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The COVID-19 pandemic continues to take a severe toll on populations and economies around the globe. There have been almost 5.5 million cases recorded in the U.S. and over 170,000 people have died due to the novel coronavirus. In the second quarter of this year, the United States recorded an economic output drop of 9.5%, its steepest drop on record. More than 50 million people are still out of work and new unemployment claims have exceeded one million for 19 consecutive weeks. One industry that has managed to stay relatively composed since the pandemic began is the cannabis industry. Thanks to cannabis and cannabis products being declared "essential" by state governments where medical and/or recreational marijuana is legal, the industry has been able to avoid most of the severe effects that other sectors of the economy have suffered at the hands of COVID-19.
While cannabis businesses and dispensaries might be working to produce and sell a product that is considered essential, it is still necessary to adapt to the ever-changing landscape of government regulations and consumer behavior. Now more than ever, it's important to pivot approaches and business models in order to stay solvent and ensure long-term success during these odd and difficult times.
Most dispensaries had websites prior to the onset of COVID-19, but they varied greatly in ease of use and accuracy of content. More than a few were outdated and did not provide a true representation of what products were in stock or provide an option to place orders online. Social distancing mandates mean that consumers need to get their purchases quickly, conveniently and as safely as possible. Some states have capacity limits and others still do not allow physical access to dispensaries.
Dispensaries can ease the burden on customers by providing an online ordering platform that is always current with the latest strains and products that are available in real-time. Photographs of attractive edible packaging, precise THC content of flower and bios of farmers and cultivators are great ways to attract online consumers. A few clicks and purchases can be made with ease. Furthermore, many dispensaries turn to 3rd party websites to gain further access to customers in the area. Websites like Where's Weed provide dispensaries opportunities to reach customers with high traffic volume and a strong social media presence.
Social habits and consumer behavior have changed dramatically due to COVID. With shelter in place orders and restrictions on retail access, it is imperative that dispensaries offer options like pickup and delivery. In states where recreational cannabis is legal but delivery is not, some dispensaries have set up outdoor pick-up tents to provide their products to consumers without the need to leave their vehicle. Drive-through windows are also efficient and safe and should be considered if the physical structure of the building is compliant. An improved web presence that allows customers to choose a precise pick-up time or receive an alert when their order is ready benefits both seller and buyer. Likewise, creating a reliable delivery service in states where it is a legal option for retailers is an excellent way to allow customers and patients to receive their cannabis safely. If it's not yet legal to deliver, planning ahead for when that day comes is essential.
Due to federal banking regulations, the cannabis industry is still heavily based on the flow of cold hard cash. As a result of heightened germ awareness and social distancing decrees, employees and customers are looking for ways to avoid using dollar bills. Most stores are discouraging the use of cash as a safety measure and the cannabis industry is finding ways to do so as well. With the growing resistance to cash, contactless forms of payment with mobile apps like CanPay and Hypur that do not require substantial fees are becoming popular and are a good way to address health concerns while offering quick transactions. The demand for efficient contactless payment methods will only increase and there is a hole in the market that could be filled by savvy tech entrepreneurs.
There are some countries in the world where almost everything a person might want to purchase is available in a vending machine. In Japan, consumers can pick up a pair of underwear, grab some fresh vegetables and even purchase a puppy. So, why not weed? One company in Pueblo, Colorado, is doing just that and is the first dispensary in the country to offer customers the option of using vending machines to make their purchase. Strawberry Fields now has four machines available for use at one if its dispensary locations and each machine holds over 2,000 products including flower, oils and edibles. There is no need for human interaction and purchases can be made swiftly and safely. It is certainly an arena that the retail side of the industry will most likely be exploring moving forward.
Marijuana tourism is a big business but it has suffered heavily due to the COVID-19 pandemic and its accompanying stay-at-home orders. Dispensaries that cater almost exclusively to tourists have been hit especially hard. To combat this, it's important that businesses change their marketing focus to appeal to local community customers. Specials available only to customers in local zip codes and a brand strategy that hits local publications and outlets will attract more buyers from the immediate neighborhoods and regions around the dispensary as opposed to tourists. Creating incentive programs and loyalty discounts are also ways to attract local customers. When tourists do return, they will only add to the strengthened new local base and create a diverse clientele that will result in a lasting market share.
The cannabis industry is being affected by COVID-19 in a similar manner to many other businesses, but advantageous complexities within the industry and its relatively new presence in the marketplace give it the agility to continue to make changes that have kept it solvent. This unique ability to pivot and respond to the current dynamic business environment - along with the ever-increasing demand for marijuana and marijuana products - should make its eventual recovery from the pandemic and ensuing economic fallout more manageable than other retail sectors.