No matter where you live or do business, everyone has felt the strain from COVID-19. The efforts to slow the spread of the virus affected how we lived, worked, and socialized. For cannabis-based companies, 2020 was a strange new world. There was a massive increase in cannabis sales. Several states deemed cannabis dispensaries as “essential” businesses. The industry was praised for efforts to fight the spread of COVID-19, earning support from Congress. And the virus brought about changes in how marijuana-based companies did business.
Still, with everything going on in 2020 the marijuana retail industry continues to grow exponentially!
Cannabis Sales Surged
Sales of marijuana soared to new heights in 2020, with Americans purchasing almost $18 billion worth of cannabis products. This was a 67% increase over sales in 2019. Nine states more than doubled their 2019 sales in 2020.
Sales in Denver on March 23, 2020, were up 392% compared to the same weekday before the stay-at-home order!
There were a lot of factors at play to bring about this considerable increase. Suddenly we were without our everyday activities and social life so it was only natural that folks to turn to cannabis (and thankfully not more alcohol). The worldwide pandemic brought about a lot of stress, and marijuana helped to ease it. Cannabis has become very widely accepted, with the legal acquisition of marijuana taking the place of much of the illegal activity. Cannabis businesses worked hard to meet the needs of the growing market, and people were eager to partake in new choices. Edibles have also gained further popularity and acceptance.
Some say the main factor in the huge increase is that established cannabis customers started spending a lot more, an average of 33% more per month.
Marijuana is an essential business
At first, there was concern about whether cannabis dispensaries and delivery services would be classified as “essential” when localities started to issue orders to shut down. Initially, cities like San Francisco and here in Denver did not say cannabis businesses were essential. The public response was intensely negative. It only took a day for the mayor of San Francisco to change the city’s public health order. Dispensaries and marijuana delivery services were added to the list of essential businesses.
“Cannabis is a safe and effective treatment that millions of Americans rely on to maintain productive daily lives while suffering from diseases and ailments,” said Eric Alteri, the executive director of the National Organization for the Reform of Marijuana Laws (NORML). “It is the very definition of essential that these individuals can still access their medicine at this time.”
There was an increase in cannabis sales in states where cannabis is legal and where dispensaries were deemed as essential, including California, Illinois, Maryland, Michigan, New Jersey, New Mexico, New York, Ohio, Oregon, Washington and of course here in Colorado.
Stocks for marijuana-based companies have seen increases with the increase in sales.
An Evolution in How to Do Business
The cannabis and hemp industries were praised for their positive contributions during the pandemic. “In a uniquely Colorado way,” Senator Cory Gardner said, “you have hemp businesses that are now producing cotton swabs for medical needs…We have protective equipment that’s being donated…by the marijuana industry.”
Marijuana-based companies have also taken the lead with practices to protect customers. Some dispensaries started “senior hour” so that older customers could have some added safety shopping at designated times, limiting their potential exposure to the virus. Stores also implemented protocols like hand sanitizer stations and restricting the number of customers allowed at a time.
Curbside pickup and delivery services were implemented once guidelines for marijuana sales location requirements were relaxed. Those with compromised immunity who couldn’t get out to stores appreciated this immensely. In some areas, online ordering became an option.
Live events were out for marijuana companies in 2020, but they got creative. Virtual parties on April 20, 2020, celebrated the new 4/20 holiday. Customers felt connected through virtual concerts, giveaways, and discounts.
CARES Act Stimulus Shut Out
Because cannabis hasn’t been legalized federally, marijuana-based companies didn’t receive any of the $2.2 trillion in funding provided to Americans through the CARES Act.
Many companies were forced to lay off workers before the pandemic. The continued illegal status of marijuana federally has continued to create difficulties for the industry. Still, the positive attention from some members of Congress during the pandemic gives hope that eventually, there will be changes made on the federal level.
Colorado and Cannabis
Colorado has been a leader for other states, being early with legalizing medical marijuana and then recreational. The Colorado cannabis industry garnered praise for innovations during the pandemic, enabling customers to access products safely. Marijuana-related businesses (MRB) also showed leadership in donating PPE to help protect medical staff. While a lack of cannabis-based tourism was a blow to profits early on, a surge in sales spurred by the pandemic helped the industry survive and thrive in Colorado.
Tried and True
In a trying time like 2020, the cannabis industry was able to rise to the challenge. While marijuana is undoubtedly a product that consumers wanted and needed during the pandemic, the sector has proven that its leaders can improvise and make innovations that created new opportunities for employees and investors. In the future, we may look back on the pandemic as a hallmark of the time when cannabis was truly accepted for the first time on so many levels.