Cannabis and Coronavirus: Reports Analyze Pandemic’s Affect on Industry

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With fatalities in the United States numbering more than 152,000—surpassing death estimates predicted for the U.S. at the beginning of the coronavirus pandemic—and more than 4.5 million infections, there seems no end in sight to the public health crisis here and around the globe.

In the twelve days prior to July 27, the U.S. added at least 60,000 (or more) diagnosed cases daily. The U.S. currently leads the world in COVID-19 rates, but cities and populated areas all over the world are also experiencing spikes, since several countries have attempted to reopen their economies and borders after months of lockdowns.


Global COVID-19 death rates exceed 650,000, with many areas experiencing rate increases.

In cannabis-legal Australia, the City of Melbourne experienced an increase that caused officials to re-close the city. In Tokyo, Japan, which already was forced to postpone the 2020 Summer Olympics, infection rates have increased again spurring the re-closure of restaurants and entertainment venues. The U.K. has launched an anti-obesity campaign as part of its pandemic response. Other countries, including Belgium, Indonesia, China, Iran, and the region of Hong Kong also have had to re-implement restrictions as virus rates increase.

Areas in the U.S. that are experiencing resurgences of the virus have re-instituted “stay at home” measures that include business closures, limited business hours, and strict social distancing requirements at businesses that remain open.

Cannabis businesses, however, remain classified as essential services in most legal U.S. states. Pandemic lockdown orders during April and May appear to also have caused a spike in sales for cannabis products.

Industry marketing data firm New Frontier Data analyzed data from twenty-four state markets, and reported, “Average consumer monthly spending rose to record highs in April and May, reaching $290 and $296, respectively.”

Cannabis law reform organization NORML pointed out New Frontier report results indicated strong growth for U.S. cannabis markets during the second quarter of 2020, and commented, “In Oregon, retails sales of marijuana products totaled an estimated $100 million in May, the single-highest monthly ever reported in the state. In Colorado, marijuana-related sales in May totaled $192 million, also a record high. Sales of medical cannabis products in Florida and Oklahoma have also maintained month-over-month growth during this same time period.”

Report authors said growth in legal states coincided with declines of illicit sales in those markets.

In New Mexico, where medical cannabis is legal, product shortages may result, due to unprecedented demand during the pandemic. Another report by Albuquerque-based O’Donnell Economics analyzed the issues related to potential shortages.

“The pandemic substantially increased demand for medical cannabis in New Mexico, worsening the state’s medical cannabis shortage, driving up price, and negatively impacting patients,” the report found, as compiled by Kelly O’Donnell of O’Donnell Economics.

“Limited supply paired with the pandemic-induced spike in demand was accompanied by a jump in price. Between December 31, 2019, and March 31, 2020, prices jumped by 17 percent to $11.64 per gram—more than 3.5 times the average price per gram for medical cannabis in neighboring Colorado,” report results showed.

“Medical cannabis is one of few commodities the state of [which] New Mexico has complete control. [The report] recommends that the state increase the number of cannabis plants under cultivation to help meet growing patient demand,” O’Donnell Economics said.

New Mexico medical cannabis patients, the report warned, are also endangered by increased rates of mental illness including anxiety and depression, during the pandemic. According to the report, New Mexico has the highest suicide rate in the U.S., and urged more access to compassionate care.

At the end of March, statewide inventory stood at “2.6 million grams of flower and bud in the aggregated inventory of all providers,” amounting to a twelve-day supply. The state’s Lynn and Erin Compassionate Use Act, however, requires an uninterrupted three-month supply to be available from producers.

“Immediately eliminating arbitrary restrictions on plant count and patient purchase limits is the most responsible and patient-centric action regulators can take amid unprecedented pandemic pressures and increases in the cost of medicine,” said Duke Rodriguez, chief executive officer and president at New Mexico-based medical cannabis dispensaries Ultra Health. “The good news is more and more New Mexicans are seeking the cannabis care they need. Unfortunately, the bad news is the level of despair and pain is only getting worse. We need compassionate care more than ever.”

Analyzing the pandemic’s immediate and far-reaching affects has resulted in several reports and white papers, including a look at overall cannabis industry performance by wholesaler LeafLink. The report examined data from Arizona, California, Colorado, Michigan, Nevada, Oregon, and Washington. The information was culled from data gathered from a platform of “more than 5,100 retailers and 1,500 brands across 26 territories in North America.”

According to LeafLink’s report, wholesale sales figures are up 54 percent since January 2020, and retail sales have increased 50 percent since the beginning of the pandemic.

A white paper titled, Cannabis Executives & COVID-19 by market research firm High Yield Insights gathered perspectives from cannabis industry insiders, including executives at leading companies “Wana Brands, Elixinol, 4Front Ventures, Cova Software, and other senior industry leaders.”

Responses to more than 700 surveys analyzed their predictions for 2020, as well as “benchmarks quantifying the impact of COVID-19 on the industry.”

In addition, a panel of industry leaders and experts were interviewed for their insights on practices and innovation, during the early part of the COVID-19 crisis. The panel included Matthew Anderson, Gary Cohen, Jason Dyer, Linda Gee, Julie Herzog, Everett Knight, Kris Krane, Sage Peterson, Tom Siciliano, Dr. Christopher Shade, and Nancy Whiteman.

Ancillary businesses also continue to adapt to the market environment, which has been drastically affected by pandemic procedures and restrictions. Promotions and the in-store experience have been greatly changed for consumers and businesses—especially for brick-and-mortar vendors.

Point-of-sale digital platform provider GreenScreens recently launched “Service Q, an integrated, screen-based point-of-sale platform that goes beyond providing product menus and advertising by enabling real-time order fulfillment through backend screens, as consumers place orders via touchpads on the sales floor.”

The system promises immediate customer engagement for those waiting in line to access a dispensary, and brings increased efficiency to the ordering process that can shorten transaction times.

“Today, the challenges of running a dispensary are all over the map,” said Shawn Cutter, chief executive officer at GreenScreens. “There is limited space, products are varied, and many consumers have questions, making great customer service difficult. But now with concerns about coronavirus and the economy, it’s more important than ever to help guide customer decisions and fulfill orders more efficiently.”

Service Q is currently installed at two Denver-based Xclusive Cannabis locations, and is scheduled to be installed in a third Xclusive retail store.