When the pandemic first struck, the impact did not initially discriminate among essential and non-essential businesses. While grocery stores and those selling toilet paper were in immediate demand, most other retailers suffered. (How big were grocery stores and delivery services during the pandemic? Check out this Bold story to find out.) Cannabis industry reports tell a similar story. Early on during the pandemic, cannabis stores saw a dramatic drop in sells. And in many states, they weren’t permitted to remain open to the public. Not knowing how cannabis use during COVID would fare, many retailers worried about their ability to survive. But what happened next could not have been anticipated.
Marijuana use is now legal for medical and/or recreational use in 35 states throughout the country. With many other forms of entertainment being put on hold, consumers increasingly turned to cannabis use during COVID. Likewise, the medicinal effects of cannabis related to anti-anxiety and relaxation appealed to others. For dynamic cannabis retailers who were willing to adapt to this new environment, there were opportunities to be had. All of this resulted in a banner year for sales according to cannabis industry reports. And as far as anyone can tell, sales aren’t about to slow.
“That first week, the government didn’t differentiate between essential and nonessential businesses. Dispensaries went into panic mode, asking if they could send product back to us.” Nicolas MacLean, CEO of Aether Gardens, a Las Vegas cannabis producer
Rolling with the Changes
In terms of cannabis use during COVID, retailers faced different struggles depending on their state environment. For example, Las Vegas allowed dispensaries to reopen with weeks of the initial shutdown. But without tourists coming into the area, the typical consumer market was absent. In Massachusetts, cannabis dispensaries were not allowed to remain open even after liquor stores were. These businesses faced a different set of struggles. And for many, social distancing restrictions and general fear of contracting COVID nearly eliminated in-person sales.
Despite these changes, the cannabis industry reports a total of $17.5 billion in U.S. sales for 2020. This reflected a 46 percent increase in sales over 2019. How did this happen amidst a pandemic? To a large extent, creative cannabis retailers reinvented themselves. In Las Vegas, local residents increased their consumption of cannabis during COVID. In essence, the 2 million residents of the area replaced tourists along the Vegas strip. In other areas, online orders, phone orders, and curbside pickup saved the day. In other words, adaptability and resilience saved the day as cannabis demand profiles shifted.
“If you don’t like roadblocks thrown at you all the time, like a video game, this is not the industry for you.” – Meg Sanders, CEO of Canna Provisions
Lasting Effects of Cannabis Use Post-Pandemic
In other retail segments of the market, consumers have shifted to online ordering and have come accustomed to delivery. The same was actually true for cannabis use during COVID. Whilw quarantined at home, many consumers turned to the Internet to educate themselves more about various marijuana products and offerings. In doing so, they also took advantage of the opportunity to preorder specific products for curbside pickup. In some states, the cannabis industry reports there were delivery options available. Specifically, Eaze is a California-based cannabis delivery app that brings orders to consumers’ doorsteps. Eaze now has over 800,000 customers. Cannabis use during COVID increased their signups by 70 percent, resulting in an order every eight seconds.
These shifts in the market driven by cannabis use during COVID could have lasting effects. There is evidence that food delivery shifts in consumer patterns continue to drive specific preferences. DoorDash, UberEats, and GrubHub are prime examples of this. (Dive deeper into the growth of Uber in this Bold story.) In addition, Uber recently acquired Drizly, an alcohol delivery app. Understanding this, it might be that Uber plans additional mergers and acquisitions to expand its services. An acquisition of Eaze could allow Uber to expand its offerings to an even broader market.
“When the road is clear for cannabis, when federal laws come into play, we’re absolutely going to take a look at it.” Dara Khosrowshahi, CEO of Uber
A Driver for Federal Legalization
While the jury is still out on federal legalization of cannabis use, the subject is certainly getting more attention. With the vast majority of states now recognizing its medicinal value, the cannabis industry reports optimism for the future. This could have significant impacts on cannabis sales and delivery as well as interstate commerce. As it stands now, marijuana is still considered an illegal substance. Thus, any movement of the product across a state line is against federal law. Plus, any bank with federal support could face money laundering charges when dealing with a cannabis dispensary or producer. As a result, many cannabis businesses primarily operate in cash sales.
Cannabis use during COVID has placed greater pressure on federal lawmakers in pushing legalization forward. For one, the marked rise in anxiety among Americans during the pandemic encouraged greater cannabis use during COVID. This further supports its value in managing anxiety from a medicinal perspective. Also, the shear number of sales for 2020 that the cannabis industry reports incentivizes legalization too. Given that sales are in the billions, the tax revenues may further influence policymakers to reconsider their position. Should this occur, then it will become increasingly likely that Uber and other companies will explore cannabis growth opportunities.
Looking at Future Cannabis Industry Reports
At the current time, too many unknowns exist to accurately predict just how much growth the cannabis industry will see in coming years. But based on cannabis use during COVID, most analysts expected strong continued growth. Their predictions may be underestimations should federal legalization take place, or even if banking laws changed. But consumer demand has certainly increased in the last year along with the way customers prefer their products. Now that we’re living in the age of rapid delivery, every industry is fair game for dynamic change. And the cannabis industry is no different.
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