‘Essential’ cannabis companies are seeing sales spikes during California’s shelter-in-place order

June 18, 2020by admin0

When Harborside opened its drive-thru dispensary in Desert Hot Springs last fall, the cannabis company hoped it would provide a convenient option for consumers who wanted a fast, accessible way to pick up their products.

An unprecedented statewide shelter-in-place order was not part of the plan.

“We were really trying to cater to them, and make things easier and more convenient for them,” said Steve DeAngelo, co-founder of Harborside and prominent cannabis industry advocate. “Now it turns out it’s almost the perfect virus containment mechanism.”

California’s shelter-in-place order during the global coronavirus pandemic allows cannabis retailers to stay open as an essential service. Industry experts are reporting spikes in delivery, plus larger purchases as consumers stock up to avoid making unnecessary trips outside of their home.

In a survey of cannabis companies, marketing and data firm BDS Analytics said Friday that nearly all of the cannabis retailers they surveyed — 94% — reported an increase in traffic.

The state’s Bureau of Cannabis Control said cannabis retailers can stay open unless there is a local directive that states otherwise. The BCC is also approving curbside delivery requests on a “case-by-case basis,” said spokesperson Alex Traverso, which would allow customers to pick up orders in person without having to enter a store.

Harborside Desert Hot Springs was the first cannabis drive-thru to open in Southern California under a loophole in state law that otherwise forbids such operations. The store has seen a 40% increase in drive-thru traffic since people began staying home to avoid transmission of coronavirus. While the location has a showroom, as much as 90% of their business last week was through the drive-thru.

At a time when anxieties are running high, and people who use cannabis for medicinal purposes may not be able to leave their homes, DAngelo and other cannabis experts say the industry is in a position to help.

“Making sure they have access to the medicine they rely on is important,” D’Angelo said. “I think we have a critical role to play.”

Benjamin Brayfield runs Flower Market, a Coachella Valley-based delivery service that operates from Beaumont to Coachella, and he’s seeing “an explosion” of orders. They processed as many as 50 to 60 transactions each day during the past weekend.

He might even hire new delivery drivers to keep up with the demand. In addition to overall increased sales, he’s seeing demand for wellness-type products and those with high amounts of CBD, a nonpsychoactive part of the cannabis plant that some consumers use for pain relief.

“I’m very happy that local governments and regulators recognize the medicinal value of this plant, and are allowing us to serve people,” he said. “This is what people voted for.”

Holly Tomalak of Palm Springs occasionally uses cannabis to help with some leg muscle pains induced by working out — which she’s been doing more of as she remains home.

While she and her husband were previously more likely to pick up cannabis at a dispensary than use delivery, they’ve opted for delivery through Flower Market so they can better abide by the shelter-in-place order and reduce time spent out in public.

The orders come in 30 to 60 minutes to their door, and they can pay with a debit card.

“You don’t have to worry about going out,” Tomalak said. “Anything we can do to help flatten the curve right now is a good idea.”

Jane Technologies, a cannabis e-commerce platform that works with dispensaries in California, reported that delivery sales the week the shelter-in-place order kicked in increased 46% since the same time in February, and 115% since the same time in January.

The number of first-time delivery customers increased by 142% over the same timeframe last month, Jane reported. Overall, average stores tracked by Jane’s data increased their revenue by 52% from February, and 130% from the same time in January.

Brad Davis, the chief operating officer of The Lighthouse dispensaries in Coachella and Palm Springs, said their stores are still operating. They’ve implemented social distancing among employees and customers with a maximum of 10 people in the stores at a time, and they did deep cleans of both stores on Sunday.

The dispensary also began processing delivery orders that are proving popular and have become a majority of business, Davis said.

“We have to remember for many of our customers the product they purchase at The Lighthouse is as important to them and their well-being as products they purchase at any drugstore or pharmacy,” Davis said.

The BDS Analytics survey of operators and last week reported that retailers were seeing a 50% increase in the sale of cannabis flower, especially in larger jars and strains that are CBD-heavy. Edibles were the second best-selling category, the survey found.

Around 20% of respondents reported supply chain issues.

Wesley Hein is the head of government and regulatory affairs at Mammoth Distribution, a large cannabis distribution company in California. He’s planning to press the state to allow companies to delay paying annual licensing fees — which can be hundreds of thousands of dollars — so they better stay afloat as the economy begins to head into a recession.

But he anticipated that the steady sales of cannabis would continue as people stay home and find ways to ease pain, and that the proliferation of delivery could be a lasting ramification after the shelter-in-place order is eased.

“In the streamlining of these things, people will come back and say, ‘Hey that really worked for me,’” he said.

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