The COVID-19 pandemic may be the largest ever disruptor of American life and business. As we all know, many workplaces have shifted online or shut down altogether. However, the cannabis industry occupies a unique space and while it may be outlawed at the federal level, it is considered essential in many states. Amid the unprecedented chaos, industry tech companies Vangst, Flowhub, and Leaflink have been combing through crucial data. They’ve just released a report titled “The State of the Cannabis Industry 2020: Cannabis, COVID-19 and Beyond.”
“LeafLink, Flowhub, and Vangst come together to talk about how COVID-19 has impacted cannabis,” the report said. “Each of these industry leaders will lend expertise from a different viewpoin —LeafLink from the wholesale perspective, Flowhub from the dispensary sales perspective, and Vangst from an employment perspective. Together, they will provide a deeper look at the state of the cannabis industry, and what is expected for the rest of 2020 and beyond.”
Despite all of the disruption out there, the cannabis industry has many bright spots and is apparently still growing at an impressive rate. For those who may be seeking employment or a career change, the cannabis industry may be a viable option even as the novel coronavirus continues to run its course. Below are some of the report’s key highlights:
● The industry’s 2020 growth is outpacing that of 2019. Flowhub and LeafLink data show the industry already growing faster this year compared to 2019.
● Hiring already is on the rebound. Companies Vangst surveyed reduced headcount quickly—both permanently and temporarily—but projections have bounced back within the quarter and successful Q3 and Q4 hiring will be key to 2020 success.
● Business innovation has led to growth, despite the times. In several key LeafLink markets, over 50 percent of retailers purchased more after COVID-19 hit than they did during the first few weeks of the year, and wholesale sales increased by more than 54 percent from January to June.
Although there is reason for optimism, the industry is behaving a bit differently (understandably so) than it did pre-COVID. Retailers are placing larger orders less frequently, perhaps focusing their attention more on the short term. While there are great signs for hiring overall, especially in marketing and sales roles, executive hirings have declined.
Although the customer base for other industries has dwindled, cannabis consumers are still showing up (both online and in-person).
“In many key markets, retailers are actually doing better now than they were at the start of the year,” the report said. “Cannabis may end the year ahead of original 2020 forecasts.”
The report also found that dispensary design will continue to be crucial to success. Managers need to continue to leverage expanded purchasing options that reduce in-person interaction including online ordering, delivery, and curbside pickup.
“Even when people feel comfortable going to stores again, they may feel differently about small or crowded retail spaces,” the report said. “Retailers should consider their store layout and try to find ways to increase space between customers, facilitate quicker in-store transactions, or offer hybrid models of order ahead with an in-store upsell opportunity.”
Many industries could be digging out of a financial hole for years to come. The cannabis industry actually seems to be positioned to thrive.
“The future of cannabis is bright. Despite intense changes and massive pivots, only 27 percent of surveyed companies reported decreased 2020 revenue projects while more than two-thirds of respondents have an optimistic outlook on the remainder of 2020.”
Retailers will want to consider reading more. The full report can be found here.