The world is in the throes of a national pandemic. The life as we knew it has ground to a screeching halt. There isn’t a single industry that hasn’t been affected, but the marijuana industry has not been dealt the same fate as many, more traditional, business avenues.
For those whose livelihoods revolve around the Schedule I drug, this means that creative marketing tactics reign supreme. Cannabusinesses began rolling out delivery services in states like California, Michigan, and Nevada, where deliveries came from personnel wearing latex gloves and masks and using alcohol-based disinfectants during rides. Priority ordering was given to those with medical marijuana prescriptions, and online ordering spiked as consumers bought less frequently but in bulk. In Michigan, Gov. Gretchen Whitmer signed an executive order declaring that all licensed marijuana retailers provide curbside pick-up and home delivery services while in Massachusetts, medical marijuana centers are expanding their output, allowing their delivery services to send up to a 60-day supply of medical marijuana per prescription.
“We know that many cannabis users rely on our products and services for their ongoing well-being, so having a delivery option that can continue to service them during these unprecedented times is something we’re proud to keep up and running, of course with the safety of our own employees and our community front of mind,” Steve Allan, president of CA-based delivery service Caliva, said.
Ganja Goddess, a cannabis delivery service in California, noted a 10 percent increase in sales from the end of February to the beginning of March. Eaze saw a 34 percent increase in customers signing up for deliveries. In Tempe, AZ, Alt Thirty Six is waiving all transaction fees for delivery purchases. In this way, cannabusinesses are adapting to the restricted way by which consumers are now interacting with their favorite brands.
Businesses that sell edibles are reaping the benefits of increased sales as smoking dropped due to a potential for enhanced Coronavirus-related respiratory infections. Although vapes are being sold less anyway, the link to Chinese-manufactured parts, like batteries and cartridges, renders that niche susceptible to economic issues; the US imports more than 30 million Chinese vape pens and cartridges each month, and that legal trade has been shut down completely.
Headset, a cannabis market research company, has been keeping tabs on the impact of the outbreak on cannabusinesses around the world, and the results are actually surprising. The last week of March 2020, it was reported that cannabis inventory levels had declined in most states, stemming from bulk purchasing. Retailers in California, Washington, and Colorado are staying in the green, but only have an average of 3.6-4.4 weeks in stores, a steep drop from the usual 5.5. In the Bay Area, marijuana sales spiked by more than 150 percent after a stay-at-home order was set in place; in Oregon, adult use sales were up 75 percent. Nevadan marijuana retailers haven’t fared as well. In Las Vegas, where foot traffic is directly correlated to retail sales, marijuana distributors now have 13.8 weeks-worth of product and decreasing consumerism. Nevada dispensaries are only allowed adult-use sales via home delivery.
When California lead the charge in declaring cannabusinesses “essential” due to their medical use, it immediately became easier for owners to survive this economic rollercoaster. Massachusetts ordered only medical marijuana dispensaries to stay open.
On a negative note, Morgan Fox, media relations director for the National Cannabis Industry Association, said that marijuana businesses are facing more financial burdens than traditional industries due to heavy taxation, regulatory guidelines, and no access to federal funding. When President Trump rolled out the $2 trillion stimulus package, state-legal marijuana companies were primarily shut out from grants and loans. The Families First Coronavirus Response Act does apply to cannabusiness operators and their employees though.
For businesses transitioning from foot traffic to a heightened online presence, now is the perfect time to invest in digital marketing strategies. When potential consumers are all sitting at home on their phones, tablets, and computers, hitting them with curated ads to draw their attention is crucial to business survival.
Robert Rothschild, VP, global head of marketing for Smartly.io, a national online marketing agency, said that normally allocated advertising budgets were going to skyrocket as consumerism hit trends akin to Black Friday and Cyber Monday.
“That said, brands must reallocate budgets to ad campaigns accordingly, and reach consumers where they are most active – Facebook, Instagram, Twitter, and Pinterest,” Rothschild said. “According to November research from Smartly.io, 52 percent of retail marketers said they will spend more on social advertising than they did in 2019, and 50 percent were planning to spend at least half of their annual marketing budget on social media advertising this year. We anticipate this number will only increase as people stay indoors and social media advertising becomes a primary focus for retail brands.”
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