Deemed 'Essential,' Cannabis Retailers Adapt To Erratic Sales And Regulations
The coronavirus pandemic has forced a discussion across the country about whose work is essential, and whose isn't.
Forced to choose which businesses remain open or closed, governments that less than a decade ago deemed cannabis illegal are now treating access to it as essential during the crisis.
That's true in Colorado, the first state in the country to legalize recreational marijuana, and home to one of the most mature cannabis markets in the U.S.
The outbreak has upended how thousands of Colorado businesses keep their doors open during stay-at-home orders.
Instituted in late March, curbside cannabis pickup is a new way for dispensaries to interact with customers. In an alley behind Organic Alternatives, a Fort Collins dispensary, Alex Muller greeted the driver of a silver SUV.
"I'll get the front of your ID first if you don't mind," Muller told the man. The driver was wearing a mask. Muller donned a bandana emblazoned with his company's logo.
This snowy April afternoon, Muller was tasked with checking IDs at this makeshift marijuana drive-through. Orders are placed online, where customers can scroll through various strains, edibles, pre-rolled joints and THC-infused tinctures.
The company set up three lanes with orange traffic cones in their small parking lot. Muller directed the man after scanning his ID and using a handheld radio to talk to employees inside the shop to make sure the order was ready for pick up.
"Pull right into that slot," Muller said, "and they should be with you guys soon."
An employee scanned the customer's debit card. A few minutes later another masked employee walked out and handed a plastic box full of marijuana through the driver's side window. The SUV drove off, as four more cars lined up in the alley.
"It's honestly as efficient as we can possibly have it while still staying safe with the COVID stuff," Muller said.
A late March executive order from Colorado Gov. Jared Polis made this setup possible. Before coronavirus, there was no such thing as curbside pickup of cannabis.
"If you would have asked any of us that we would have seen something like this, we would have probably thought you were crazy," said Maka Kalai, head of marketing for Organic Alternatives.
As the coronavirus outbreak worsened in late March, and businesses braced for either voluntary or temporary closures, Organic Alternatives temporarily shut its doors. Then when Polis's order deemed access to cannabis essential and curbside pick up was allowed, they reopened and quickly assembled the drive-through system in their employee parking lot.
Even with customers ordering more at one time to stock up, Kalai says overall sales are down by about half what they would normally see this time of year.
"We're pretty aware that it's not going to be business as usual."
"We're adapting and we're trying to really figure out what that new regular number is for us," Kalai said. "But we're pretty aware that it's not going to be business as usual."
Like many other tightly regulated industries, marijuana retailers are trying to keep up with statewide orders on how to safely do business during the pandemic.
"The hardest thing to deal with has been the rapid changes in the code governing the marijuana industry," said Peter Marcus with Terrapin Care Station, which runs six dispensaries along the Front Range.
When Denver's stay-at-home order was being rolled out, Marcus says, the initial draft would've closed liquor stores and dispensaries. Under the threat of being cooped up without booze or marijuana, customers rushed to their local stores, creating long lines. The city's mayor Michael Hancock quickly added both businesses into the "essential" column.
"That day alone, we went from being told we couldn't be open anymore to, 'Sure, of course, be open,'" Marcus said.
While many shops saw spikes in March as cities, counties and eventually the state began implementing stay-at-home orders, in the last two weeks Colorado's statewide cannabis sales dropped upwards of 60%. The drop was particularly steep in the state's mountain ski resorts, which count on hoards of spring break tourists.
For Terrapin, sales remained 44% above normal the last three weeks of March, Marcus said. And those that are buying are choosing the social distance-friendly methods. Online ordering existed before the stay-at-home orders, but Marcus said it never took off. Now, even though dispensaries are allowed to have people inside their stores, online orders are booming. Marcus said he's hearing from customers that they want to spend less time in the store, or opt for curbside pick-up.
"Which shows that people are changing their buying habits just as they are with everything else around this," Marcus said.
This crisis has forced governments to categorize which businesses are necessary to remain open, and which aren't. Marcus said it's astonishing that in Colorado, cannabis has gone from illegal substance to essential service in about eight years.
"It surprises me the speed of it, but it doesn't surprise me that it happened," he said.
"States are going to realize that cannabis businesses don't need to be regulated like plutonium."
It's not just a Colorado phenomenon. Governors in Pennsylvania, California, New York and Illinois have all allowed some access to either medical or recreational marijuana during their lockdowns.
"Every single state with a regulated cannabis market has allowed access in some form or another," said Morgan Fox, a spokesman for the National Cannabis Industry Association.
This emergency will leave a long lasting mark on the industry, Fox said. Cannabis retailers are forced to experiment with new ways to get their products to customers and keep their sales up. When the outbreak is over and the public health orders are eased, some of those COVID-only precautions -- like drive-through pick up -- could stick around, he said.
"States are going to realize that cannabis businesses don't need to be regulated like plutonium and that they're more than capable of adapting to new situations and are keeping the public health in mind," Fox said.
Unlike other small businesses, cannabis retailers won't have access to the first round of stimulus money from the $2 trillion rescue package passed by Congress. Fox said national groups like his will be pushing for cannabis-related businesses to be eligible in future bailouts.
Marijuana is still federally banned. But, Fox said, more states having deemed it essential in an emergency only strengthens the case it should be legal nationwide. Pandemic or not.