Workers at most of the Illinois marijuana dispensaries worked relentlessly during the first weeks of recreational cannabis sales. They were doing all that to meet the ever-growing demand for the newly legal product. However, everything changed around three weeks ago.
As the coronavirus pandemic wreaks havoc around the world, Illinois residents were also ordered to stay at home. On their part, the marijuana dispensaries that were deemed essential by the state and allowed to remain open must come up with ingenious ways to enforce social distancing int heir stores.
It became a significant concern and necessity for the dispensaries to protect medical marijuana patients whose immune systems are already compromised. Plans to open new shops were put on hold as the city approvals for new sites came to a screeching stop. The general manager for Dispensary33, Paul Lee, said:
“We had to change the entire way we operate overnight. It’s like reinventing the wheel all the time here. We just got our feet under us.”
Dispensary33 has shut down all recreational weed sales and urged medical patients to preorder. Just like most of the other businesses, the cannabis sector is struggling to pivot and adapt as the spread of the coronavirus reshapes the entire global landscape.
Unlike some of the other economic sectors, the cannabis dispensaries are regulated by the state. Thus, they cannot make any significant operational changes without getting state approval. Even letting medical patients pick up their products and orders curbside to facilitate social distancing needed Illinois Department of Financial and Professional Regulation’s approval. All dispensaries were also directed by the agency to keep all their customers six feet apart.
Twists and turns
The rapid spread of the coronavirus has resulted in a swift turn for a sector that, in the first two months of 2020, had a promising growth of the recreational sales of marijuana. In those months, the industry was focused on serving long lines of clients as rapidly as possible.
The general manager of The Herbal Care Center, Michael Mandera, said that the intersection on the Near West Side is nowadays busy for curbside pickup. But, without any recreational customers, the waiting and showroom floors are adequately big to ensure that customers are kept at a safe distance from one another. He said:
“We’ve essentially cut our showroom in half to abide by these 6-foot rules.”
The dispensary is taking people’s temperatures as they come in and encouraging online preordering to minimize the number of customers coming into the shop at once. Other dispensaries have also done the same, with some of them instituting reservations and taking orders through the phones.
Notably, most of the dispensaries are operating with skeleton crews since the unwell staff members and those worried about exposure to COVID-19 work remotely. Also, most of the dispensaries scheduled to open in Chicago and other parts of the state are encountering delays.
The 55 stores that were operating when recreational marijuana was legalized on January 1 were permitted to open a second location. Most of them in Chicago rushed to open these shops. However, as the city’s activities slow down due to the pandemic, so too has the race to open these locations.
Plans
PharmaCann already operates four dispensaries in Illinois, and it has plans to open two more in Chicago. The new locations will be found one each in the Near North and Logan Square neighborhoods. However, one possible site requires the City Council to approve a zoning change. Moreover, both of the identified locations require approval from the city’s Zoning Board of Appeals to move forward.
Both governmental bodies have agreeably rescheduled meetings due to coronavirus, and that has delayed PharmaCann’s progress in these two shops. The director of public and regulatory affairs for PharmaCann, Jeremy Unruh, said:
“There’s nothing we can do. It sets us back probably the same amount that the city has been delayed.”
Cresco Labs is encountering similar issues with the dispensaries that it wants to open in the Gold Coast area and in Schaumburg, which is a northwestern suburb that also has delayed meetings due to the virus. Cresco operates five locations in Illinois and plans to open five more in the future. All construction activities at the scheduled sites in South Beloit and Danville have also been delayed due to supply chain issues arising from the pandemic.
April 20
The operational limitations and delays are coming at an inappropriate time for the cannabis sector. April 20, or 4/20, is just three weeks away. That day is considered as a marijuana holiday of some kind, with operators likening it to the industry’s Black Friday. The principal officer at Thrive dispensaries, Gorgi Naumovski, while referring to a third location the company wants to open in Mount Vernon:
“We were going to try to be open for 4/20. We’re not going to be open … I don’t see having a big fanfare this year.”
Thrive’s existing dispensaries located in Anna and Harrisburg have experienced a 30% to 50% drop in customers in the last two weeks as state residents heed to the stay-at-home order. The customers who venture to the dispensary at times lose patience with the slow pace of services according to Naumovski. He added:
“You only have two to three people at a time coming in, so it does make for a slower transaction. Some people can’t wait and abandon their orders. It’s just part of the game right now.”
Revenue
At the start of March, the marijuana sales around Illinois exploded as consumers stocked up on products heading into the state shutdown. The average sale through March 25 increased by 13%, as shown in the New Frontier Data that tracks sales at over 40 Illinois dispensaries. However, that rush has plunged for some dispensaries like Thrive as others continued enjoying high purchase volumes.
On March 27, Mission South Shore dispensary had its highest revenue day since January 1. This South Chicago dispensary currently uses an appointment system to limit the number of individuals in the store, according to the president and co-founder of 4Front Ventures, Kris Krane.
However, the dispensary removed the buying limits that it had set in place since January 1. It is serving fewer people every day, but these customers are buying more. Krane explained:
“From a health standpoint, it’s better if people can buy more and don’t have to come in as frequently. It’s not panic stocking up, and it’s just responsible stocking up.”
With no end to the effects of this pandemic insight, for now, marijuana businesses will have to adapt to doing business differently.
