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Dispensary Sales Surge Amid Coronavirus Restrictions

Mar 18, 2020

Dispensary Sales Surge Amid Coronavirus Restrictions

To help stem the spread of the coronavirus, citizens across the world have been gathering the resources needed for a long stint of social isolation. And for many, this preparation has involved one last trip to their local cannabis dispensary.

One last batch of hash

In Washington state, USA, cannabis sales soared by 33 percent on Sunday, compared to the previous week. The number of customers buying more than $50 worth of cannabis products at a time reportedly jumped from 16 percent to 21 percent in just a week.

In California, the cannabis company Glass House Group said delivery in its Santa Barbara service area was up 50 percent from last week, and 24 percent higher in its Los Angeles area.

“A supervisor came into the break room and said he just sold $1,500 worth of edibles to one customer,” Kandice Hawes, a community outreach director for Glass House Group, told the Orange County Register.

In the Netherlands, an initial decision from the government to close the nation’s ‘coffeeshops’ this Sunday resulted in hundreds of cannabis consumers lining up outside the stores for a chance to stock up their supplies. Fortunately for those who missed out on the panic-buying, the Dutch government amended its decision on Monday night to allow for takeaway purchases.  

And in Canada, some stores in Ontario experienced a 100 percent increase in orders from the previous week.

“Not unlike major grocery retailers, Sessions Cannabis has seen a significant increase in sales this week due to growing concerns regarding COVID-19 social distancing protocols,” Sessions Cannabis’ CEO, Steven Fry, told Marijuana Business Daily.

Although not every Canadian region saw a surge in sales; a spokesperson for British Columbia’s Liquor Distribution Branch, which also operates the province’s cannabis wholesale system, said that sales had remained “very flat, steady.”


Cannabis shut down

This consumer splurge may be a welcome relief to the cannabis companies that have been struggling with high tax rates and low retail sales, but it might not last.

Heeding the advice of health officials and state authorities, many dispensaries have closed their stores (to help minimize viral transmission) and transitioned to delivery-only services. On Tuesday, Canopy Growth Corp. announced it was temporarily closing 23 of its stores in Manitoba, Saskatchewan, and Newfoundland and Labrador, Canada.

“Yesterday, my team got together and after hearing a lot of the public health advice we’ve been receiving related to limiting social interactions, in particular retail, we felt it was in our best interest for our consumers and our employees to close down those 23 stores and drive the consumer traffic to online traffic channels,” David Klein, Canopy Growth’s chief executive, told BNN Bloomberg.

Many companies are now relying on home delivery services to continue sales. Regarding the safety precautions delivery drivers are taking, Randy Rolph, CEO of Ontario-based Pineapple Express Delivery, told Marijuana Business Daily that, “all of our drivers have been fully trained on the health procedures to keep both the driver and client safe.”

“All our drivers have masks, special gloves that work with smartphones, hand sanitizer, and alcohol rubs to clean phones for every client.”

But while demand for cannabis home deliveries and click-and-collect services is expected to increase, many insiders are concerned that the coronavirus pandemic will, ultimately, be a financial blow to the cannabis industry.

“We’re in the middle of this capital crunch – this Darwin phase, we like to call it,” Morgan Paxhia, managing director of San Francisco-based Poseidon Asset Management, told Marijuana Business Daily. “And (coronavirus) is only exacerbating the situation, because it’s just causing uncertainty, just like it’s doing to the broader markets.”


Leo Bear-McGuinness

Science Writer

@LeoMcBear

Leo joined Analytical Cannabis in 2019. From research to regulations and analysis to agriculture, his writing covers all the need-to-know news for the cannabis industry. He holds a bachelor's degree in biology from Newcastle University and a master's degree in science communication from the University of Edinburgh.

 

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