As Cities Declare Cannabis An 'Essential Business,' Here's How Businesses Are Rallying To Help Customers
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If there is any good news coming out of the coronavirus crisis, it may be city officials' decision to classify cannabis as an "essential business."
With the latest announcement from California Governor Gavin Newsom’s “safer in place” measures, many businesses like convenience stores, farmers markets, pharmacies, and hardware stores can remain open. While the state has not classified cannabis as essential, yet, cities have taken it into their own hands to clarify that yes, dispensaries are “essential” and can remain open at this time while following safety measures.
Since the World Health Organization called the COVID-19 viral disease earlier this month, dispensaries and delivery outfits have seen an uptick in sales as they continuously adapt to the shifting climate. This is again good news for an industry that spent years in the shadows overcoming many obstacles is pulling together to ensure their communities get what they need safely and efficiently.
According to Jane Technologies, a cannabis e-commerce platform with a network of over 1,300 dispensaries in 28 states, the average store has increased its revenue by 52 percent, up to 130 percent from this time in January. Other statistics:
Stores with PICKUP ONLY: In the last week, sales have increased 52% since this time in February and 82 percent since this time in January
DELIVERY ONLY: In the last week, sales have increased 46% since this time in February and 115 percent since this time in January.
DELIVERY AND PICKUP: In the last week, stores offering both pickup and delivery have seen delivery go from 26 percent of sales to 33 percent of sales.
OVERALL REVENUE INCREASE: The average store has increased their revenue by 52%, up to 130 percent from this time in January until now.
NEW USERS ORDERING: In the past week, the number of new users to online ordering has increased 142 percent since this time in February.
“These are uncertain and stressful times for everyone. It's no surprise that people are turning to cannabis to reduce anxiety, to help them relax and to improve general well-being," says Jane Technologies CEO Socrates Rosenfeld. "It's comforting to see State officials recognizing it as a critical business in this moment."
Nugg, one of the largest online marketplaces for cannabis delivery in California, has over 150 partner dispensaries throughout that state. “We're already seeing a massive spike in order volume across the state,” says Alex Milligan, co-founder of Nugg. “Over the last 7 days, we had a 26% increase in orders compared to the previous 7 day period.” The company says that right now it’s seeing large spikes in urban San Francisco—where since last Tuesday there has been a “shelter in place order” for nearly 7 million people—and Los Angeles, another city hit hard with COVID-19 cases, where orders are up.
Airfield Supply Co. in San Jose saw a 100% increase in business last week. To lighten the burden on customers, they also enacted free delivery—which, by the way, their fleet of Teslas delivers.
The Apothecarium, a dispensary chain with three locations throughout the Bay Area, has seen an uptick in sales as well as online orders and continues to service customers while taking extra precautions. “We feel a strong sense of purpose to keep our guests and team members safe while maintaining access to cannabis for the people who depend on us,” says Cali Manzello, Apothecarium Castro store manager. “Our operations have been transformed.” Manzello goes on to explain that they are being extremely strict about maintaining ‘social distancing’ inside the store and outside in lines and constantly sanitizing hands and surfaces. “It’s a strange, intense and challenging time, but everyone is pitching in, both team members and guests. [We] couldn’t be more grateful for everyone’s effort and understanding.”
Harborside saw their biggest sales day on Monday after implementing curbside pick-up in Oakland and is utilizing drive-through at their Desert Hot Springs location. The company is allocating more staff to delivery and hiring new delivery staff as well.
Glass House Group is offering 20 perecent off all delivery orders for seniors age 65 and older who are at greater risk for contracting COVID-19. The company has expanded its express online ordering and delivery operations, reporting sales on Friday that surpassed what is usually their biggest annual sales day, 4/20.
Cities have heard the calls from both policymakers and citizens as two leading cities, Los Angeles and San Francisco—that are also among the hardest hit by the pandemic—have made it clear: dispensaries can remain open. Now it’s time for California to follow suit to make the “essential” classification for dispensaries statewide.
Bad news for the black market
The classification of cannabis dispensaries as “essential” has also thwarted a resurgence of the cannabis black market. “Cannabis is a medicine and anxiety reliever for so many people; [and] it’s irrelevant if they buy it with a medical card or at a recreational dispensary,” says Autumn Shelton, says Autumn Shelton, CFO of Santa Barbara-based cannabis grower Autumn Brands. “It is essential to their daily lives. And more than ever during this pandemic. If cannabis farms, distributors and dispensaries/delivery services are forced to shut down people will be forced back to the black market. The cannabis industry must continue to operate with strict social distancing and sanitation procedures in place to ensure health and safety for all.”
Dispensaries and ancillary businesses in California will continue to adapt to ensure they can safely service customers. Nugg says it’s providing resources to its partner dispensaries and ready to help businesses pivot as needed. “We're helping our partner dispensaries meet the increased [delivery] demand by sourcing new drivers from our 500k California customer base,” says Milligan. Retail stores are also taking precautions and reassuring customers that those that want to physically come in, can and feel safe to do so. From practicing social distancing to increasing cleaning and wiping of surfaces, they’re taking the pandemic extremely seriously, following CDC guidelines and going above and beyond to create a safe environment in the new-normal living with COVID-19.