COVID-19 left virtually no corner of American life unscathed. It has affected our health, relationships, and economy. Regardless of their respective industry, business owners had one of two choices once the pandemic hit: take no action and pray that their business would survive or figure out a new way of doing business.
With cannabis sales up a whopping 67%, which equates to $18 billion in revenue for 2020, it would seem that cannabis entrepreneurs have the pandemic figured out. But what did the industry do to avoid the same fate as so many other businesses, and what do those solutions mean for the future of the industry?
COVID-19 and the Evolution of the Cannabis Industry
In the wake of social distancing and quarantines, the market for cannabis-based products saw a series of pronounced shifts over the course of 2020, and not just in terms of sheer volume either. Predictably, people in recreationally-legal states began buying in bulk, purchasing much larger quantities less frequently. At the pandemic’s outset, Colorado dispensaries recorded an average of 362,000 products sold weekly. By mid-pandemic, however, that number doubled to more than 600,000.
Aside from sales volume, the pandemic changed the way that many consumers and state governments viewed marijuana products. A total of 27 states moved to consider medical marijuana use to be an essential business, allowing dispensaries in those states to remain open even at the height of the pandemic. This solved the problem of dispensaries and their sustainability during the pandemic, but it doesn’t quite address restrictive social distancing measures.
Embracing New Sales Channels
To thrive in the midst of the pandemic, medical marijuana dispensaries and cannabis retailers have had to look towards unfamiliar yet successful business models in order to stay afloat and excel.
For those operating in the brick-and-mortar landscape, success involved looking at the past and borrowing sales and marketing strategies from an unlikely source: fast food. Many physical cannabis shops and dispensaries chose to open drive-thru windows that would allow customers to adhere to social distancing requirements while maintaining personal comfort.
Retail shops also adopted modern marketing techniques used by sister companies like regional grocery stores and big-box retailers. To that effect, the cannabis industry embraced curbside pickup options wholeheartedly.
Perhaps the most profound shift for the cannabis delivery model comes from the industry’s embrace of e-commerce. The industry as a whole was already trending towards a digital sales model in line with worldwide sales trends, but the pandemic greatly accelerated its adoption of online sales methods. Savvy business owners paired e-commerce options with shipping (where legal) and onsite pickup to create a new sales paradigm centered on convenience.
Looking Towards the Future
There’s a light at the end of the tunnel regarding COVID-19; social distancing rules are relaxing as the vaccine rollout has hit terminal speed. So where does that leave the cannabis industry in terms of its current evolution?
Entrepreneurial cannabis retailers would be wise to continue the trends that brought industry-wide success in the heart of the pandemic. The term “new normal” has been used prolifically over the past year, but the cannabis industry —and the retail channel as a whole— cannot afford to go back to the old way of doing things. We have moved onto a convenience-based business model that meets customers on their own terms, and as a result, we’ve realized incredible levels of revenue. If anything, the industry’s future lies in smarter delivery methods like e-commerce, especially if federal legalization does become a reality.
Max Q Technologies is an industry leader in independent software and value-added resale with years of experience in the cannabis market. For more information on emerging trends, please follow MaxQ Technologies today
This Post Has One Comment
Pingback: How Has Cannabis Manufacturing Been Impacted By Supply/Demand Imbalances? - MaxQ Technologies