Cannabis Sales Have Been Helter Skelter During Shelter-In-Place

Buying and selling cannabis has been turned upside down by quarantine orders, odd new delivery rules, and of course, a hand sanitizer shortage.

The cannabis industry breathed a big puff of relief when marijuana was established as an “essential business” last month. After Mayor London Breed changed course to add dispensaries and delivery services to the “essential” list after one day of shelter-in-place, Gov. Gavin Newsom applied the same “essential” designation when he made his statewide stay-at-home orders. Legal marijuana states Colorado, Illinois, Michigan, Oregon and Washington followed suit when declaring their own shelter-in-place orders.

And shelter-in-place brought gangbusters business to dispensaries in those states — but only for the first few days. 

“We had one of our biggest days ever yesterday,” Sparc owner Erich Pearson told us on March 17, the first day of shelter-in-place orders in San Francisco, “Delivery was up two-times [normal business]. In-store pickup was up like 80 percent. Foot traffic in the stores in general was up.”

That pattern held true in every legal state, according to Roy Bingham, CEO and co-founder of  BDS Analytics, which collects sales information from hundreds of dispensaries nationwide.

“We saw about a 30 percent increase in sales from Friday, March 13 to Monday, March 16 relative to the normal activity the week before,” he tells SF Weekly. “That four-day period in terms of volume was similar to the 4/20 period, which has always been the highest phase for the industry.”

In terms of which pot products are people buying, “All categories increased, but the most outstanding were flower and edibles,” Bingham says.

Here in San Francisco, at the delivery service Sava, they are moving more stress-alleviating flower strains and indica gummies that help you sleep.

“We’ve seen an increase in sleep products and products for anxiety,” says Sava co-founder and CMO Amanda Denz. “And as always on our platform, people are buying a lot of edibles.” 

However, the industry experienced a rapid come-down as March progressed, and sales have stayed relatively low since, according to the latest numbers 

“We’re now starting to see that drop-off,” says BDS Analytics SVP of commercial development Jessica Lukas. “Really starting on Sunday, March 22.”

That drop-off in business hasn’t only hit cannabis. Other essential business sectors like food, drugs, beer, wine, and other retail items saw their business drop after the first week of shelter-in-place. “The number of shoppers is declining. Yet that basket size, that value of each shopper [purchase], is still high,” according to Lukas. 

We’ve all seen pictures on social media of the empty toilet paper shelves at grocery stores. Dispensaries are experiencing shortages too, but not of marijuana products. Like you, they’re having trouble finding hand sanitizer.

“The issue is supply of non-cannabis items, the hand sanitizer, toilet paper and general items that they need,” according to Bingham. “None were saying that they were experiencing supply shortage of cannabis products.”

The hand sanitizer shortage is so severe that some dispensaries have resorted to making their own. Sparc is whipping up their own stash of sanitizer in a lab, and also donated ten gallons of it to San Francisco and Sonoma hospitals.

The sudden demand for hand sanitizer is one of many ways that coronavirus has changed the local dispensary business. At the Apothecarium locations in town, where the staff are assigned to constantly sanitize counters, kiosks, and ATMs, the store is only accepting advance, online pickup orders to avoid crowded shops.

What happens when people inevitably just show up, not having placed their order in advance?

“Staff either direct them to make an order on their phones, or they can use one of our kiosks and even get help from a consultant at a safe social distance,” Apothecarium spokesperson Eliot Dobris tells us. “For folks who may have difficulty making an online order, we can take an in-store order, but we strongly encourage online orders for everyone who can.”

Not every dispensary has adopted the pickup-only policy, but many are limiting only three customers in the store at a time. You may still see lines outside dispensaries, even though these stores are far less crowded than before. That’s because delivery and in-store pickup has suddenly and almost completely replaced in-store marijuana shopping.

Yet delivery is now a far more hilariously awkward proposition since the San Francisco Office of Cannabis sent out an unconventional new set of delivery rules that took effect March 22.

“Upon arrival, drivers are to text customers,” the order declares. “Drivers should then place a small plastic box or tray 6ft in front of customer and back away 6 ft. The customer should place payment and ID in the container, and step back 6ft.

“Drivers should verify ID, confirm payment, return any necessary change in the box and place the customer’s product next to the box, and then step back 6ft. Customer should then take product, ID and any change.”

This is of course a huge pain for delivery drivers, though after a bumpy rollout, it seems to be working.

“At first it was a bit of an awkward dance on some deliveries, and took some explaining,” says Sava’s Amanda Denz. “But people have adjusted, and drivers say it’s working well.” 

Owners say cannabis sales still remain healthy, primarily because during shelter-in-place, many San Franciscans have little to do but sit home all day and get stoned.

“Once they’re locked up at home, they may consume more,” BDS Analytics’ Bingham tells us. “There’s an absence of alternatives, people can’t go to yoga, can’t go to the gym, can’t do the other things they do to be healthy or relax.”

This could hold up, “unless a recession impacts people’s ability to purchase,” he says. “The big question is whether cannabis is recession-proof. Traditionally, the idea is that alcohol is. Could cannabis be like that? I’m sure it will not suffer the way other products will.”

But as the number of Americans applying for unemployment increases, it’s unclear exactly what will happen to the cannabis-buying habits of consumers. Pot-smokers don’t typically have a ton of disposable income as it is. BDS Analytics estimates that 60 percent of cannabis users nationwide make less than $60,000 a year.

All of this could deliver a devastating hit to marijuana sales a month, two months, or six months down the road if the economy does not recover. The state of California has declared cannabis “essential,” but we’ll see if shoppers feel the same way if money gets tight in a coronavirus recession.

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