Dispensaries Could Get a Lift from Stimulus Checks

With the government helping small business amid the pandemic, the cannabis industry could benefit.
Dispensaries Could Get a Lift from Stimulus Checks
Image credit: LPETTET | Getty Images

Free Book Preview Cannabis Capital

Learn how to get your business funded in the Cannabis economy!
3 min read
This story originally appeared on Green Market Report

The stimulus checks that many Americans are beginning to receive this week could also stimulate the cannabis industry, namely the dispensaries. Viridian Capital Advisors said it expects the latest stimulus check will translate to higher than normal retail sales in the near-term, as well as inflated wholesale prices, which are driven by that stronger retail demand.

The last time Americans got a stimulus check, cannabis companies said they saw increased demand. No doubt being declared an essential service helped as many dispensaries could make deliveries or offer curbside service. Viridian said that in reporting second-quarter 2020 results, nearly all the industry’s leading operators attributed a boost in sales to stimulus payments.  Cannabis tech company Akerna (NASDAQ: KERN) published a flash report stating that April 15th (right after many Americans received stimulus checks) was the biggest Wednesday for legal cannabis sales in history with both ticket size and total revenue up over 50% compared to a normal Wednesday in 2020. Viridian added, “We note that the April 15th sales uptick came just weeks after a stockpiling of cannabis had occurred in late March 2020 and at a time when Massachusetts rec sales were prohibited, and Nevada sales were restricted, making the increased sales level following the stimulus receipt seem even more significant.”

RELATED: Cannabis Companies Share How They Launched Social Equity Funding, Programs

Charlotte Hanna, CEO of Rebelle cannabis dispensary in Great Barrington, MA said, “This past year has been fraught with massive change, which has caused so much stress for millions of Americans. The stimulus program will not only offer financial relief, but it will also allow a little extra for wellness. It’s been a long, hard winter and people want to start feeling good again.”

Viridian Advisors said it doesn’t anticipate as large of a boost in sales to occur with this year’s stimulus checks, but it does anticipate inflated sales volumes. “The total in stimulus money received for many individuals in January and this week combines to be significantly more than last year($2000 vs. $1200 for a qualifying single individual). Meanwhile, the timing is interesting given that Q1/21for many operators was to be by far the weakest quarter of the year even beyond typical seasonality. The Q1/21 relative weakness stems from the fact that many operators made acquisitions and expansion initiatives that have yet to contribute to results. As such, the increased sales in the quarter will likely disproportionately drive upside to full-year expectations and Q1/21 estimates and/or will offset any weakness from delays in integration or the buildout of assets.”

RELATED: 8 Steps To Making Your Brand Stand Out

Kris Krane, President of 4Front Ventures said, “We should expect that the next round of stimulus checks will positively benefit the cannabis industry, much as it is expected to help all segments of the economy. These payments will allow consumers to spend on goods and services that they might not otherwise be able to afford due to the pandemic-induced economic downturn, putting money back into the overall economy and boosting businesses across the board. It will likely have an outsized effect on dispensaries located in lower to middle-income communities, where people have been disproportionately impacted by the downturn and will now have extra cash to meet their need and bolster businesses in the communities.

More from Green Entrepreneur
Terry's digital marketing expertise can help you with campaign planning, execution and optimization and best practices for content marketing.
Each week hear inspiring stories of business owners who have taken the cannabis challenge and are now navigating the exciting but unpredictable Green Rush.
Sign up for our weekly newsletter for winning strategies, exclusive features and all the tools you need to strike gold in the Green Rush.

Latest on Green Entrepreneur