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Dispensary Execs On Cannabis Delivery During Coronavirus: 'A Lasting Shift In Consumer Behavior'

Dispensary Execs On Cannabis Delivery During Coronavirus: 'A Lasting Shift In Consumer Behavior'

As regulations have shifted around cannabis delivery as a result of stay-at-home orders during the coronavirus pandemic, there is optimism that aspects of the new market could outlast the virus. 

CuraLeaf Exec Critiques Massachusetts Shutdown

Chris Melillo, SVP of retail for Curaleaf Holdings Inc. (OTC: CURLF) (CSE: CURA), told Benzinga that the multistate operator has "made great strides" while adapting to the demands of the moment.

Those efforts reportedly included increasing sanitary and social distancing measures, such as shifting the business focus to delivery, mobile pre-orders and emphasizing orders through the company's app, WaitListMe.

The app is available in Maryland, New Jersey and Nevada.

In Nevada's case, delivery-only rules created a hurdle for the team, said Melillo. By pivoting from budtenders to drivers, the company shifted its operations in a matter of days, he said. 

"This came with many challenges, such as finding [and] installing routing software, online ordering capacity, order fulfillment setup, insurances, state regulations, finding rental cars, finding more drivers, the list goes on."

Melillo gave credit to the company's staff for their "get it done" attitude. 

Market-specific issues during the pandemic have included Massachusetts shutting down adult use stores, which Melillo said has impacted access for groups such as veterans, as well as the employees of marijuana businesses.

"We continue to hold hope that these locations can be allowed to open similar to the Massachusetts liquor stores, and provide much-needed tax revenue and employment for [the state]." 

Keystone Canna Remedies Founder Sees 'Encouraging' Cooperation

MSOs aren't the only players making changes to stay afloat. In Pennsylvania, Keystone Canna Remedies had to adapt its Allentown and Bethlehem locations to protect patient and employee safety. Such efforts included providing staff with PPE gear and instituting hazard pay.

For patients, the dispensary brand instituted discounts for patients needing more medicine than usual, while continuing to work with the state Department of Health to temporarily expand the caregiver program. Background checks for caregivers were also eliminated for the time being.

Company founder Victor Guadagnino Jr. commended the state's relaxation of curbside delivery laws for providing additional protection for all involved.

The company had to redesign its patient flow to ensure patient safety, including engaging customers to prepare them for any changes before picking up an order, he told Benzinga.

"It is encouraging to see that in a time of crisis the cannabis community can work together and keep everybody safe," Guadagnino said. "We hope that these new allowances show regulators that overly strict and limiting controls are not as needed as they once were in the cannabis industry," he said of any future regulations.

Guadagnino said he hopes "that some of these new procedures can stay in place even after this all has passed."

Pandemic Shifts Cannabis Retail Preferences 

The changes in regulations have some stores seeing their business flipped in ways it never has before.

Bay Area retail brand SPARC's five stores saw orders substantially shift online. 

Prior to the shelter-in-place rules, 10-15% of SPARC's business was in online orders. That number is now 95%, Michael Bostarr, the brand's director of strategy and implementation, told Benzinga. 

The company isn't seeing the change in preference as a short-term one, either. 

"We believe retailers will need to provide a more immersive and engaging online experience, complemented with quick pickup or delivery services because we see this as a lasting shift in consumer behavior," Bostarr said.

CannaTrac Goes Cashless 

Some companies are banking on cashless payments becoming a lasting trend as well.

The company CannaTrac is about to launch pre-registration for its app, CannaCard.

The app aims to provide customers with scan-and-go mobile payments via funds uploaded to the card from their bank account.

The company joins the likes of MSO Columbia Care Inc (OTC: CCHWF) and its store credit card, CNC, in providing customers with cashless payment options.

CannaTrac CEO Tom Gavin told Benzinga that COVID-19 has impacted the scale of the business.

"CannaTrac has had to automate more processes, add additional people to cover the business and field additional emails/calls and add more equipment due to work-from-home situations.

Gavin declined to speculate about how long the crisis might last. 

"Instead of being presumptuous, CannaTrac decided to continue to stick to its now-expedited plan and to adapt that plan as the landscape slowly changes," he said. 

Related Links:

Federal Agency To Fund Scientific Research On Cannabis' Effects On COVID-19

Weed Won't Kill Coronavirus Or Cure COVID-19, Evidence Suggests So Far (Same Goes For CBD)


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