What does Covid-19 mean for the cannabis industry?
If you asked that question two weeks ago, the answer would be “this is not a big deal.” Delivery sales were up, consumers were stockpiling in case things got worse, and retail sales looked to be up as well.
Then things took a sharp turn earlier this week when California instituted a shelter in place order that closed everything deemed non-essential. Those “essential needs” were defined differently by each county, leaving city officials questioning whether cannabis was an essential service for their citizens. Most counties said, “yes, it is” but San Francisco initially closed all dispensaries giving only certain licensees permission to do curbside pick-up.
Is Cannabis an Essential Service during Covid-19?
There are now calls within the industry for cannabis to be considered an essential service across the board should more cities or states put isolation rules into place. Leaders in the San Francisco cannabis industry were immediately concerned and responded the minute they were left off the list of essentials, a move that also has to make business owners in other states nervous about their own fate.
Although it’s tough to say whether those calls had an impact on the change—or if it was merely an error of omission—London Breed, Mayor of San Francisco, clarified within 24-hours that medicine had to get to the people, stating:
“Cannabis is needed medicine for many San Franciscans and dispensaries are allowed to continue operating.”
We are monitoring this situation city by city as virus-related restrictions are mostly made locally as of right now. Portland also declared that cannabis businesses would stay open. While they are not yet under the same restrictions as San Francisco, as of the time of writing, the city has not listed it as a specific essential business but did exempt it from a shutdown. The same goes for all of Colorado where Governor Jared Polis put out a statement saying they would use the precedent set in Pennsylvania to view dispensaries as no different than other pharmacies.
The Washington State Liquor and Cannabis Board announced changes to marijuana regulations on March 17, included curbside pickup for green card holders, limits on the number of people inside a store at once, and stricter sanitary standards to protect medical users. In Nevada, cannabis dispensaries were not listed among the “non-essential” services in the Health Response COVID-19 Risk Mitigation Initiative. Regardless of individual rules, all states must employ strict in-store social distancing to remain open.
Increasing demand means business will certainly continue, but it won’t be business as usual. It’s currently unsafe to occupy the same space with others, yet deals are going to keep happening as retail stores refill their shelves.
Supply Chain Might Pose the Bigger Problem
Word on the street is all about the slowing down of production for vape cartridges, along with battery packs, which both primarily come from China. While the batteries are not a huge deal, the cartridges will become an issue sooner rather than later.
When Chinese factories shut down, this affects the entire supply chain of the world; everything they produce comes to a halt. This production hiatus is something that a wide range of industries will face. The world’s largest 1,000 companies own about 12,000 manufacturing or distribution facilities in quarantined areas right now, according to a Harvard Business Review report. For cannabis, about 90% of the world’s e-cigarettes and vaping devices come from China, according to a February 26th news release from online vape retailer ProVape. Some of the factories are back in operation, alleviating part of the concern over disruption to the supply chain, but they aren’t operating at full capacity.
In the interim, this will slow down vape companies from filling new carts. There is no solution right now, other than to get through the epidemic and back to business. In the future, however, this could force cannabis companies to consider using multiple suppliers—including a few that are closer to home. Our best recommendation is to ensure you have alternate suppliers in place once we get through the tough times.
Now, more than ever, using an online platform to source cannabis products is important. Clients of Confident Cannabis in CA and OR have been reaching out asking for sales assistance to help them make deals and survive, if not thrive, in this crisis. There are online tools out there to assist cannabis businesses, and they need us to help.
Now is the Time to Take Care of Each Other
It has come to our attention that people, including a few “high-profile public figures,” have made false claims that cannabis—and CBD in particular—can protect people and even help them get over the Covid-19 virus. This is very concerning, especially from public figures who have the eyes of the world on them. We have no evidence to use in saying there could be any correlation here; these claims are false and meant to prey on the public’s hysteria. While it is true that CBD and THC both help many symptoms, like muscle aches and pain, poor sleep, headache, and signs of inflammation (fever) … that’s the most that anyone can (or should) claim.
If you are telling people that CBD (or cannabis in general) will protect people from Covid-19 or even cure the virus, this is dangerous and could potentially hurt people—please reconsider sharing these public opinions. The worst thing we can do is spread false information in times like these.
We’re Still Learning as this Situation Changes Daily
Our team continually monitors the condition of the cannabis wholesale market and will bring you the latest trends as we see them. Join us on Twitter for the latest updates.
In the current climate, you can keep everyone safe by making deals happen online, and we have the platform to keep business moving. Check out Wholesale to learn more.