The Post Pandemic Cannabis Industry Will Continue To Bloom
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The cannabis industry will come out of the coronavirus pandemic stronger than when the pandemic started. That will include new opportunities for cannabis entrepreneurs in states that have already legalized and those that might soon follow suit.
Those are some of the findings in a recent report called State of the Cannabis Industry conducted by LeafLink, Flowhub, and Vangst. Each company approaches the cannabis industry from a different vantage point - wholesale (LeafLink), dispensaries (Flowhub) and employment (Vangst).
No matter how you look at the industry, it’s been a great year for cannabis. After an initial explosion in cannabis sales when the pandemic began, record sales have continued in some states. The report found that cannabis sales nationwide have stabilized at a rate 40 percent higher than in 2019.
That stabilization indicates that post-pandemic sales numbers should stay strong. Officials in Michigan, for example, expect the market in their state to surpass $3 billion in the near future. Nationwide, some projections call for a $34 billion U.S. cannabis market by 2025.
Medical marijuana also is growing. The number of people in the United States who have enrolled in the medical marijuana program in their home state surpassed 3 million for the first time in August 2020.
Voters in Arizona and New Jersey will also consider making recreational marijuana legal in their states on Nov. 3, potentially adding high-population new markets to the industry.
Those who prepared fared best
The report cited data showing that dispensaries with “order ahead” capabilities were better prepared to deal with the sudden spike in sales once the pandemic began. Those dispensaries saw increases in sales that were 22 percent higher than dispensaries that could not order ahead. They also saw 8 percent more transactions and a 13 percent increase in order amounts.
Writing about the report for Green Entrepreneur, LeafLink’s Alex Feldman noted that both emerging and mature markets have contributed to the growth. For example, the report found both California and Colorado are outpacing 2019 in sales. At the same time, emerging markets in Michigan and Oklahoma have been among the hottest in the nation.
The big difference has been a change in how consumers buy. Overall, the report found cannabis consumers making fewer trips to dispensaries but buying more with each visit. Many of these transactions moved online as e-commerce became a larger part of the dispensary business.
The cannabis industry showed remarkable resilience.
One aspect of the cannabis industry that 2020 has highlighted is the resilience of those who run marijuana businesses. When faced with having to make fast changes, the industry quickly altered how it conducts business.
The report found that 79 percent of dispensaries began offering curbside pickup and delivery after the pandemic hit the U.S. About 64% went to a delivery strategy and 43 percent increased digital marketing and e-commerce strategies.
“2020 will be remembered as one of the most tumultuous years of our lifetime, but also as a pivotal year for the cannabis industry,” Feldman wrote. “This year, we faced some of our biggest challenges ye —and the industry is emerging stronger and more nimble.”
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