Jar shops are considered “essential” businesses in most states where it is legal, but the rules are changing

When California became the first state to issue a shelter-in-place due to the COVID-19 pandemic, it set another standard by declaring cannabis a “business essential.” But just as overall state responses to the pandemic have varied from California’s original tenure, so have the marijuana rules.

California Governor Gavin Newsom ruled that dispensaries should be treated like pharmacies, but also kept recreational sales open, with cannabis companies adopting safety measures such as curb pickup, delivery and distancing in retail stores. Nicole Elliott, Newsom’s senior cannabis advisor, told MarketWatch that California wants to continue offering medical marijuana users their prescriptions and recreational smokers an alternative to the black market.

“Recognizing that patients need access to this drug, as well as the importance that consumers continue to have access to legal cannabis made safer by our regulated market, the governor has deemed the cannabis industry essential,” Elliott said in a statement.

While other states with legal sales of recreational marijuana followed suit, Massachusetts went the other way: out of the few states with recreational pot in the northeast. Gov. Charlie Baker authorized continued sales of medical marijuana with new store security measures, but closed sales of recreational jars and has no plans to reopen those businesses four years after voters expanded legal access to drugs.

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Aside from Massachusetts, the other eight U.S. states that allow recreational cannabis sales had all deemed recreational pot retailers essential as of Monday afternoon, although Maine has yet to open any recreational pot stores and the Congress prevented Washington, DC, from implementing a recreational pot regime that was adopted by voters. In another approach to managing the pandemic, Nevada has closed all retail stores and is only allowing delivery for recreational and medical cannabis sales.

Canada provides an example of the changing nature of marijuana sales amid the pandemic. Ontario, Canada’s most populous province, had deemed cannabis retailers essential, but said on Friday it would close jar stores and only allow online orders from government-run stores with postal delivery , following similar decisions in Newfoundland and Prince Edward Island. Ontario Ministry of the Attorney General sought to allow curbside pickup as a result of this decision, however.

Although face-to-face retailing has been closed in Ontario, licensed producers in Canada continue to operate as many of the larger companies are based there, including Canopy Growth Corp. CGC,
-6.27%
GRASS,
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– which previously announced the closure of all stores it operated – Aphria Inc. US: APHA

CA: APHA
and Cronos Group Inc. CRON,
-5.12%

CRON,
-4.75%.

In states where only medical marijuana is legal, the vast majority said patient access was essential; those who did not make specific statements had not moved Monday evening to stop operations. Some, like West Virginia, do not yet have fully functioning medical cannabis programs.

“In the 33 states that have legalized medical cannabis, patients must purchase drugs for cancer, epilepsy, [post-traumatic stress disorder], and other conditions, ”Randal Meyer, executive director of the Global Alliance for Cannabis Commerce, said over the phone. “There is a good reason that cannabis [retailers] be treated like pharmacies. The basis is medical.

How the industry is dealing with the coronavirus

Industry insiders interviewed for this story said that, as with other products, like groceries, it would be possible for the coronavirus to survive on cannabis packaging, although there does not appear to be any specific information on the ability of the virus to survive on the cannabis flower. itself, or if so, for how long.

Employees are likely at greater risk than consumers, and several employees in the pot industry across the country have already tested positive for COVID-19. Growing operations have been forced to take measures to reduce the number of employees working at the sites in order to protect workers and the community. Canadian producer Organigram Holdings Inc. OGI,
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OGI,
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said Monday it was temporarily laying off 45% of its staff, or around 400 people, but the situation continues to evolve.

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Guidelines for operating recreational cannabis businesses in the midst of the pandemic differ from state to state, but generally focus on social distancing, limiting contact between consumers and retailers, and improving sanitation. Colorado state guidelines, for example, require cannabis operators to limit the number of people inside licensed sites, ensure people are at least 6 feet apart, encourage pre-orders and curbside pickup, organize payment before pickup, limit the formation of lines and if a line forms, limiting the number of people inside.

Treez chief executive John Yang said his team – which makes enterprise software tailored for cannabis companies – are seeing the substantial changes to the basics of selling a gram of weed to consumers have taken their toll. on dispensaries.

“You can’t be as efficient as you used to be, and retailers are enforcing a delivery or pickup model,” Yang said in a telephone interview.

Requiring customers to pick up orders means businesses must have runners, pickers and people taking orders over the phone, he said, which is not as efficient as normal operations. Cannabis companies in the United States also have limited access to financial services as marijuana is banned by federal law, forcing many of them to only accept cash that could be contaminated with the drug. coronavirus.

During a video conference on Friday, Jerred Kilohm, who operates Los Angeles dispensary The Higher Path, described how his staff use a shopping cart to collect money from clients to eliminate the need to get in touch. with customers. The retailer is also implementing additional hand washing, giving employees rubber gloves and other sanitation measures.

“It’s a very fluid situation”

In Florida, which has legalized medical marijuana, dispensaries are classified as pharmacies, marijuana is not taxed, and is considered essential. With the majority of its operations located in this state, Trulieve Cannabis Corp. TRUL,
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TCNNF,
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Managing Director Kim Rivers said the company’s existing emergency response team, which normally handles hurricanes, has implemented a number of safety measures, such as deep cleaning and sanitation in company facilities that already meet pharmaceutical standards.

“In general, our employees are happy that work is available and we are increasing production to meet demand,” Rivers said in a telephone interview. “It’s a very fluid situation and we have daily conversations about the daily impacts. We all come to realize that this will be the new normal over a period of time. “

While Florida did not mandate delivery of marijuana for all purchases, Trulieve’s customers opted to purchase the product this way, increasing delivery demand by 485%, prompting Trulieve to almost doubling its fleet of delivery cars.

Amid the almost national isolation due to lockdowns linked to the pandemic, the Trulieve patient base appears to be coping with it by speaking more often and longer to company staff by phone. The company has received triple the number of calls it usually receives in a week, and Rivers said patients are more talkative: people talk to Trulieve staff on average 14 minutes, four minutes longer than usually.

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Cannabis distributor Nabis, which operates in California, has made significant changes to its operations, staggering the company’s working hours – making deliveries Monday through Wednesday and having its preparers and packers in warehouses Thursday and Friday – to minimize the number of people gathered at all times. Once. Like consumers, Nabis saw retailers stockpile products initially, with the average order size doubling sharply when news of the pandemic became widespread, CEO Vincent Ning said by phone.

Ning said that due to state regulations and practical matters, it is impossible to avoid certain contacts with other people. It is not possible to drop a $ 4000 pot order on the street side, and each order must have a signed manifest.

Ning said distributors have issues with law enforcement, not knowing or believing cannabis is an essential service in California. After one of his trucks was pulled over by law enforcement and detained for about 20 minutes while on the run, and headaches associated with sorting after the fact – which reduced efficiency – its drivers now carry a letter from the governor that makes it clear that the pot is considered essential.

“It just costs more for our business, adds a lot of headaches and extra costs,” Ning said. “But we see essential status as a privilege, not a right.”

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