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Wednesday, March 25, 2020
Legal cannabis industry sees record sales as customers facing coronavirus crisis stock up
An employee holds a jar of marijuana on sale after it became legal in the state to sell recreational marijuana to customers over 21 years old in Ann Arbor, Michigan. Illinois begins the legal sale of marijuana on Jan 1, 2020.
Matthew Hatcher | Reuters
Steven DeAngelo has seen it all. As the so-called “father of the legal cannabis industry,” he co-founded one of the largest vertically integrated licensed cannabis businesses in California, called Harborside, with four stores and $60 million in annual revenues.
But what’s happened in the last month is something new. “We had our largest sales day ever,” he said. “Sales are up 20-25% at all locations.”
Across the country, sales are sky high in states where legal cannabis has been declared “essential medicine” during state shutdowns, allowing stores to stay open.
Customers appear to be stocking up, and many stores are shifting to delivery. It’s also possible the industry is reaching new customers who, until now, have bought their pot illegally, but want to now take advantage of regulated product delivered to their doorstep.
Here are some data points from industry players:
Average store revenue is up 52% to 130% compared with January at more than 1,300 stores using cannabis e-commerce platform Jane Technologies.
Jane also reports the number of new users ordering online has increased 142% over the last month.
Beverages and edibles are seeing significant sales lifts in California, according to cannabis analytics firm Headset.
Wholesale seller LeafLink reported a 48% spike in orders Monday versus a week ago.
“Cannabis demand has surged in Florida,” writes MKM Partners Research, which says operators saw an average jump in THC product of 36% for the week ending March 19.
As demand flourishes, long-suffering publicly traded cannabis companies have seen their shares start to rebound. Canopy Growth is down 70% in the last year, but over the last week shares are up 25%. Tilray has lost 90% of its value in the last year, but over the last week shares rose nearly 40%.
DeAngelo said Harborside is hiring drivers as delivery ramps up. Even though California calls cannabis essential medicine, he said customers do not need a medical card to buy. Anyone over 21 can make a legal purchase.
“Fortuitously — we didn’t know the pandemic was coming — a few months ago we opened our Desert Hot Springs location,” DeAngelo said. “We have one of two drive-through windows in the entire state of California, so it’s a very popular place to buy cannabis in the Coachella Valley right now.”
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