-rolls, pipes, or other smoking devices with others. The organization also urged use of edibles and consumables during the virus crisis because smoking and vaping may irritate consumers’ respiratory systems.

Representatives for cannabis wholesaler and services company Confident Cannabis, based in Palo Alto, California, said they expect sales during the virus crisis to increase and roughly follow the same arc as grocery sales.

“This will mean higher demands for the supply chain to fill, which will be difficult when people are being admonished not to occupy the same space,” said Brad Bogus, Confident Cannabis’ vice president of marketing. “Because we offer an online wholesale marketplace where only licensed vendors are allowed to participate, we’ve been helping businesses source and list cannabis products to be found by new buyers trying to keep their shelves stocked without needing to do this in-person or manually, as they were before.

“We have increased our hands-on approach because so many producers are short-staffed and having a hard time keeping up,” he added. “An online platform for them to use is essential in this time and place, as well as in the future without a crisis.”

Bogus also took an opportunity to call out disreputable vendors that may be using the crisis to sell cannabis products as prophylactics or treatment.

“I’m pissed to see a number of cannabis companies exploiting the virus panic to sell cannabis as a preventative or even a cure for Covid-19,” Bogus said. “There is no science to support such a dubious claim, and it reflects really poorly on the integrity of our industry.

“On the same note, there are much larger numbers of cannabis companies stepping up to do the right thing, ensuring access is available for patients in need, keeping the retail stores safe and clean,” he added.

Multiple trade show schedules have been disrupted, as well, including dates for the 7th Annual NoCo Hemp Expo in Denver.

“COVID-19 forced NoCo Hemp Expo to reschedule from the end of March to August 6 and 8 at the same location in Denver, the National Western Complex,” show co-founder and hemp advocate Morris Beegle told mgRetailer. “We’re fortunate to reschedule instead of cancel, but the situation has definitely had an impact on our business and all businesses throughout the hemp, CBD, and cannabis space.

“This plant and its advocates have faced adversity for a long time, and we will rise to the occasion this time around, too,” he added.

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