As the country went on lockdown because of the Covid-19 pandemic, the cannabis industry saw a huge spike in business. In the beginning, people were panic buying due to not knowing when cannabis shops would reopen.
After this initial panic, sales seemed to level out and steadily increase. But this increase in demand did come with some challenges for dispensary owners and cannabis distributors.
Cannabis Industry and Covid
While many businesses struggled during the pandemic, the cannabis industry thrived. In the early days of Covid-19, cannabis dispensaries were shut down. But within a few weeks of the shutdown, many states deemed medical cannabis dispensaries “essential.” And some states allowed medical cannabis shops to remain open even without labeling them essential. This was great news for people with medical cannabis cards. Recreational cannabis shops, on the other hand, had to wait until non-essential businesses were allowed to reopen in their states.
Covid Cannabis Highs
The essential designation greatly helped the industry. By being labeled “essential,” the stigma on cannabis was removed and more people are becoming excepting of its beneficial uses.
Panic buying decreased drastically in states where dispensaries were labeled essential. However, with the country on lockdown, the demand for cannabis continued to go up. After all, people were stuck at home with nothing to do. In fact, cannabis sales went up 40% from 2019 to 2020.
The pandemic wasn’t the only reason for a spike in demand. During the November election, legalization bills passed in all of the five states that had them on their ballots. While these bills didn’t go into effect until 2021, cannabis distributors still needed to prepare and be ready for the increase in demand.
Covid Cannabis Lows
The increase in demand and sales wasn’t always smooth sailing. Covid brought some new challenges to the industry, including:
- Delivery: With everyone in quarantine, dispensaries faced the challenge of getting their products to the consumer.
- Product shortages: Cannabis distributors shut down until Covid guidelines were put into place to create a safe working environment.
- Staff shortages: Distributors and dispensaries faced staffing shortages.
- Paycheck protection: Cannabis businesses aren’t legal on a federal level. When the Paycheck Protection Program was passed, the cannabis industry was left out.
Also, the pandemic was the focus of election year 2020. Cannabis wasn’t mentioned during the political campaigns. While bills were passed in five states, there were many other reforms and legislation that got delayed or abandoned altogether.
More work needs to be done on the federal level to help the cannabis industry. However, as more and more states legalize cannabis, the chances of federal legalization grow.
Thankfully, the cannabis industry quickly came up with innovative policies to meet the demand during the lockdown, including:
- Online ordering with curbside pick-up
- Home delivery
- Prescriptions via telemedicine
Guidelines were put into place to help create safe working environments for growers and distributors.
Bespoke Financial Can Help
Covid proved the cannabis industry can both survive and prosper during a pandemic. As the industry grows, so does the demand for new technology and product. Bespoke Financial is here to help you grow your business by offering CBD business loans. Whether you need inventory financing, purchase money financing, or invoice financing, we’re here to meet your needs.