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Legal Cannabis: The Unsung Hero of Quarantine in America

With social distancing and staying inside a new normal; how have American cities and citizens responded at a socioeconomic level with legal cannabis?

Read our analysis from review of industry insiders, recent news articles, and our interactions with our clients.

It is clear that cannabis is an essential item for the American people and now there is proof!

 

Uncharted Waters for the World

The world officially came to a screeching halt this month when COVID-19 became a global pandemic.

It was the first time the world had ever had to shut down in this capacity. With 21st century technology and social media, ingesting information has been overwhelming to say the least.

At the core, this virus is a global health pandemic and as counties begin lockdowns, essential businesses have become more “essential” than ever.

Looking at a brief list of essential businesses for most big cities it is noticeable all of these businesses are city-received taxable businesses, meaning cities use these taxes for their needs from these businesses.

Essential needs for humans in the 21st century include: gas stations, grocery stores, drug stores, liquor stores and now cannabis.

 

Cannabis Business Booming in Recession

The partial legalization of cannabis federally can also cause some grey area.

Medicinal reasonings have been the main basis for cities establishing dispensaries as essential. Yet, smoking cannabis is now seen as a nightcap and a stress relieve, but there are still mixed feelings about it being either taboo or totally loved. It’s actually a perfect scenario for most “stoners”. Being required to spend time at home, is an exciting request for most people who use cannabis, since their couch or home is one of the common area they will consume and relax. There is literally not much else to do in a quarantine!

Business has been booming for cannabis retail and delivery as people stock up on their essential items like food, gas, and alcohol. Both traditional (illegal market) and the legal market are seeing a higher demand for product than previously.

A study of U.S. marijuana consumers by AmericanMarijuana.org found:

  • 28% – of the 990 participants would rather value marijuana above face masks.
  • 83% – of the participants would rather choose toilet paper over marijuana.
  • 5% – of the same participants value marijuana above food during these times.
Source: https://americanmarijuana.org/marijuana-use-coronavirus-covid-19-pandemic-study/

Dispensaries being left open during the COVID-19 era, is a healthy, fresh, breath of air for advocates who have worked so long to get cannabis legalized.

Now more than ever, the industry is clearly here to stay for the long haul and is now an important aspect of the framework for legal cities. Many say the world will be different after we recover from the virus, and now cannabis has officially made it’s mark as an essential business to the population.

 

This table highlights a few legal states and their regulations for cannabis at time of writing this article:

State State Regulation
California
  • Retailers are deemed as essential businesses
  • San Francisco and Los Angeles have also said retailers can continue operating
Michigan
  • Curbside deliveries and curbside sales are allowed
  • No retailers allow in-person transactions
New York
  • State deemed medical retailers as essential and are not subject to close 
  • Carry out home delivery is temporarily allowed 
Oregon
  • Curbside delivery is allowed 
  • Cannabis worker permits are now much easier to obtain per new regulations
Washington
  • Cannabis businesses were deemed essential
  • Dispensaries may do carry out service

Temporary Curbside Pickup for San Diego Retail

As of March 26, 2020, cannabis retailers in San Diego can now deliver to customers parked in their parking lot safely using the following steps:

  • Customers will place orders online and select delivery to the parking lot. Customers will select an available pickup time and provide a description of their vehicle and license plate number.
  • At their pickup time, customers will arrive at the parking lot and wait in designated spots as close to the store’s entrance as possible. These spots will be well lit, covered by security cameras, and watched by an armed guard.
  • The retailer and customers will communicate over text message or the phone that the customer is ready.
  • The retailer will send an employee with the order, under the watch of the guard, and the exchange will occur.
  • These temporary measures will be allowed for the duration of the public health emergency, or until revoked by the Director.

 

The State Bureau of Cannabis Control (BCC), as temporary relief pursuant to the Governor’s emergency declaration regarding the COVID-19 outbreak, is now waiving BCC regulations for 30 days for licensed cannabis retailers to deliver orders to customers waiting in their vehicles to promote social distancing for the good of both consumers and employees. BCC is allowing this deviation from their regulations temporarily as part of their emergency disaster relief powers. In California, retailers in Oakland, San Jose, Sebastopol, Alameda County, Santa Clara County, Santa Cruz County, and Los Angeles are all delivering to customers in their vehicles temporarily. – Elyse Lowe, Development Services Department Director in The City of San Diego Memorandum

 

The Train Keeps Churning During Quarantine

Understand a train on its tracks. It keeps chugging along from point A to point B.

Cities, despite a global pandemic, realize there are still needs for their citizens, no matter how harsh life may get. Metropolitan giants such as Los Angeles, San Francisco, and New York have realized, to put it simply, that they need vices to distract themselves from the craziness.

According to Los Angeles’s COVID-19 website FAQs, essential businesses include: gas stations, healthcare, and interestingly enough cannabis dispensaries. Several cities have also implemented curbside delivery for customers as well.

Several interesting outcomes come directly from the “Stay-At-Home” order that several governors have signed into law. Supermarkets have skyrocketed in sales and have been overwhelmed, while the retail dispensaries have also seen a major uptick in sales and traffic. This past week brought in more sales for dispensaries than 4/20, a popular “stoner holiday” about cannabis.

 

Cannabis Reinforced as an Essential Business

It this point no one knows how long we really will be sitting behind our home desks. No one knows how long the streets will be empty. No one knows how much longer people will be able to handle this quarantine. Despite life as we know it changing exponentially, one thing is certain, cannabis is now an essential business within cities that have legalized it and will not be going anywhere.

While this tragedy continues to evolve, the people have shown that they need to have the cannabis industry, and it is to be a staple of our future as a country.

As other industries are floundering to survive in this recession, there remains a huge opportunity for profiting in this young and growing market.

As other industries are floundering to survive in this recession, there remains a huge opportunity for profiting in this young and growing market.

 

The Highest Light at The End of The Tunnel

The virus has led to a remarkable uptick in cannabis stocks!

Before most governors began announcing stay at home restrictions, prior to 3/13/20, the market had gone into a freefall. By Friday 3/20/20, stocks of some public cannabis companies had seen an uptick in their prices. Below is a table illustrating some trends of public companies.

Sign on NYSE 3/19/2020 (9:30 AM PST) Stock Price 3/23/2020 (4:15 PM PST) Stock Price Percent Change
(TRST.TO) .55 .7 21%
(CANN) .275 .404 27%
(CGC) 9.613 12.50 23%

Yahoo Finance Source

These increases on the market have been an uplift of hope in a dark market that appears ready for recession.

 

Cities and Municipalities Appreciate Extra Taxes

As Americans reach uncharted waters during this crisis, cannabis seems to be a backup for cities as well.

Tax rates have become an industry indicator for which cities would allow for the most return on investment from providing cannabis operations.

Since legalization in 2016, states have slowly begun legalizing cannabis. California in particular has become an important case study as the coastal cities have legalized; yet, the inland cities have slowly been or are in the process of legalizing recreational use.

Some municipalities such as Sacramento County have implemented interesting tactics for their essential businesses to still operate and attempt to stay afloat. The Sacramento Bee reported that cannabis retailers have been adding roadside deliveries to help customers with their needs.

Human beings are now entrusting each other to stay at home and do their part in “social distancing,” and as life moves on, we should also continue to let progress move us forward. Cannabis is now a state right, a controversial issue that was a foundational cause of the Civil War, which means states have several questions on how they wish to move forward while the future of our whole country is in question.

 

How to Get Involved? Join Us!

The future is bright and this essential business has huge potential just like the alcohol prohibition. 

We recommend you join our newsletter and connect with our team to better understand how we work with owners, operators, and investors to predict future trends in the industry. Our team has a vast knowledge of cannabis compliance, cannabis regulations, cannabis mapping, and long-term business growth.

 

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