Coronavirus, Cannabis & the Impact on Dispensaries
The coronavirus pandemic has affected the global economy more than any other event in the past decade. Unemployment exploded, businesses collapsed, and stay-at-home orders pressured millions of households to change their lifestyles drastically. So what did the coronavirus impact the dispensaries industry overall? Well, in some ways, it’s been advantageous, but in others, it’s presented new challenges.
Early on, thanks to the coronavirus, cannabis dispensaries were deemed essential in most states where marijuana is legal for adult or medical use. Because of this, sales skyrocketed – just as you would probably expect.
According to Jeremy Burke, cannabis industry reporter for Business Insider, April 2020 was one of California’s best months ever. Having sold about $250 million worth of cannabis in one month – understandably so. Cannabis made quarantine a bit more bearable for both weed enthusiasts and novices across the land, and vice-versa. Quarantine presented the country with ample time to shop online and purchase products.
However, due to the coronavirus, dispensaries had to change how they operated, just as any other business was required to do. While home delivery services were always a thing in legal states, it wasn’t always the only available option, so adjusting to solely curbside and drive-thru rather than in-store operations presented as many challenges for staying open as it did for most others. Luckily, through swift action by state regulatory bodies due to the impact on dispensaries, most dispensaries prevailed and managed to maintain essential operations while minimizing human contact.
Coronavirus & Cannabis Purchases
During the coronavirus, cannabis businesses were faced with a unique problem. Although certain dispensaries accept debit cards with a fee or payment through third parties like CashApp or Venmo, marijuana is primarily a cash market due to banking regulations. However, amid the pandemic, many people refused to spend cash. At the same time, many businesses refused to accept it and because of this worldwide reluctance, some dispensaries faced a significant decline in revenue.
Perhaps one factor that had the greatest impact on dispensaries was economic relief, which didn’t really exist for those in the cannabis industry. When it comes to a federal solution, marijuana remains illegal under federal law, which means nobody within the cannabis industry was eligible for any form of federal relief as other businesses were.
Coronavirus’ Impact on Dispensaries & Staff
This dichotomy presented a massive problem not only for the businesses themselves but for a lot of the employees. Unemployment levels were high; but workers can’t file for bankruptcy, refinance their mortgages, or receive any assistance with medical debt – all things that workers in any other industry could access. Not to mention, retail is always a tight margin, so for those with a smaller startup or single dispensary, too bad. If the shop had to shut down for any amount of time, businesses within the cannabis industry are locked out of small business administration loans, eliminating any chance of eligibility for a bailout.
“Although a couple of court cases have addressed this problem, they’ve been shut down as long as the conflict between state and federal law remains,” Burke stated.
Because during the coronavirus, dispensaries have been deemed essential, they’ve been a bit more adept at maneuvering job loss, but there has still been a significant amount of unemployment. Cuts have been made within cultivation and production facilities, dispensaries, retail stores, and corporate offices as a direct result of tightened expenses. Fortunately, compared to many other industries, the impact on dispensaries and the cannabis industry has stayed afloat.
Cannabis was once demonized by law enforcement and most of society. Yet, over the last decade and even in the previous year, the issue has seen quite a revolutionary shift in people’s mindsets and viewpoints across the country.
“Similar to gay marriage, cannabis is one of very few issues that have seen such a rapid shift in public perception,” Burke stated.
Complicated legislation like cannabis legalization is hard to carry out, but especially while battling a global epidemic, so many states opted to shelve those issues until the virus passed—regardless of revenue possibilities. Yet, a year later, marijuana has become legal in five more states, and newly adopted programs are expected to relieve each one of any economic shortfalls brought on by the pandemic. We’ll be sure to post updates as they happen!