Canniseur: Social justice is important. Our current attorney general who does not believe there is systemic racism in the U.S. and freely admits that people of color are treated differently than white people. That’s blatant racism, pure and simple. We need to stop being racists. If you must hate people, hate because they’re nasty and not because their skin happens to be a different color or their eyes look different.
At Canniseur, one of our founding principles is to believe in and look at social justice as a way to help this industry progress toward its fully legal status and take its place in the landscape along with the wine business and other industries that improve our lives.
The cannabis industry is no different. It’s hard to find a place in it if you’re not white. This industry is at its beginning and it’s a perfect opportunity to create a fair and equitable industry. This is an important list.
[Canniseur: Of course illicit cannabis still dominates. Ham-fisted regulators, no matter what country, just don’t understand their competition. The competition is the illegal market. Do these regulators think they can just wave a magic wand over legal pot and watch the black market disappear? Apparently so.]
It’s been nearly two years since Canada became the first G20 country to legalize cannabis for recreational purposes. However, the majority of customers are still getting their pot from the illicit market — with a lot of ground left to cover.
In the fourth quarter of 2018, legal marijuana represented only 21 per cent of total consumption in Canada, despite weed becoming lawful on Oct. 17 of that year. Fast-forward to the first quarter of 2020 and cannabis is now a $2.2 billion retail industry, yet legal consumption is still just 46 per cent of the total, according to data from Statistics Canada.
“Consumer conversion from the illicit market is clearly occurring, but it is still early days,” Cormark Securities analyst Jesse Pytlak said in an email. “Retail infrastructure is still being developed, and useful insight on consumer preferences and behaviors is just now beginning to emerge.”
The relatively slow growth can be attributed to both steep prices in the legal market, as well as the fact that physical stores remain few and far between in large provinces like Ontario. The accessibility of brick-and-mortar storefronts is critical for converting consumers from illegal consumption, Pytlak added.
“The pricing is still way too high relative to what we’re seeing in the illicit market,” Canaccord Genuity analyst Matt Bottomley said in an interview. “If you are someone that consumes cannabis on a regular interval, there’s not a lot of incentive for you to transition over.”
However, legal consumption is expected to grow exponentially, especially as edibles — which only arrived on the legal market in late 2019 — become more popular. “Those are products that make up right now about 15 per cent of industry sales,” Bottomley said. “If you look at any legal market, that number’s at least 50 per cent, so there’s a lot more growth expected in these types of derivative products.”
Although the outbreak of the coronavirus earlier this year may have dampened in-person sales, it didn’t necessarily hurt the overall industry — in fact, according to Bottomley, it could have even contributed to a bump in revenue for retailers.
“When COVID-19 first started in the form of people staying at home, from mid-March to April, that was actually some of the highest cannabis sales globally,” he said. “There’s still a bunch of potential consumers sitting on the sidelines.”
If anything, Pytlak added, the pandemic has shown the sector to be stronger than expected. “The resiliency in demand for cannabis validates cannabis’ status as a recession-proof defensive industry,” he said.
[Canniseur: If you love wine as I do, there really isn’t a whole lot of difference between a wine shop and a dispensary. A wine shop is not a liquor store, although it sells alcoholic beverages. A dispensary should be called a cannabis shop and not a dispensary. A liquor store, that sells mostly spirits is pretty much self-serve, but a good wine shop is not self-service. Wine shoppers need help deciding the same as cannabis shoppers.]
What’s the difference between stepping inside a neighborhood weed store and retail outlets designed to cater to the alcohol consumer?
Back when cannabis advocates were first successfully moving to legalize marijuana for recreational use at the state level, one of the most popular phrases used to describe what that might look like is “in a manner similar to alcohol.” The gist of the pitch was that upon the legalization of marijuana, there would be a taxed and regulated market put into place — same as the alcohol trade — that would allow adults 21 and older to buy cannabis products close to the same way they might purchase beer at a liquor store.
Fast forward a few years and there are now marijuana dispensaries open in several states, with more of them set to come. But what is the difference between stepping inside a neighborhood weed store and retail outlets designed to cater to the alcohol consumer? You might be surprised to learn that the two are very different.
Unlike the average liquor store, marijuana dispensaries like to make sure a person is of legal age before they ever step inside. These establishments typically have security personnel standing at the entrance to check IDs.
You won’t see a weed buyer standing at the cash register of a cannabis dispensary patting their pockets in a panicked quest to produce a driver’s license that may or may not exist. You know the ones who might say, “I don’t know what to tell you, I guess I left my ID at home,” while trying to convince the clerk that they are indeed 21. Without proof that a person is a legal age to buy weed, they simply are not getting any further than the front door.
Alcohol customers can walk into a liquor store and track down their beverage of choice without much social interaction. They do not need to be told where to find the Mad Dog 20/20, and they sure don’t need someone to explain to them how the beverage might make them feel.
But a marijuana dispensary is a different beast.
Rather than just the one clerk waiting up front to ring up customers, a cannabis dispensary has several workers on the floor that are answering customer questions and offering product recommendations. The dispensary experience is more like walking inside any retail setting where the employees work on commission than it is stopping by a liquor store for a bottle of hooch.
Even if a cannabis consumer is an old pro at shopping for legal weed at his or her favorite dispensary, the process is always the same: show ID and wait for customer service to offer some assistance. It’s not like a liquor store where a person can just run in and grab a six-pack of their favorite beer and get out within a matter of minutes. The person buying weed, even if they know what they want, is still going to spend more time inside than those folks who frequent shops where alcohol is sold. There are sometimes long lines in a dispensary, and budtenders have been known to devote 10-20 minutes with new customers to make sure they are getting what they need.
If anything, buying marijuana at a dispensary is more comparable to visiting a wine shop. Chances are, even if a customer is only going in for a bottle of Cabernet Sauvignon, they are going to walk out with a bottle of something else, as well, because of an interesting conversation they might have had with a salesperson about a specific product.
The cannabis dispensary is a lot like that with respect to how there is always something new coming onto the scene that curious patrons might be interested in trying if they were just showed the way. Just think of the cannabis dispensary as more of an interactive experience while the liquor store is more of a place of self service.
[Canniseur: It’s not surprising that cannabis sales are up during the time of COVID. And now, in several states, the economy would be helped by the addition of the revenue from legal cannabis. Oklahoma (in spite of the quality issues) seems to be going full-bore into cannabis sales. Now the state needs to get adult-use legalized.]
Every day, people across the United States demonstrate how legal cannabis could save the nation’s economy from the virus-caused downtown. They do so by buying record amounts of weed.
Almost all legal cannabis states made medical and adult-use dispensaries essential businesses that could stay open as lockdowns began. The lone exception, Massachusetts, has since changed course. This is good news for industry workers in the state since it now has more cannabis industry employees than hairstylists and cosmetologists. Most legal cannabis states release numbers each month that prove how right they were in making the choice to keep dispensaries open.
Oklahoma provides a great example. Only in the last year becoming a hotbed for cannabis advocates, the state clocked its fourth month in a row of record sales in May. Consumers spent $73.8 million on medical marijuana in April. The sharp rise in sales started with the COVID-19 pandemic, according to The Oklahoman.
And sales could have risen even more in future months. In May, state lawmakers from both parties voted for a bill that allowed dispensaries to deliver weed and for people from out of state to buy cannabis with a 90-day temporary card.
Gov. Kevin Stitt, a Republican, vetoed the bill.
Marijuana still has a long way to go for acceptance in some parts of the country.
Some parts of the nation have still not learned the lessons driven home by the War on Drugs. It’s a mindset best exemplified by former U.S. Attorney General Jeff Sessions, who famously said: “Good people don’t smoke marijuana.”
This stigma against weed seems like one major component holding nationwide legalization back. Experts agree more research is needed on the effects of cannabis. But plenty of research has been done on alcohol and cigarettes. Both are linked to thousands of deaths each year, and both are legal from coast to coast. And there’s no such correlation with marijuana.
While the stigma persists, consumer actions during the lockdowns have shown the financial windfall for businesses and governments. Oklahoma dispensaries, for example, sent the state more than $5 million in taxes in April alone.
Seeing this, state lawmakers in New York have asked Gov. Andrew Cuomo to make weed legal in the Empire State. The state, hard hit by the virus, faces a $60 billion budget shortfall. Cannabis can’t cover all of that, but it also would not hurt.
New York State Sen. Jessica Ramos told the New York Post: “It’s not enough to say the state doesn’t have money. We have to find it. I believe legalizing marijuana can help.”
The benefits of legal marijuana are being seen across the nation.
All states must deal with the economic havoc caused by the coronavirus. But those with legal weed have seen some help because of record sales. Some of the record sales include the following.
Oregon residents bought $89 million in adult-use and medical marijuana in April, a 45 percent increase over April 2019. It’s the largest amount of single month weed sales in Oregon history.
In Ohio, medical marijuana sales reached $12.9 million in March and $14.2 million in April. That’s a high mark for sales in the state. It’s also a big jump over February ($10.7 million) and January ($9.6 million)
The amount of medical marijuana sales in Florida, which reports sales weekly, has steadily increased since the COVID-19 outbreak.
It’s not all cannabis and roses. In Nevada, some predict a sales drop as the virus continues to impact tourism. However, now that casinos are open, that could change quickly. Experts also expect a lack of tourism to impact places with legal adult-use marijuana, including Colorado and Alaska.