It’s been one year since the start of the COVID-19 global pandemic. These circumstances have created a huge set of complex challenges for anyone in the cannabis business to navigate, from workers and their families to management and owners, let alone vendors and ancillary businesses.
But the pandemic helped drive home the fact that for millions of people, cannabis and its derivatives are essential. Over the past year, COVID has rocketed the industry forward in ways that probably would have occurred eventually, but over a much longer timeframe. Many patients in legal states depend on medical marijuana programs as part of their health care, leading to cannabis being deemed an essential business — something previously unthinkable. As a result, many operations had to adopt home delivery programs, create contactless payment and credit or debit payment options, begin offering curbside pickup and allow customers to place orders online or by phone to help manage the necessary contact limitations.
All of these elements required fast, effective legal maneuvering to keep operations in compliance with multiple sets of new regulations and safety guidelines. For the majority of cannabis operations nationwide, the biggest change was not the increased regulatory requirements for social distancing, sanitation and safety, but handling a double-digit increase in product demand and sales under circumstances that include financial and staffing stress. That’s no easy feat for a largely cash-based industry.
The 2020 elections also threw new elements into the mix, as four new states legalized cannabis for either medicinal or adult-use and Arizona expanded to include recreational sales. New licenses and operations also required a lot of legal work to effectively prepare for the future, all while managing the present during a pandemic.
We see more than a few things adopted during COVID that we believe will stick around:
– Permanently adopting stricter operational guidelines and establishing best practices for serving those more vulnerable or susceptible to illness (coronavirus or not).
– Keeping protocols and protections in place for employees — not only keep them safe but also to maintain the health of all employees at all times.
– Curbside pickup, delivery and ordering ahead (online or by phone) is definitely here to stay. Consumer demand for convenience was already driving this trend pre-pandemic, and COVID-19 simply accelerated the timeline for implementing these practices.
– Managing how many customers are in a store any given time. Large crowds only increase wait times and result in a less-than-desirable consumer and employee experience for everyone.
– Expanded ordering options allow for tighter management of staff time as well as effectively managing and controlling customer flow in and out of dispensaries.
The industry has changed forever, but it’s still a work in progress. According to a recent study by New Frontier Data, the cannabis industry will reach approximately 50 million U.S. cannabis consumers by 2025. That’s a lot of demand to fulfill, and supply chains will need to be established or enhanced. Legal sales of cannabis in the current legal states alone are projected to reach nearly $30 billion by 2025. And by then, the total combined U.S. market opportunity for legal cannabis sales is estimated at $172 billion.
With so many new markets opening each year, we anticipate many more shifts in the industry as it matures in some states and launches in new ones. Social equity programs are becoming even more essential, and the financial side of the cannabis space still needs to be addressed through reform.
There remains a lot to do, and we must all work together to determine how to keep advancing the industry. There’s no textbook you can go to and find the answer. You have to be in it.
And we’re in for the duration.
Laura Bianchi is one of the nation’s leaders in the complexities of cannabis law, business, compliance, and operations. Her groundbreaking work in the industry began with the 2010 passage of Arizona’s medical cannabis law.
Justin Brandt is a top-rated, award-winning attorney, entrepreneur and leader in cannabis law and business litigation. He leverages his extensive business economics and accounting background to represent clients through all stages of business growth, expansion and operations.
To learn more about Bianchi & Brandt, visit bianchibrandt.com.