Despite challenges such as rapidly changing regulations, shifting public health requirements and economic uncertainty, cannabis retailers say the first year of the COVID-19 pandemic has led to beneficial changes in their business models and motivated regulators to allow new ways to serve consumers.
These new services range from online ordering to home delivery, roadside stands and even drive-throughs, all of which can help cannabis retailers maintain and even increase their sales during a pandemic.
I think it was positive, Talley Wettlaufer, senior vice president of retail at Curaleaf, the state’s cannabis operator, told Marijuana Business Daily.
From a retail standpoint, it has challenged us to adapt and create more opportunities to provide a great customer experience and continue to meet our customers and patients where they are.
These developments were considered:
Start selling cannabis online for pickup or delivery if regulators allow it.
Adapt to new buying trends, such as. B. the preference for bulk orders when shopping becomes less frequent.
With vaccination rates rising and the coronavirus crisis over, cannabis retailers are waiting to see if customer buying patterns will continue during a pandemic, and some retailers told MJBizDaily they expect at least some of these trends to continue.
It’s important for us to offer online and delivery services when we can, while still providing an exceptional in-store experience, Wettlaufer said.
Electronic commerce hinge
The COVID-19 pandemic has served as a catalyst to accelerate the retail marijuana industry’s transition to e-commerce, said Alexis Mora, marketing manager at Harborside, a California-based dispensary chain.
Surprisingly, Harborside started ordering online about a month before the mandatory public health order in March 2020.
In March, our pickups and deliveries exceeded store sales by about 30 to 40 percent, Mora said.
While online ordering has already become the norm in many other retail sectors, Curaleaf’s Wettlaufer notes that cannabis retailers as a whole are a bit behind in the transition to e-commerce.
Had there not been a global pandemic, it probably would have been slower than last year, when people really had to adapt and use technology, she said.
Regulated marijuana stores in the US and Canada are generally limited to a specific jurisdiction, so cannabis e-commerce is not yet comparable to Amazon or eBay. Legal interstate and international electronic commerce in cannabis remains a goal for the future.
But shoppers would like to buy cannabis locally online and have it delivered to their homes, if allowed, or picked up at the curb or in-store.
In some areas, the pandemic has successfully paired electronic marijuana sales with the quintessential American innovation: the drive-through.
Harborside Pharmacy in Desert Hot Springs opened a drive-thru window in late 2019, and Mora said about 70 percent of that facility’s customers use it.
When it debuted in nearby Arizona in September 2020, co-founder and CEO Evan Shahara said it started out slow, with maybe a handful of orders a day, and boomed in Tampa.
He stated that on a normal Friday over 200 tickets are handed out.
Shahara expects the campaign to remain popular even after the pandemic ends.
We are even adding a second window to meet the demand, he added.
Change in cost structure, new customers
Cannabis retail sales grew at an impressive rate during the pandemic, allowing cannabis retailers to avoid the steady decline in demand that affected other retail sectors.
But marijuana buyers have also adjusted their buying habits in response to the pandemic, with data showing they are buying less frequently but spending more per purchase.
Because people were more afraid of getting infected, they didn’t go to the stores to the same extent, and if they did, they bought wholesale, says Steve White, CEO of MSO Harvest Health & Recreation, a marijuana harvesting, health and recreation company.
Mora said Harborside saw strong performance in large-format colour, particularly the 14-gram pack, and also changes in other categories.
People don’t necessarily buy pre-rolled one-gram joints because people don’t share them anymore, she said.
What you see in terms of trends are your dogwalkers, which are your .3 or .5 (gram) packs of pre-rolls where you buy a pack and these, one for (my) friend, one for me.
In Kuralleaf, Wettlaufer noted that the frequency of client visits remained relatively stable during the pandemic. But she believes the pandemic has helped accelerate the influx of new customers, especially since many marijuana shops are now recognized as a regular service.
It was clearly a very busy time, many people were involved in many things, and people’s health and well-being was (on) the forefront.
Other external factors likely contributed to an increase in marijuana sales during the pandemic, said Jacqueline Pechota, who, as executive director of the Canadian Cannabis Retailers Association, represents a group of largely independent marijuana retailers in British Columbia.
For example, she noted that the increase in cannabis sales in Canada in 2020 correlated not only with the pandemic, but also with a significant increase in the number of licensed cannabis shops in large markets such as Ontario.
But what I’ve heard anecdotally from members of the public is that they think twice about the source of cannabis, which they didn’t have to do before the pandemic, Pechota said.
As in many U.S. markets, regulators in B.C. created new opportunities for cannabis retailers during the pandemic by allowing online payment for in-store purchases.
B.C. has a long history of illegal marijuana cultivation, and Pechota says the unregulated market is still thriving.
She hopes the provincial government will see regulated cannabis e-commerce as more than a temporary, pandemic solution and allow private retailers to offer deliveries.
I suspect that our regulators see the offer as a mechanism to compete with an unregulated market and also as a measure to curb sprawl in the community, which I think means that it will continue to exist in our new standard.
Curaleaf’s Wettlaufer expects the future of cannabis retailing to be a balance between the convenience of online shopping and the high-tech experience of in-store shopping, which is what consumers want in the wake of the cannabis pandemic.
There are days when you want to look, talk, discover, become a real buyer – and there are days when you just want to buy, and buy fast and smooth, she said.
Now that concerns about COVID-19 have subsided, Steve White, CEO of Harvest, says he has seen consumers return to stores more often and buy less when they do.
However, he suspects that we will not return to pre-death behavior because we have developed new habits over the past year.
White sees the pandemic as a test of the strength of cannabis businesses and gives an analogy to a house.
COVID is one of many unexpected weather events that will test the strength of your home, he said.
So for all who witnessed it, there may have been cracks exposed in the process – but next time, we will be prepared for the same thing to happen again.
Of course, it will never happen in exactly the same way again, White continued.
But by doing so, you have strengthened your foundation and walls to ensure that other types of unexpected weather conditions cannot damage your structure.
Solomon Israel can be reached at [email protected].