Over the past year, we’ve seen Covid-19 impact almost every industry in a negative way. But what about medical marijuana? We did a deep dive into how the pandemic and the lockdowns which accompanied it, affected both the medical marijuana and the recreational marijuana to help us understand what the future looks like for cannabis in the U.S.
How Has the Cannabis Industry Fared During Covid?
The legal cannabis industry has been staying healthy during the lingering coronavirus pandemic. In part, therapeutic cannabis businesses have been robust and thriving directly because regulated marijuana’s therapeutic properties have played an important role in maintaining physical and psychological wellness for medical cannabis users during the difficult shutdown months. Many may also be seeking a safer alternative to alcohol.
Another factor contributing to vigorous health of the legal cannabis industry is that purveyors of regulated cannabis have adapted their business procedures to fit changing needs of the legal cannabis market. The safety demands of the Covid pandemic have motivated medical cannabis dispensaries to implement advancements in point-of-sale procedures and delivery options for legal cannabis products.
What Happens To Cannabis After Covid-19?
The rare piece of good news during an extensive Covid-19 shutdown is that the advancements in legal cannabis customer service initiated by quarantine requirements will likely stay in place. We expect this to spur further improvements in the selection and purchase experience for therapeutic cannabis users once the worst of this global health crisis has passed.
One of the most common changes implemented at the start of Covid-19 was allowing telemedicine for medical marijuana patients. Leafwell has expanded its services to include all states which passed emergency legislation to enable prospective patients to meet with a physician online. Telemedicine is not only a safe way to connect with a physician during the time of the pandemic but it is also a format which is much easier and more convenient for most people than an in-person appointment.
The legal cannabis industry was spared the hardships of many personal service industries at the start of March pandemic shutdowns. Regulated cannabis dispensaries were deemed “essential businesses” in most states that had an established legal cannabis market. California was the first state to impose a “shelter in place” order on residents in an effort to slow the Covid-19 spread. Simultaneously, California’s governor, Gavin Newsom, led the other legal medical cannabis states in being first to set down guidelines for keeping legal cannabis dispensaries operating during the crisis.
Newsom’s senior advisor on cannabis, Nicole Elliott, told MarketWatch that California did not want to interrupt therapeutic cannabis supplies for the state’s medical marijuana users.
“Recognizing that patients need access to this medicine, as well as acknowledging the importance that consumers continue to be able to access legal cannabis made safer by our regulated marketplace, the governor deemed the cannabis industry essential,” said Elliott.
More Medical Marijuana Purchased during Covid-19
As in pharmacies, regulated cannabis dispensaries were directed to follow preventative Covid protocols including curbside pickup and contactless delivery. A limited number of customers, such as 25% of normal capacity, are allowed at any one time within any legal cannabis store. Social distancing must be maintained while shopping for cannabis in a brick-and-mortar dispensary and masks and constant disinfectant wipe downs are mandated within all legal cannabis stores. The safety restrictions did not devastate legal cannabis sales.
Everest Apothecary legal cannabis dispensary in Albuquerque, New Mexico, signed up approximately 1,000 new customers when shelter-in-place was ramping up during April and May 2020. Everest Apothecary’s taxable cannabis revenue doubled during that same time. Everest’s Jefferson King told KRQE Albuquerque that sales continued to rise during the summer and in the months that followed. “From June until [November] we’ve seen a lot of increase. Probably up to 60 to 75 percent overall,” said King. “We have a lot of people that are struggling out there and you know we’re here for them and we just want to let them know it’s going to be okay and we’ll get through this.”
New Mexico’s 100,000-plus current medical cannabis patients include a 27% increase since June 2019. Ben Lewinger, executive director of New Mexico Cannabis Chamber of Commerce, estimates medical cannabis sales increased during the first half of 2020 in his state by 55%. The reasons for the boom in medical cannabis revenue seem clear to Lewinger: “People are taking the opportunity to use cannabis for other things that it’s proven to work for beyond just qualifying conditions, things like anxiety, stress, insomnia.”
The cannabis industry has not been sleeping on honing solutions for electronic purchase of legal cannabis products. An editorial in Forbes points out that, “Many retail companies have adopted e-commerce solutions to optimize their business, seeing Covid-19 as an opportunity, offering contactless ordering options to give customers peace of mind.”
Financial Hurdles In the Cannabis Industry
The legal cannabis industry, though regulated and taxed, faces hurdles that mainstream businesses do not. Since the advent of the regulated cannabis market, payment by credit card has been problematic when possible. The core of the difficulty of cannabis purchases being shunned by credit card companies is marijuana’s continued prohibition at the national level in the United States. Banks, with their ties to federal governmental institutions, have been leery of extending billing processing services to legal cannabis companies, which are regulated state by state.
Many observers of the burgeoning legal cannabis industry, Forbes included, agree that moving into digital forms of payment and credit card purchases for therapeutic cannabis products is essential if the medical cannabis movement is to reach its full potential and offer its greatest range of benefits. In the months of the pandemic restrictions, payment solution providers for the legal cannabis industry such as Kind Pay have worked toward making cannabis e-commerce as smooth as a regular credit card transaction by providing point-of-sale systems for dispensaries and growers.
Few if any of the marketing and legal hurdles ahead for the legal cannabis industry seem insurmountable any longer. As recently as 2016, top tier business executives were leery about venturing into the regulated cannabis field. Bloomberg News remembers the beginning of the legal cannabis green rush as a time when professionals worried about compromising their accreditations as, for instance, lawyers or accountants. The state-by-state regulated legal marijuana business remains legally complicated federally.
What Does The Future Hold For Cannabis?
We expect to see the medical marijuana industry and the recreational cannabis industry expand over the coming years. Already, there are significant signs of growth, despite much of the economy shrinking as a result of Covid.
CannabizTeam is a San Diego, California, business specializing in personnel recruitment for the legal cannabis industry. In the coronavirus pandemic year of 2020, CannabizTeam has placed more than 1,000 employees in cannabis industry roles, twice as many as in 2019. Of those 1,000 fresh workers for legal cannabis prosperity, around 30% are executives and managers.
“After it was deemed essential in Covid, people are reaching out to us and saying: ‘How can we get into this industry?’ ” CannabizTeam’s CEO Liesl Bernard told Bloomberg. “Today, it’s become the sexy industry.”
Once we are free to move about outside our homes, the talented executives pushing legal cannabis industry innovation during the health protective restrictions will still be on the job, engineering advancements in medical cannabis products, expanding their acceptance and availability.
The pandemic will end; legal cannabis will move forward. Don’t sicken, friends. Have patience and be here for the sexy industry’s post-pandemic 420 celebration.