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business Tuesday 21 april 2020
4/20 uncertainty: Marijuana industry tested in virus crisis

By MICHAEL R. BLOOD try has endured for years
Associated Press through times good and
LOS ANGELES (AP) — The bad, even when consum-
unofficial holiday celebrat- ers had only one option
ing all things cannabis ar- — illegal purchases. Con-
rives Monday as the na- sumers who see marijuana
tion's emerging legal mari- as part of their daily routine
juana market braces for will keep coming back, he
an economic blow from predicted.
the coronavirus crisis, with But, for businesses, there will
many consumers reducing be a "sorting out," DeAn-
spending or going under- gelo said. Companies with
ground for deals. strong brands and cash
It was supposed to be a reserves are likely to fare
long weekend of festivals better in a poor economy;
and music culminating on those saddled with heavy
April 20, or 4/20, the code debt who made too-rosy
for marijuana's high holi- promises to investors will
day. Instead, it has been face challenges.q
reduced to an online rep-
lica because of stay-at- In this Thursday, April 16, 2020, photo, wearing a protective mask and gloves, budtenders prepare
home orders to curb the orders for customers to pick-up at The Higher Path cannabis dispensary in the Sherman Oaks
pandemic. section of Los Angeles.
Virtual parties and video Associated Press.
chats are replacing vast & Recreation, said he's Cannabis Business Associa- Bridge City Collective stores
outdoor smoking sessions watching to see if consum- tion. "It's going to be very in Portland. He's hired three
to mark the rise of legaliza- ers treat marijuana more difficult for cannabis busi- more employees to handle
tion and celebrate can- like beer or toilet paper nesses to make it through home deliveries.
nabis culture. The origins of when money runs short. this pandemic." In Illinois, marijuana busi-
the annual celebration are When the economy tum- That's despite the onset nesses can keep operat-
believed tied to a group bles, beer sales tradition- of stay-at-home orders in ing under Gov. J.B. Pritzker's
of Northern California high ally spike. With toilet paper, March that sent marijuana stay-at-home order. Com-
school friends, who used panic-buying might empty sales rocketing; some busi- panies made sweeping
the code as slang for smok- shelves but people do not nesses reported single- changes that included ap-
ing pot in the early 1970s. use more of it. They just buy day records as customers pointment-only sales and
"Stay home," the National less later. stocked up. online ordering.
Organization for the Re- It will be a telling year, be- New York, San Francisco The Mission dispensary on
form of Marijuana Laws, or cause no one in the rela- and Los Angeles were Chicago's South Side saw
NORML, said bluntly. San tively new industry knows if among the cities that la- an initial spike in purchases
Francisco Mayor London sales will plunge, stay flat or beled dispensaries essen- before the lockdown took
Breed threatened arrests: even rise. tial businesses that could effect, but that's leveled
"We will not tolerate any- "Do people buy less can- remain open. off.
one coming to San Fran- nabis, or does it become But since then, business "We've never faced an
cisco for 4/20 this year." more ingrained as part of generally has flattened or economic downturn when
For businesses, 4/20 is usu- their daily life?" White said. tapered off, even with de- cannabis was legal," said
ally their once-a-year Black The uncertainty in the mar- liveries and curbside pick- Kris Krane, president of Mis-
Friday, when sales soar. In- ket poses the latest chal- ups growing to reduce sion dispensaries. "This is
stead, they are reporting lenge for an industry that's health risks. Marijuana completely unprecedent-
up-and-down buying and expanded in some form to data trackers BDS Analytics ed."
pondering an uncertain fu- all but a handful of states. documented sales surges Some customers could be
ture. The risks are spotlighted in through much of March, especially vulnerable dur-
The pandemic means the California, where business- but then consumers pulled ing an economic down-
world economy could es contend with hefty tax- back in late March and turn. Among cannabis us-
face its worst year since es, an illicit market that still early April, with sales mostly ers in states where its legal,
the Great Depression in the dwarfs the legal one and below average. 32% have incomes below
1930s. In a sign of what's to a tourism-reliant economy In recent days, some sell- $35,000 and only 54% have
come, U.S. retail sales over- that's crippled by virus re- ers reported sales jumps full-time employment, ac-
all dropped nearly 9% in strictions. as government assistance cording to BDS Analytics.
March — a record. Millions Because cannabis remains checks began reaching Anyone on a tight bud-
are out of work. illegal at the federal level, consumers. get might be more apt to
As for the holiday, "there's a most banks don't want to In Oregon, cannabis retail- avoid taxes that go with
somber feeling to this one," do business with pot com- ers saw a huge spike last legal purchases and buy
said Jordan Lams, CEO of panies and they aren't in- month — a 30% increase from illicit market dealers.
Pure CA, which special- cluded in the coronavirus in average sales per retail- Steve DeAngelo, co-found-
izes in marijuana extracts rescue package that will er compared with March er of Harborside dispensa-
and does business as Moxie help other businesses. 2019. Sales increases mid- ries in California, said it's dif-
brand products. Before the Before the virus, "we were month were even larger. ficult to predict what's next,
outbreak, "it was going to already teetering on ... an However, the peak has lev- with no template for how
be the biggest 4/20 in his- edge of a cannabis col- eled off and customers are cannabis consumers will
tory," Lams said. lapse," said Los Angeles coming in less frequently react in a deep economic
Steve White, CEO of Arizo- dispensary owner Jerred Ki- but buying more, said Da- downturn.
na-based Harvest Health loh, who heads the United vid Alport, who owns two Still, he notes that the indus-