Coronavirus is slowly reshaping the entire cannabis industry
As a business coach, I’ve worked with dozens of cannabis businesses on growth strategy and business operations. I also run a podcast focused on the cannabis industry and have interviewed over a hundred leaders in the space. With the COVID-19 pandemic in full swing, every industry is feeling pain; however, the cannabis industry has a unique set of challenges as well as opportunities in this current crisis. Here’s what you need to know about the current state of the industry:
1. Cannabis sales will continue to be erratic.
While cannabis companies have been declared essential services in most states where it’s legal, hoarding is creating swings in demand. When Massachusetts ordered dispensaries closed, there was a run on stores and over 1,300 applications for medical marijuana cards were made within ten days.
Other states such as California allowed dispensaries to stay open. Denver’s mayor initially ordered adult-use marijuana dispensaries closed, but then quickly reversed the order after lines formed creating a health risk.
Changing government policy and consumer fear will continue to cause swings in sales. Coupled with disruptions in the labor force for cultivation, processing, and shipping, cannabis product inventories will be unpredictable for some time to come.
2. Buyer behaviors will change.
Shelter in place and social distancing orders have meant that customers are not going into retail stores. Many dispensaries have moved to curbside pickup. And in states where it is legal, delivery is taking off. Technology companies that provide delivery technology are seeing a huge spike in inquiries as stores scramble to provide this service.
While some consumers will go back to visiting the store to get their weed, many will stick with the ease, convenience, and safety of delivery services long after the crisis has passed. This will also be fueled by stores that see the benefit of marketing to customers with loyalty programs provided through delivery apps.
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