While the COVID-19 pandemic has been disastrous to the economy – to the tune of $7 billion in Washington State alone – the cannabis industry is one of only a handful that flourished in the U.S. during this time.
“They are in a lot better shape than the bars and restaurants and other businesses that are struggling,” said Brian Smith, Communications Director for the Washington State Liquor and Cannabis Board.
From the beginning of Washington Gov. Jay Inslee’s “Stay Home, Stay Healthy” directive that closed schools and many businesses, pot shops were deemed essential. This was partially because medical marijuana patients need it to manage pain or other health conditions, but also to avoid making those who buy it into criminals.
“You can still get liquor in stores, but if you closed them (pot shops) down you’re basically opening it back up to the illicit market,” Smith said, as there is no legal way to purchase cannabis in Washington other than state-licensed stores.
Judging from sales numbers, people may have been willing to go underground, as in the old days, to get weed during the pandemic. Data provided by the WSLCB shows that April tax revenue based on March sales was up $7.4 million in 2020 from the same time period in 2019. April tax collections from March sales increased 20 percent over sales from February. And tax collected from cannabis sales increased $6.6 million between March collections based on February sales and April collections from March sales.
“Numbers were up considerably over last month, but month to month numbers are hard to do,” said Smith. “Washington sales are generally up maybe 10 percent over last year, and March’s sales were consistent with that. What we heard anecdotally and our numbers reflect it, is that there was a spike initially when a lot of people were worried that the stores would have to be closed. And then it backed off when people realized they would stay open.”
That extra business was a great thing for pot shop owners, but had the potential to not be for staff who risked exposure to COVID-19 from the public. In an effort to mitigate that risk, the WSLCB sent guidance to all retailers – not just those that sell marijuana – on efforts to slow the spread of the virus.
“We emphasized with our licensees the expectation of following the governor’s order of social distancing,” said Smith. “We were hearing from employees of certain marijuana stores that their bosses were maximizing their sales over their safety and health. That wasn’t the case across the board, but it was at some.”
WSCLB enforcement officers responded to those complaints and Smith says those stores did come into compliance, implementing social distancing measures such as only allowing a limited number of people into a store at one time, having a separate person other than budtenders handle money, and spacing 4/20 celebrations and sales out over a week rather just on April 20, to avoid large crowds.
Some shops helped to cut down on the number of people staff were exposed to by implementing curbside service. That option isn’t usually legal, but the WSLCB relaxed its approach in order to promote social distancing during the unusual times.
Smith doesn’t know how many cannabis retailers took advantage of the curbside opportunity as stores aren’t required to report that information, but he does know that a lot of companies expressed gratitude at having the option, along with another allowances made by the board to ease stress on the industry.
“Normally kids can’t be anywhere on the premises, but we allowed producers and processors to have kids on the premises at this time – only kids of their own,” said Smith. This was in reaction to many business owners and workers trying to care for and homeschool kids while running an essential business.
Once a county reaches Phase 4 of Gov. Inslee’s recovery plan, the marijuana industry has 30 days, then those temporary allowances go away. Smith says he has seen evidence that some industry advocates are using this time to work to get them permanently reinstated, though.
Another service many marijuana businesses were hoping to offer during quarantine was home delivery of cannabis products, but Smith says that idea got shot down.
“We even floated a bill this year (before the pandemic hit) that would allow some limited delivery for medical patients and it didn’t go anywhere,” Smith said.
An additional measure the WSLCB identified that could relieve stress within the industry was to make cannabis company owners eligible for some of the small business bailout loans that other businesses can collect. Because marijuana is still not legal at the federal level, these loans are not an option at this time.
“Our director, Rick Garza, and Commerce Director Lisa Brown wrote a letter to our congressional delegation to try to remedy that some way,” said Smith.
So far, it’s not clear if that letter had any effect, but considering that pot is one item that people still seem to be buying amidst unemployment and economic hardships, it may not be a top priority at this time.