As the coronavirus pandemic started to sweep through California, many residents stocked up on cannabis supplies, with sales numbers across the state hitting record levels–but now, as Safer at Home becomes a long-term reality and many would-be shoppers grow concerned about dwindling incomes, those sales have quickly slumped. That has local retailers and producers working quickly to adapt to a changing marketplace.
Cannabis trade publication MJ Biz Daily reports that, around March 16 there was a statewide surge in California cannabis sales of 159 percent compared to the same time last year. Within just days, however, that surge dropped off almost entirely. On March 21, the same indictor found sales down to just 23 percent over 2019 numbers.
“We noticed an increase in sales beginning on March 2, both in the number of transactions per day and dollars per order. Sales continued to steadily increase until March 19. We noticed a huge surge on Thursday, March 19, right after L.A. announced its Safer At Home directive. That day was our busiest sales day ever,” says Lauren Fontein, co-founder of the Artist Tree, a cannabis shop in West Hollywood.
Since that time, however, she notes that sales have slowed slightly overall, and in-store sales in particular have dropped dramatically. “In our busiest week, sales were up about 40 percent from pre-coronavirus levels. Starting on March 20, sales have been down about 45 percent from that peak–so lower than our average sales before coronavirus.”
To serve customers heeding orders to stay at home and obey social distancing, the Artist Tree launched delivery and express takeout services for the first time–and they’re not alone. Delivery and pick-up services have become more integral than ever to cannabis sales. Jane, an online marketplace that works with cannabis retailers, has found that delivery sales are now up 116 percent just since January.
In March, one of Jane’s retail clients in California reached out to set up a curbside take-out option, similar to what many restaurants have started offering. That technology didn’t exist yet for dispensaries, so Jane built one and rolled it out the next day. “Adding curbside pickup as a fourth retail module was an unforeseen, but a natural extension of our existing offering–and we were able to transition seamlessly, nearly overnight, for thousands of dispensaries across the country,” says Jane CEO Socrates Rosenfeld.
One hurdle the cannabis industry faces is that the “contactless” deliveries, which have become commonplace for food and other goods, are technically illegal for cannabis. A delivery driver must hand the purchase to a customer, verify their age, and typically conduct payment with a portable debit card terminal or exchange of cash. The Marijuana Policy Project, a pro-cannabis activist group, sent a letter to Gavin Newsom and several other governors last week, advocating to allow delivery services without face-to-face contact, at least for medical cannabis users.
Nonetheless, dispensaries are working to make the process as hygienic and safe for drivers and customers as they can. Sweet Flower, which offers delivery from three L.A. locations, is “ensuring that each product is sealed, packaging is sanitized before handoff, and the delivery driver’s hands are washed in between each interaction,” according to a company spokesperson. MedMen posted a lengthy document detailing their virus-prevention policies, which include issuing hand sanitizer for staff and customers, disinfecting surfaces between transactions, and other protocols.
At the Artist Tree, they have adopted strict cleaning standards, staff are wearing gloves, applying hand sanitizer, and they are capping the number of customers who can enter the store to pick up orders at any one time to allow for distancing.
The pandemic is influencing what customers buy as well as how they shop. While customers were in stock-up mode earlier in the month, now Fontein has noticed more price sensitivity, perhaps due to a desire to stretch the same budget to cover larger quantities, and sees more customers opting for edibles and concentrates, while vape and flower sales have dropped, a trend she attributes to increased concerns about respiratory health.
One thing nobody in the industry appears concerned about, at least for now, is shortages in coming weeks or months. “Our brands are doing well keeping their products in stock,” Fontein says. “The only products we have had difficulty obtaining so far are cleaning supplies.”
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