How the Corona Virus is affecting the Cannabis Industry
This week was an interesting one to say the least. We have seen grocery stores emptied, people socially distancing themselves and schools, ski resorts, and professional sports teams shutting down because of the developing Covid-19 outbreak. Before diving in I want to acknowledge the sources currently giving the most accurate and up to date information regarding this pandemic. Information can be found at https://www.who.int/ and https://www.cdc.gov/. With that being said, I am here to talk about the toll it is going to have on the broader cannabis community.
So what is already being done?
So far we have seen stores post statements about extra sanitary precautions they are taking. These consist of actions regarding increased frequency of deep cleanings and the removal of hands-on interaction with physical cannabis and display products wherein consumers are no longer being allowed to touch or smell any consumer-goods. Even more so we have seen a few stores take extra precautions to ensure their patients and employees safety. "Stoner & Co." a storefront located in Biddeford has recently made moves towards curbside pickup, reaffirming similar practices some breweries are committing to in the broader southern Maine region. They have limited entrance to one person at a time and are placing preference on advance orders via Weedmaps. "Cure Cannabis Co." in Auburn has outlined protocols as well, limiting customers to making purchases through their delivery style window starting today (Monday, March 16th). In addition extra precautions are being taken to inform and educate consumers of possible risks; “Cure Cannabis Co” has proactively posted signs encouraging customers that have traveled recently or have any flu and viral like symptoms to call and utilize their new delivery system. Chelsea Morrison of Cure said "We want to be part of the solution not the problem! Our highest priority is still trying to provide the medicine and care our patients need, but also doing it in a way that we're sure is safe, and healthy for our community."
Small Business Association weighs in...
The cannabis community in Maine is predominantly small business oriented. A large concern of most Mainers is how these businesses, economic back-bones to Maine, will be affected by the Covid-19 pandemic. Recently the Small Businesses Administration announced an allocation, upwards of two million dollars, in loans to help cover the extreme losses that are predicted to burden vulnerable local and family owned businesses (Dom DiFurio 2020). While progress nonetheless, this relief however comes absent to cannabis storefronts in Maine. With the assistance coming from the federal government these funds become un-applicable to Cannabis businesses as they currently lack legitimate recognition on the federal level in regards to being legal sources of income. As of right now we have heard little about assistance coming from the state level.
So what do they do?
This is where it gets tricky. Without creating alarm, the economic viability of many businesses comes into question. Communities can expect short term layoffs and massive reductions in hours for employees. This can be seen already at ski resorts in Maine where overnight seasonal employees are now effectively unemployed. Due to the adolescence of the legal cannabis market, there is a lack in historical evidence to preface any predictions on. While cannabis itself is fairly inelastic, meaning that demand remains relatively constant in correlation to changes in supply or cost, looking at a broader macro-economic standpoint as patients and consumers become affected monetarily from this pandemic, resulting in decreased cash flow, the only prediction one can make is a decrease in consumption and general consumerism. In addition, the barriers to everyday life, especially in regards to ease of travel that the novel coronavirus poses will limit the ability and feasibility for people to get out and get the products they need. Concerningly, when it comes down to it medication is normally one of the first things on the chopping block in a bid between living necessities. In hard times like these extreme uncertainties regarding the ability to maintain a roof over one's head, the ability to feed and the ability to get medication battles for importance. As a direct result of a reduction in patients, when the flow of people into stores is reduced to a certain point, owners will have no choice but to reduce hours and ultimately lay off employees; further feeding into this unfortunate reality of economic and living uncertainty.
Innovation is key!
The sky isn't falling. We can survive this as long as we innovate. We have already seen companies, like we mentioned above, offering new services like curbside pick up and walk up style windows to receive product. It is going to be a trying time, remembering that we are community and lending a helping hand will go a long way.
Host of the Maine Potcast