People are stockpiling marijuana as the coronavirus pandemic forces everyone to hunker down in their homes, perhaps for a long time.
All around the world, there are pictures surfacing on social media of long lines outside of dispensaries. From Toronto to San Francisco to Amsterdam, cannabis products are flying off the shelves.
The old saying that vice industries — gambling, tobacco, alcohol, firearms — are recession-proof seems to apply to legal cannabis’s first big test.
‘Sales are through the roof’
Ross Lipson, the CEO of the Oregon-based online dispensary software startup Dutchie, told Business Insider he’s had record sales over the past week, and that trend is showing no signs of stopping.
“Sales are just through the roof,” Lipson told Business Insider in a Monday phone interview. “We’ve seen an uptick across the board.”
Lipson said that last Thursday — shortly after Trump declared a national emergency around the coronavirus and a day after the World Health Organization officially deemed it a pandemic — sales started to spike “aggressively.”
Dutchie blew out its sales records, setting an all-time record on Friday. That trend carried over through the past weekend, with the company’s platform handling over 50,000 orders and $5 million in transactions.
On top of that, Lipson said the stockpiling is real: The average cannabis purchase for one customer on Dutchie’s platform is about $92. The average per customer sale since Thursday, says Lipson, is $115, a 20% increase.
On Monday, Lipson texted Business Insider to say the company had broken a record, with 20,000 orders and 2.2 million in sales. That record was broken again on Tuesday, then on Wednesday, when the company took 25,000 orders. topping $3 million in sales.
“Every day this week we’ve seen an all-time daily record,” Lipson said.
While Lipson said the dispensaries he works with haven’t yet felt the supply-chain effects of the coronavirus-related shutdown, that could change quickly depending on how long the shutdowns last.
And that brings up a key question, Lipson says. While many adults use cannabis purely for recreational purposes — something that they want and are willing to travel for, but far from an essential — others do rely on dispensaries for prescribed medicine.
“What’s the classification here?” Lipson said. “Are dispensaries pharmacies? They’re in their own little box.”
Contact-less deliveries, hand sanitizer, latex gloves
On that front, San Francisco has allowed cannabis dispensaries to stay open for medical patients after including them in the citywide shutdown over the weekend. Many dispensaries around the US and Canada have moved to online only as well, according to press releases and social-media messages sent to Business Insider.
Amanda Denz, the chief marketing officer at Sava, a California cannabis-delivery service, told Business Insider in an interview that sales jumped three times over the normal amount this past weekend.
“People are worried that in a few weeks their favorite products will be gone,” Denz said.
Denz said each of Sava’s delivery drivers will be outfitted with latex gloves and alcohol-based hand sanitizers, and will be instructed to wipe down products and surfaces like door handles in between each delivery, similar to food-delivery services like Grubhub.
That customer care seems to extend to New York City’s illicit cannabis-delivery services as well. One service advertised in a text message to regular clients “no-contact” drop off service, and said each of its delivery people will carry latex gloves and hand sanitizer, according to a tip received by Business Insider.
Squeezing out smaller CBD and cannabis startups
For smaller operators in legal states, the coronavirus pandemic is creating more difficulties than a temporary sales boost can fix.
Colorado, for instance, still doesn’t allow cannabis delivery service in the same way California does. Cannabis customers in Colorado can place orders online, but they have to physically go to the dispensary to pick up their products.
Johnny Kurish, the CEO and general manager of Boulder’s Helping Hands Herbals, said he was forced to close his two physical locations.
“We’re waiting and holding,” Kurish told Business Insider over the phone. “If delivery was an option, that would save our business.”
To Kurish, the biggest challenge of having stores be closed for an indeterminate amount of time is figuring out a way to pay employees.
“I’m not holding my breath for federal assistance,” Kurish said. “They’re still working out our tax laws.”