State Watch

Pandemic sparks marijuana sales boom


When Sticky Detroit opened its first medical marijuana shop in March 2020, partner Chris Jackson was certain the timing could not have been worse, thinking the coronavirus pandemic would surely be a damper on sales in the first months crucial to any new business.

“We put a lot of work and time into building it from the ground up,” Jackson told The Hill. “And we were really excited to be in Detroit.”

During the pandemic, however, Michigan deemed marijuana businesses essential, and people with plenty of time on their hands during the lockdown decided to check out the products on offer.

“What the pandemic did for the industry, more than anything else, is it allowed new customers to have experiences that they didn’t have previously,” Jackson said. “The perfect storm of people having more time and wanting to have more experiences and consuming, whether it was for mental issues, health issues, et cetera, the perfect storm allowed for that positive trend to continue across the states and across cities.”

In states where recreational marijuana is legal, sales have boomed during the pandemic while other brick and mortar businesses suffered. Americans spent 71 percent more last year than on marijuana products than they did in 2019, according to a report issued last month by the cannabis information website Leafly.

Several states moved to accelerate their entry into the legal marijuana market during the pandemic, said Eric Altstadter, who oversees cannabis and hemp customers at the accounting and consulting firm EisnerAmper. Virginia last month became the first Southern state to approve recreational marijuana, and New York is moving to pass its own version of a recreational regime.

Recreational marijuana is legal in 15 states and the District of Columbia. Medical marijuana is legal in 34 states.

Just as restaurants have been buoyed by relaxed regulations on take-out alcohol, Altstadter said marijuana businesses have turned to delivery and pickup services during the pandemic.

“Consumers have looked at that as a commodity, and I think they expect to have that going forward, so I think that’s going to be one of the big changes,” he said.

He said the recent boon to sales has given companies the opportunity to achieve profitability if they have struggled in the past and the ability to explore other cannabis products to sell as more consumers turn to the market. Companies could begin to offer more edibles and marijuana-infused beverages, Altstadter said, in addition to the more traditional items.

Industry insiders see little evidence that the sales explosion will ebb once the pandemic subsides and more people are vaccinated.

“We’re at an unprecedented time in terms of both support and momentum for both federal and state cannabis policy reform,” said Morgan Fox, a spokesman for the National Cannabis Industry Association, the marijuana industry trade group.

Fox said consumers have flocked to the regulated market instead of illegal sales as a personal safety measure during the pandemic, which he said could be a broader trend that continues longer term.

“People that were already cannabis consumers wanted to know exactly where their cannabis products were coming from, and they wanted to make sure that they can get it in a safe environment,” he said.

Opposition to legal marijuana for recreational purposes remains bipartisan, even as the vast majority of Americans say they favor legalizing recreational pot.

But a younger generation of Republican politicians are less likely to oppose liberalizing the nation’s drug laws as the war on drugs generation that came of age in the 1980s and 1990s retires. Younger Republicans like Rep. Matt Gaetz (Fla.) have publicized their support for legalization. Democrats in Congress are now far more likely to support legal marijuana than their predecessors just a decade ago.

The development of the industry and increased acceptance of cannabis use fueled by the pandemic could improve social inequity facing people of color, said Nick Kovacevich, chief executive of KushCo Holdings, which sells marijuana-related products. People of color are significantly more likely to be arrested for marijuana use despite using it at a similar rate as white people.

“We can get people out of prison,” Kovacevich said. “We can get people’s lives back on track.”

Jonnette Oakes contributed. Updated on March 15 at 6:24 p.m.

Tags Coronavirus COVID-19 Detroit Marijuana Matt Gaetz Michigan Pandemic pot Recreational marijuana
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