As States Reopen, Pot Shops Continue to Struggle

While reopening has given retailers the ability to sell to more customers, many are still struggling to get near pre-COVID-19 sales.

As states start to re-open their economies, people are starting to adjust to the idea that they’re allowed to go back out and do things again. The idea that things could go “back to normal” remains far off even as businesses re-open, though, as customers are walking in to see vastly different business models than those in place just four months ago.

For example, most stores you enter nowadays will have markings designating a safe distance to stand apart; check-out lanes will have plastic walls separating the cashier from the customer; and many businesses ask that anyone who enters wears a mask.

Continue Reading Below
Continue Reading Below

Cannabis retailers are no different. State governments’ views on marijuana shops have varied. California, for instance, let dispensaries stay open whether they sold recreational or medical marijuana. Of course, the word “open” came with a plethora of caveats, as most cannabis stores switched to a curbside pickup model. Other states let people keep up medical marijuana deliveries and pickup, but kept adult-use marijuana off the market for a while. In Massachusetts, Phase II, which recreational dispensaries fell into, just started up.

But even though people are technically allowed back out of their houses, most stores haven’t seen a consumer boom large enough to make up for the time they were closed. And that problem has several faces: customers might feel timid, fearing the spread of the coronavirus; people have less spending money after losing hours at work or even seeing their jobs swept away altogether; and stores can’t operate at the same capacity as they did before.

Continue Reading Below

New England Treatment Access, a cannabis retailer in Massachusetts, told Wikileaf the biggest challenge it’s faced is its limited capacity now that it’s re-opened. At first, when only medical marijuana was allowed to be sold during the shutdown, NETA opted for a curbside pickup model where customers picked a 15-minute timeslot where they’d retrieve their products. Now that the state is allowing recreational sales as well, NETA is keeping that model up, and also allowing a limited number of people inside the store.

Continue Reading Below

A Public Relations manager for NETA, Peter Brown, told Wikileaf everything is flowing smoothly, and customers are heading in consistently now that Massachusetts has entered Phase II. Even still, the dispensaries simply can’t have as many customers present at one time, and therefore can’t maintain the same sales numbers as they did before.

Continue Reading Below

In a time of uncertainty, sales fluctuate

So far, sales have fluctuated massively. There was a huge boom at the start of the pandemic when panic-buying was all the rage in March. People also seemed to use marijuana as a way to cope with anxiety brought on by the coronavirus shutdowns. There were spikes in sales reported around 4/20, but dips as people held onto their spending money because of lost wages.

In Washington State, Oregon, and California, marijuana sales in April 2020 exceeded those from the year before. Illinois saw numbers second only to the first month after marijuana was legalized in the state. But in Nevada and Colorado, where tourism took huge blows, sales were down.

Continue Reading Below
Continue Reading Below

The adjustments being made for social distancing standards is going to hit some areas hard. For instance, dispensaries in the town of Huntington, Oregon, used to serve 600 customers a day – about 170 more people than the entire population of the town. That’s because people would flood across state lines, coming in from Idaho to visit the two dispensaries in the border-town of Huntington. Huntington Councilman Chuck Guerri was quoted in March 2017 saying customers would regularly wait more than 2 hours to get their product, chatting and mingling as they entered the store to wait.

Now, something like that simply would not be possible. Customers would have to stand 6 feet apart, forming lines that would stretch around the building multiple times. Each would have to be screened for symptoms before entering the dispensary. And if the wait was 2 hours before, it might be double that with the new standards. It’s unlikely people will be willing to wait that long, meaning the town simply won’t see the same sales numbers as it used to before the pandemic.

Continue Reading Below

Marijuana industries also face financial challenges that other businesses don’t suffer. Since marijuana is still illegal at the federal level, businesses that sell or handle the product in any way have special rules in how they accept payment and file taxes. That means they aren’t able to get the same loans and bailouts as other companies. Plus, those retailers typically cannot accept payment online, and have to instead handle money in person, meaning socially distancing is a greater challenge.

Continue Reading Below

The Governor of Colorado waived that rule during an emergency order, allowing pot shops to take payment online, but only if they find a bank willing to process the money. Again, because the business isn’t viewed the same way federally as it is statewide, many banks won’t associate with cannabis retailers. Dispensaries in the area noted that was a tremendous help but aren’t sure whether the state will be convinced to keep the rule in place moving forward.

Continue Reading Below

Delivery is also a big question in the industry. In Washington D.C. the Mayor allowed registered medical marijuana dispensaries to offer delivery along with curbside and doorside pickup, but still called the order temporary. The District also made renewing medical marijuana cards a bit easier. The delivery of recreational marijuana still isn’t on the table, though.

On top of re-opening, some businesses are struggling to open in the first place. Recreational marijuana retailers were supposed to open in Maine this coming Spring, after voters approved adult-use weed in 2016. Now, those businesses’ opening dates are delayed indefinitely.

Continue Reading Below

Meanwhile, more than half the states in the U.S. have seen an increase in confirmed coronavirus cases since they’ve reopened. Arizona, Florida, Oklahoma, and Texas are the areas of biggest concern in case numbers, but seemingly the least concern in getting back to their routines. That could mean stricter regulations or a second shut-down that would undeniably put some cannabis retailers in jeopardy.

 

As States Reopen, Pot Shops Continue to Struggle was last modified: by