COVID-19 Pandemic: Weed Sales Steady, But Industry Worries Mount - Rolling Stone
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Weed Worries: Cannabis Sales Are Steady — for Now

People stocked up before lockdowns went into effect, and delivery is strong — but as the coronavirus pandemic progresses, cannabis businesses aren’t in the clear

A budtender displays cannabis at the Higher Path medical marijuana dispensary in the San Fernando Valley area of Los Angeles, California, December 27, 2017. - At the stroke of midnight on January 1, pot lovers in California may raise a joint, instead of a glass of champagne. America's wealthiest state is legalizing the growth, sale and consumption of recreational marijuana, opening the door to the world's biggest market. (Photo by Robyn Beck / AFP)        (Photo credit should read ROBYN BECK/AFP via Getty Images)

The cannabis industry faces new challenges as supply chains and tourism dry up.

Robyn Beck/AFP/Getty Images

On a rainy evening in Los Angeles, the flagship store for Genius, a cannabis brand catering to hipsters and tourists on Melrose Avenue, is empty. A lone budtender wearing latex gloves stands behind glass display cases in the middle of the showroom, surrounded by vapes and edibles and jars of flower. An occasional passerby glances into the bright storefront, then hurries past. “Last Saturday was actually our busiest day in months,” the night manager Billy says. He brightens up as three young people enter the shop, and asks to see their IDs. “What are you guys buying tonight?” “Packwoods,” says one of them, pointing to the potent kief-dipped blunts on a glass shelf. The budtender rings them up, and they duck out into the night.

The impact of coronavirus on the cannabis industry is difficult to measure at this early stage. According to a report in Marijuana Business Daily, consumers have stocked up on weed and are staying home. Eaze, a cannabis delivery service that operates in California and Oregon, has seen a recent spike in commerce, says company spokesperson Elizabeth Ashford. Leafly reports that cannabis stores are experiencing a dramatic surge in sales, with customers lining up outside New England Treatment Access (NETA) in Brookline, Massachusetts. But Eli McVey, a senior analyst for Marijuana Business Daily, says cannabis sales are “about ordinary” right now: “If I didn’t know coronavirus was happening, there’s not a lot that would say to me, ‘There’s something going on here.’”

According to New York publicist Melissa Vitale, public interest in cannabis, at least, has surged in the last few weeks. “We’re seeing an increase in stories like ‘how to smoke a joint in the time of coronavirus,’” she says. Her client TribeTokes, a CBD vape company, has seen a noticeable increase in e-commerce sales. And water pipe manufacturer Heir has increased revenue 200 percent in bong sales, compared to March of last year. 

While cannabis sales are steady, there’s an issue that will affect the weed industry in coming weeks: the supply chain. Factories in China were severely impacted by the coronavirus, with millions of workers quarantined and production halted. Although some factories have opened up again, they’re operating well below capacity, according to the New York Times. Cannabis manufacturers and distributors that rely on packaging and hardware from China have been notified of upcoming shortages. Eel River Organics CEO Jeff Guillot says the Northern California company expects to see disruptions in business operations until the impact of the coronavirus is fully understood.

Some brands are having to put off launching new products due to supply shortages. California cannabis brand GRLCVLT was just about to release a new preroll. “We’ve been ramping up a grand plan for a really cool release, and now we can’t get the packaging,” says GRLCVLT president Annaliese Nielsen. “We’re having to roll out a really simplified version — as a baby-size brand, that really sucks.”

Rama Mayo, founder of cannabis creative agency Green Street, anticipated the packaging shortages after a trip to China several weeks ago. “My contact at the factory told me that this was much worse than people were letting on, so we switched to vendors in the U.S.A.,” Mayo says. “I’m excited to see if the American companies can keep the new business.”

On the cultivation and distribution front of the cannabis industry, many growers and other employees can’t do their job offsite, so companies are taking precautions to keep workers safe. Tiffany Devitt, a spokesperson for NorCal company CannaCraft, says they’ve implemented robust workplace safety procedures, sanitizing common areas multiple times a day and doing wellness checks.

Because of social distancing requirements, weed events have shut down around the world. Spannabis, a cannabis festival held every spring in Barcelona since 2002 that draws upwards of 30,000 visitors, pulled the plug on the event less than 48 hours before its planned start, when authorities suspended all gatherings larger than 1,000 people. On March 6th, SXSW cancelled its annual conference as industry professionals prepared to head to Austin for the fest’s cannabusiness track, which included sessions on the “technological, cultural, financial, legal and political ecosystems that are defining the cannabis-focused enterprises of both today and tomorrow.” The B2B cannabis trade show Hall of Flowers in Palm Springs was cancelled. And the NoCo Hemp Expo, which was expected to attract over 20,000 people over three days in Denver, Colorado, was pushed from late March to early August.

NoCo Hemp Expo producer Morris Beegle says the event’s postponement is especially tough on hemp breeders who attend the March event to sell seeds and clones to farmers for spring planting. “They’re scrambling to try to move their seeds,” Beegle says. “We’re going to help them with marketing online.”

The High Times 420 Cannabis Cup scheduled to take place April 18th to 19th in Sacramento has also been postponed. Instead, says High Times VP of Content Jon Cappetta, “We’re trying to be proactive in creating safe, virtual experiences to celebrate our favorite holiday. We’re already working on tons of plans that will connect us all.”

With travel grinding to a halt, cannabis tourism companies are struggling. Keenan Hall, founder of The Movement Tours in Vancouver, Canada, says bookings have slowed down significantly, and cannabis cultivation facilities have closed their doors to all non-staff members, affecting his grow-op tours. April Black, owner of Higher Way Travel, says over half the guests for an annual 420 retreat in Jamaica called Baked on the Beach have dropped out: “It looks like we’ll have no choice but to postpone the event.” On a bright note, the Los Angeles tour company Weed Bus L.A. experienced record bookings last weekend as events around the city were cancelled, and tourists sought out other options. Now that the city is basically on lockdown, owner Brett Davis is focusing on online marketing, he says, “Hopefully reaching the many Americans that are at home, cooped up and dreaming about their next getaway.”

McVey, the analyst, says he anticipates that if the supply of cannabis diminishes due to slowdowns in distribution, and consumer demand continues to increase, prices will rise. Beyond that, he says, it’s too early to tell how the coronavirus will affect things. “I think we’re going to start to see changes in the next couple of weeks,” he says. “That’s when we’ll see how it’s going to impact the cannabis industry.”

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