The Cannabis Recession Test

This offers the first trial of how the recreational industry performs in a downturn

In an economy that’s been on the downturn since mid-March, not many Sacramento businesses can report a spring of sunny sales numbers. Two cannabis companies that Jeffrey Dillon co-owns — Stillworx Cannabis Refinery and Condorz, a distributor — are among the few.

The COVID-19 pandemic brought more clients to Condorz, which Dillon says he and his business partner started in November 2018 under another name. Tight procedures for maintaining sanitation matter more than ever now, so they’re getting requests from other manufacturers for help with distribution. “We’ve always prided ourselves on having some of the cleanest distribution trucks in the business,” he says. Sales across the two companies rose at least 20 percent from mid-March to mid-May. In the third week of May, the company hired two more people. “April was a tremendous month,” he says.

He’s not alone among local cannabis businesses, which are reporting revenue that held steady amid the biggest economic slide since 1929. Their experience fits a pattern statewide of sales in April and May that mostly kept pace with or outperformed the year-to-date average for 2020 as a whole, according to cannabis industry data firm BDSA. Other BDSA data show even stronger performance: Statewide sales in May were 15 percent higher than those in April and 15 percent higher than May 2019, says BDSA executive chairman and cofounder Roy Bingham. Opinions in the industry vary on whether that will continue as the jobs blowout erodes consumer spending even more. But even if the pessimists are right, Sacramento’s marijuana companies may be better positioned to hold steady through this crisis than others around the state and country.

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