What the Cannabis Industry’s Overnight Transition Teaches Us About the New Retail

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The Covid-19 outbreak upended daily business operations and consumer habits in nearly every industry. In the world of legal cannabis, restrictions on business and travel are creating seismic shifts that could potentially restructure the unique culture and idiosyncrasies that define the industry. Dispensaries are quickly pivoting to ecommerce to stay competitive, consumers are starting to stray away from inhalable products and an increasing number of corporate acquisitions will transpire in order to maximize resources and supply chains in this period of uncertainty.

It is becoming increasingly feasible that many of these quick responses to health and safety concerns will emerge as lasting industry practices even after the pandemic subsides. Both cannabis companies and consumers have recently transitioned to a less social way of interacting with the plant, a stark departure from the established norms of the industry that predates the legalization movement. Considering how many business leaders and consumers embrace these changes, it is likely that these new practices will pave the way for a more modernized and accessible legal cannabis industry.

This pandemic has seemingly catapulted the role of legal cannabis in modern society to the forefront of national discourse.

Retailers get a digital boost

Before social distancing guidelines swept the nation, the majority of dispensaries were brick-and-mortar operations that relied heavily on foot traffic and cash payments to conduct business. Granted, this was not done by choice for most retailers. Local regulations created burdensome obstacles for dispensaries to obtain delivery licenses or advertise online, and federal laws prohibited large banks and credit card companies from engaging with the industry.

Cannabis’ classification as an essential business provided a critical opportunity for retailers to stay in business in a compliant way. When states started imposing retail restrictions and store capacity limits, dispensaries were suddenly forced to shift their entire businesses to an ecommerce model that provided delivery, or at the very least, curbside pickup. Many dispensaries had to make the transition nearly overnight to keep up with safety guidelines and consumer demand, which was at an all-time high during this period. Cannabis ecommerce platform Jane Technologies reported that the number of new users ordering online increased by 142% in March as several states were imposing lockdown measures, for instance.

Although cannabis businesses frequently rely on in-person interactions to educate consumers and the media about products, many have relocated their sessions to a virtual setting to keep customers informed and safe. In the past month, dispensaries began offering telemedicine consultations with budtenders and utilized social media to livestream events and product demonstrations to maintain customer engagement. Product companies like Curaleaf also took a similar approach and chose to host desksides over Zoom to publicize new product launches and safe consumption methods to a wider audience of reporters. As consumers grow more accustomed to these newfound conveniences, it is unlikely that retailers will revert to their brick-and-mortar model after social distancing restrictions are eased.


Curaleaf started to offer virtual desksides to prospective customers.

The pandemic also highlights one of the most cumbersome aspects of the retail industry: the prevalence of cash payments. In recent weeks, numerous business owners and lawmakers have underscored the need for cashless payment options to mitigate the risk of transmitting the virus between store employees and customers.

Rep. Ed Perlmutter, D-Colo., who cosponsored the Secure and Fair Enforcement (SAFE) Banking Act that allows mainstream financial institutions to provide services to legal cannabis businesses, is pushing for Congress to revisit the bill in upcoming stimulus hearings. Passing the SAFE Banking Act would not only allow cannabis businesses to move to cashless transactions but would also legitimize the industry on a financial level. Reforms in this sector are long overdue, and these recent developments show how businesses, consumers and lawmakers are ready to integrate these changes for good.

Safety and affordability take a front seat

Fears over contracting the virus and looming economic uncertainties have significantly shifted consumer habits in the past few weeks. According to Headset, one of the leading data and analytics providers in the industry, non-smokable products like edibles and beverages have experienced the largest increases in demand in April. At the same time, sales for pre-rolls and other inhalables have decreased since the outbreak of Covid-19, which is likely connected to media coverage around the link between smoking and contracting respiratory infections.

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