How is the COVID-19 crisis affecting the marijuana industry?

Photo by Martijn Baudoin on Unsplash

A coronavirus pandemic has spread across the land and to avoid hitting it head-on full-speed ahead, the US economy has slammed on the brakes. And, unfortunately, some marijuana dispensaries don’t have seatbelts. With a lack of federal relief and a patchwork of new emergency rules, where is this taking the marijuana industry?

It’s only been eight short weeks since the worldwide coronavirus pandemic ran out into the road causing the federal government and many US states to slam on the brakes. In that short time, marijuana has gone from being considered a gateway drug by many to being declared essential for public health and wellbeing by more than two-thirds of US states.

California leads the way

In a move to stem the spread of COVID-19, California Gov. Gavin Newsom ordered the shuttering of all non-essential businesses. With San Francisco being Ground Zero for the virus’ invasion of the US, Newsom was the first governor in the US to take drastic action.

Among the businesses deemed non-essential were retail shops — with the exception of food stores and pharmacies — plus restaurants and bars, gyms, salons, and so forth. And, fortunately for California cannabis companies, medical marijuana dispensaries are considered pharmacies and are therefore automatically considered essential.

But, what about recreational sales? In a bid to assure that cardless medical marijuana patients get their medicine, and to discourage California’s legal cannabis buyers from rushing back to the arms of the illicit market, Gov. Newsom chose to keep recreational shops open in the state as well.

Marijuana rules changing nationwide

As the coronavirus swept the country, many other states that have legalized recreational marijuana followed Gov. Newsom’s lead.

Most of the states with medical marijuana programs have allowed their dispensaries to remain open and/or to offer home delivery — such as is the case in Nevada where delivery is the only option for now.

Massachusetts was the first state to announce recreational shops must close their doors during the stay at home order, but medical shops were allowed to continue operations.

The reason for this decision to shut down recreational sales, according to Mass. Gov. Charlie Baker, was to prevent residents of neighboring states from coming to Mass. to purchase marijuana and risk spreading COVID-19 to other New England states.

However, It’s important to point out that a fair percentage of recreational marijuana shoppers are actually medical patients. Many marijuana medical patients in recreational states either opt not to get a medical marijuana card, or they choose to let their cards expire assuming that they are no longer needed. These patients got an unexpected and very unpleasant surprise.

As a result, many of these non-card-carrying medical marijuana users will be forced to turn to the black market to get their meds. As we all know, illicit products are rarely tested for contaminants such as mold and pesticides, putting black market buyers’ health at risk.

Mass. dispensaries are expected to reopen soon.

In my home state of Florida, we have a mixed bag. According to a local expert on Florida dispensaries, while cannabis giant Trulieve is taking a dominating position with more than 50 percent of the state’s share of marijuana sales, other well-known multi-state operations are not doing as well. For example, MedMen has shuttered five of its eight locations in the state.

Almost all states with medical marijuana programs have attempted to make it easier on patients to get their hands on the medicine by putting in place emergency rules that permit either home delivery, or curbside pickup, or a combination of both as in Florida.

Moreover many states now allow their patients to either apply for or renew their medical marijuana cards via telemedicine — that is by way of video conferencing rather than in the flesh.

A list of states that permit the use of telemedicine services for medical marijuana patients can be found here.

Some shuttered shops might not survive

In areas where dispensaries remain open, marijuana buyers are stocking up, which is good news for local dispensaries.

However, in states where marijuana shops have been declared non-essential, such as recreational shops in Mass., or where tourism accounted for a large portion of sales, as is the case in Las Vegas, many dispensaries are facing an existential threat.

One big reason for this is that marijuana is still illegal on the federal level. And as a result, cannabis companies are not eligible for one dime of the trillions of dollars in federal assistance.

Could this coronavirus response result in a sea change in Washington?

Even before the virus infested the daily news cycle, two-thirds of Americans said they strongly support legalizing marijuana. And now, more than two-thirds of US states have deemed cannabis dispensaries to be a necessity for public health and safety.

At this moment, sitting on Mitch McConnell’s desk, in a Republican-controlled Senate, are a handful of cannabis bills that were passed by the Democratically-lead House. This includes the SAFE Banking Act which was tacked onto the HEROES Act aimed at relieving economic stress.

Will Republicans get on board with Americans on this issue and take action on those bills? Or might the November elections shift the Senate to Democratic control pushing cannabis reform legislation to the president’s desk?

Unfortunately, although it does seem inevitable that some of these measures will find their way to the president’s desk, neither President Trump nor his opponent Joe Biden seem to be strongly in favor of legalizing marijuana nationwide (although Biden has put forth a weak plan to decriminalize cannabis at the federal level).

Whichever candidate wins this election, his opinion on marijuana policy is sure to shape whatever legislation makes it to the Oval Office desk.

Thank you to the fine folks at FloridaDispensaries.com for their assistance with this article.

Pace “Pachi” LaVia is a freelance researcher/writer specializing in the burgeoning cannabis industry, as well as science and future technology.

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