How COVID Impacted the Cannabis Industry

As cities, states, and entire countries rushed to close up shop and quarantine as the novel Corona virus (COVID) swept the globe, many weed lovers were surprised that many dispensaries were able to stay open while other businesses like restaurants, gyms, and shopping centers were closed.

Despite the tragedy of the mass death, high unemployment, and gloomy outlook sales of marijuana exploded.

While cannabis isn’t cheap, it seemed worth the cost to many, perhaps as a fun activity to do while locked up self-isolating or perhaps as a distraction to the depressing world outside.

oregon covid weed sales

In the weed-loving state of Oregon marijuana sales soared 30% in March when lockdown first were implemented which equated to a whopping $84 million dollars in sales, according to OLCC, Oregon’s Liquor Control Commission.

Similar trends played out in Canada, where marijuana sales saw a successive increase in sales of 19% to the tune of $129 million USD.

To find out more detailed accounts of how COVID has impacted the cannabis industry we interviewed business owners and managers to get their insight into the pandemic and gather some real-time market intelligence.

Coping With Increased Demand & New Delivery Challenges

Artisans on Fire, a marketing agency that works with “grey market industries” including cannabis, found that by labelling dispensaries “essential services” early on was both a blessing and a curse for some clients.

Having delivery be an option for all dispensaries, even those previously labeled recreational, opened them up to hoards of new curbside customers.

Some businesses struggled with staffing, with organizing delivery fleets, establishing clear delivery zones, and implementing efficient online sales programs to best assist consumers who needed their products.

increased delivery demand

Some brave brands set out to shift their focus entirely on delivery expansion and using cannabis as a unifying commonality in an scary time when human contact was forbidden.

This type of messaging seems to have proven a success. Some brands reporting revenue increases of 94% due to the added delivery channels. Over the course of the pandemic delivery-based purchases demand has stayed high, comprising 70% of all post-shutdown purchasing.

first time weed shopper

More First Time Shoppers in California

Chris Vaughn, CEO of Pacific Consolidated Holdings, the company behind online cannabis delivery and retail operator, also counted the blessing of being in an industry deemed “essential” by the state of California.

Vaughn said that in addition to healthy demand from regular customers, they saw in increase of first-time shoppers as well, presumably looking for a legal way to spice up their lockdown.

Explosion in Sleep Oriented Products

Heidi Genrich, Director of Marketing at Ganja Goddess, a cannabis e-com delivery company in California conducted a poll in which they saw a nearly double-digit increase in cannabis consumption and a huge uptick in consumers turning toward delivery services.

CBN for sleep

Interestingly, from March 2020 onwards they saw a 900% increase in sales of products marketed to support sleep, like CBN, a common cannabinoid that can cause drowsiness.

Anyone who has felt the full stressors of lockdown impact their lives might easily understand why consumers would lean towards sleep oriented cannabis products.

Trials and Tribulations of New Regulations

Steve Lee, who owns a family of retail cannabis stores in eastern Washington (having served over 4 million customers) called Green2Go, shared some of the new and challenging obstacles cannabusinesses faced during the pandemic.

“Many state agencies have allowed for curbside delivery which is great for customers but extremely inefficient for the retail stores. We have to take cash due to federal restriction so there are multiple trips to each car and all the legwork is paid at a fair living wage plus coronavirus incentive pay and PPE costs. It can be very easy to coronavirus your way out of profit” Lee said.

Spotty regulation that comes with piece-meal state-specific legislation means not all dispensaries are positioned to thrive in a time where others, in states with more friendly cannabis banking laws, such as allowing non-cash payments (cards), thrive.

cost of ppe for businesses

Mr. Lee also pointed out how the stress of the pandemic has impacted consumer behavior, particularly how it amplifies existing customer personality types, making the good better and the bad worse.

“Customers have changed entirely in the pandemic. It has made good customers incredible and bad customers awful. It has driven more aggressive and semi-violent behavior than we have EVER seen before. Customers are mean all of a sudden.

No one was ever mean at the weed store before. It mostly comes from antimaskers who hassle our staff about our mask restriction for the store or wear inefficient masks (like lace masks) as a protest of some kind which masks. They seem to be looking for confrontation and it has two negative effects.

First, it makes other customers uncomfortable and ruins what should be the best part of your day–buying weed!

Second, while it may make other customers irritated it takes a huge psychological toll on our employees. We’ve had employees that are afraid they are going to die from work or bring this virus to someone vulnerable in their family.

We’ve had stellar employees who’ve made the decision to quit out of fear of COVID. We go well above and beyond state requirements for safety and we have employees who are getting tested every week because working with the public feels like an odds game and the stakes are too high to lose.

Our retail workers, retail workers in every industry, are going to have PTSD after this and no one is talking about it.”

So, while it seems cannabis can be a great stress reducer, it can’t completely overcome some of the deep stress being felt by both consumers and businesses alike.

BATCH cbd oil
BATCH by Wisconsin Hemp Scientific’s sleep-oriented CBD oil

CBD Interest Piqued During the Pandemic

BATCH by Wisconsin Hemp Scientific, a CBD manufacturer and retailer, noted that general trends in CBD sales piqued significantly during the beginning of the pandemic.

Web traffic from people searching keywords like “cbd oil near me” and “free cbd samples” increased almost immediately.

This was reflected in Google Trends, which is a Google service that tracks global search trends (the queries users are entering into their search engine), saw a large increase between March and June of 2020 for queries like “cbd for stress”.

BATCH confirmed they were seeing correlated increases in sales and have attributed it to the pandemic.

Interestingly, CBD sales remained elevated after June 2020 and then tapered off but remained well above pre-COVID levels. This demand was constant until around December 2020 when interest dropped back to pre-pandemic levels. Online sales followed market trends the entire time.

HerbCEO Final Thoughts

Herb CEO Summary

In addition to hearing from the above owners of cannabis software, dispensary, CBD, and retailers, we’ve noticed an increase in shoppers in many of the local Oregon dispensaries we visit.

When we asked Budtenders what they were seeing there definitely seemed to be an increase in regular customers seeking more stress and anxiety reducing strains vs some of the high THC, more socially-conducive strains.

Productivity and focus-oriented strains also seemed to experience a slight increase in popularity during the summer months of the pandemic when many had transitioned to full time work from home mode.

This pandemic has been a challenge for everyone, and no amount of industry sales can erase that, but we are happy to see more people opening up to some of the healing benefits of cannabis and supporting local businesses in the process.

May 2021 and beyond be a much brighter time as more states legalize the good herb and more people can have access to glorious de-stressing strains.

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