Covid 19 Archives - Green Market Report

Sean HockingSean HockingMarch 31, 2020
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8min4280

Authored By: Patrick McKnight.

 

Businesses are on the front lines of the COVID-19 outbreak. Employers must attempt to balance public health concerns, compliance with emergency government orders, employee safety, consumer demand, and financial reality. Many states are enacting restrictions on business activity or even forcing “non-essential” companies to close or transition to a work-from-home policy.

When the crisis began it was not at all clear how the medical marijuana industry would fare. Recent developments suggest the industry has not only escaped closure, but many states have relaxed existing restrictions to encourage greater patient access while containing the spread of the virus.

The United States medical marijuana market is estimated to reach nearly $8 billion in sales in 2020 with annual growth of around 17%. 33 states currently have some type of medical marijuana program with an estimated 3 million total patients across the country. The industry employs 240,000 people.

The onset of the COVID-19 outbreak presents a new arena of legal uncertainty for a rapidly expanding industry known to inhabit a constant state of flux. The Pennsylvania medical marijuana industry reached $500 million in total sales over just its first two years of existence. The Keystone State currently has about 150,000 medical marijuana patients. The New Jersey medical marijuana industry has likewise demonstrated remarkable growth following recent expansions of eligibility.

Mid-Atlantic States Respond to COVID-19

The COVID-19 outbreak is hitting the Mid-Atlantic states harder than many other areas. New Jersey and Pennsylvania have been among the most aggressive in enacting emergency measures to slow the spread of the virus. Many of these executive orders restrict the ability of “non-essential” businesses to operate for the duration of the ongoing emergency.

The ambiguity over which businesses are “essential” or “life-sustaining” has generated confusion amongst business leaders and warranted multiple clarifications from officials. Most states have policies in place allowing businesses to apply for waivers. New York, Connecticut, and New Jersey also enacted statewide shelter in place orders. Pennsylvania currently has a shelter in place order across 22 counties.

On March 19, 2020, Pennsylvania Governor Tom Wolf announced all “non-life-sustaining businesses” would be ordered to close physical locations. New York announced similar restrictions on March 20, 2020. On March 21, 2020, New Jersey Governor Phil Murphy signed Executive Order 107 forcing all “non-essential” retail businesses to close.

Is Medical Marijuana an Essential Business?

Nearly every state with a medical marijuana program has determined the industry should continue operating as an essential business. Under this designation, medical marijuana dispensaries are basically treated like pharmacies providing essential healthcare products.

Not only have states refrained from shutting down businesses engaged in the production and sale of medical marijuana, but many states have also relaxed existing restrictions.

Government promotion of social distancing may be making it easier for medical marijuana dispensaries to operate in Pennsylvania. On March 20, 2020, the Pennsylvania Department of Health announced the temporary suspension of several important restrictions. For the first time, patients and caregivers may pick up medical marijuana at the curb outside of dispensaries. Other loosened regulations in Pennsylvania include:

  • Waiver of limits on how much medical marijuana may be purchased.
  • Elimination of background checks for caregivers.
  • Relaxed restrictions on the number of patients per caregiver.
  • Allowing remote consultations for the renewal of medical marijuana cards.

“In the midst of COVID-19, we need to ensure medical marijuana patients have access to medication,” Secretary of Health Dr. Rachel Levine said in a press release. “Medical marijuana grower/processors and dispensaries are considered life-sustaining businesses under the Governor’s order for nonlife-sustaining businesses to close. We want to be sure cardholders in the medical marijuana program can receive medication for one of 23 serious medical conditions during this difficult time.”

New Jersey also relaxed restrictions on medical marijuana establishments, known as Alternative Treatment Centers (“ATCs”). New Jersey is allowing curbside pickup and reducing fees for caregivers from $100 to $20. On March 24, 2020, the New Jersey Department of Health’s Division of Medical Marijuana released guidance on how ATCs may hire employees during the emergency period. The guidance relaxes restrictions on background checks for “provisional” employees. New Jersey has about 73,000 medical marijuana patients and generated an estimated $100 million in sales in 2019.

The New York Department of Health considers all medical marijuana companies to be “essential businesses” and implemented similar steps to ensure access during the outbreak. Regulations on home-delivery are temporarily relaxed and sales are now permitted at the door of dispensaries.

Like several other states, Connecticut defines “essential businesses” in terms of guidance from the Department of Homeland Security Cybersecurity and Infrastructure Security Agency. The Agency has a list of 16 critical infrastructure sectors. Notwithstanding federal law, Connecticut created an exception from this guidance by placing medical marijuana within the healthcare sector.

Some states are placing additional restrictions on medical marijuana dispensaries as part of their response to COVID-19. Maryland announced rules requiring dispensaries to limit over the counter interactions. The federal Small Business Administration is prohibited from offering disaster relief loans to any cannabis business.

Conclusion

The initial demand for medical marijuana during the COVID-19 outbreak was reported as very strong. Industry analysts estimate demand increased 20% nationwide in mid-March, 2020. Dispensaries in Pennsylvania and New Jersey reported long lines as patients added medical marijuana to their emergency shopping lists. Available data suggests this preliminary spike in demand was followed by a steep, sudden decline.

The long-term legal ramifications of the COVID-19 outbreak are difficult to predict. As the unprecedented public health emergency continues to spread across North America, the medical marijuana industry should continue to monitor the developing legal implications.

 

Patrick McKnight is an Associate in the Klehr Harrison Harvey Branzburg LLP Litigation

Practice Group and member of their COVID-19 Task Force. He can be reached at pmcknight@klehr.com.


StaffStaffMarch 25, 2020
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7min5050

Cannabis dispensaries have been super busy as sales skyrocketed ahead of lengthy lockdowns. With anxiety levels rising, many consumers turned to cannabis to ease their tensions and help make the time stuck inside go by a little easier. For some companies, they have taken extra steps in order to assist in the fight against the virus.

Canopy Growth/Hexo

BNN Bloomberg reported that Canopy Growth (NYSE: CGC) spokesperson Jordan Sinclair said that the company donated “thousands” of gloves, Tyvek suits, and masks sourced from two massive greenhouses in British Columbia that it shut down earlier this month. “We committed our personal protective equipment from our recently shuttered B.C. sites to the front-line medical staff at a local health unit in Victoria,” Sinclair said in an email to BNN Bloomberg. Hexo said it donated 150 N95 facemasks to paramedic services in the Outaouais region in Quebec to “help fill their critical need”, according to a company spokesperson.

CannaCraft

The edible cannabis company CannaCraft said it has converted a portion of their manufacturing space and production capacity to formulate and package individual bottles of hand sanitizer that will be donated to individuals and organizations throughout California.

The company trialed the program last week, creating hundreds of tubes that were distributed to employees and customers. After the successful test run and registering with the FDA, the company procured enough materials to make 40 gallons (or 5,000 1oz. tubes) of hand sanitizer. The hand sanitizer will be donated to non-profits, customers, employees, and essential businesses and will be distributed later this week by Kind House Distribution, the company’s wholly-owned distribution arm.

“We are doing everything we can to protect our employees and our communities by adhering to guidelines and directives from officials and experts. At the same time, we are uniquely positioned to help in other ways because we have manufacturing equipment, scientific expertise, and a statewide distribution network built into our business,” said Jim Hourigan, CannaCraft CEO. “When we started hearing reports of a shortage in hand sanitizer, we knew that we could be of assistance without negatively impacting our employees or our operations.”

The hand sanitizer was formulated by CannaCraft’s head of R&D, Matthew Elmes, Ph.D., and is being packaged and distributed by a limited production team, due to the company’s decision to restrict facility access to essential production and distribution staff only. The teams have been split into smaller groups and are spread throughout CannaCraft’s 70,000 ft2 headquarters to reduce unnecessary interactions. Additionally, CannaCraft has implemented robust health and safety protocols throughout every step of the supply chain process.

Glass House

Glass House Group is donating 1,000 protective gowns to Cottage Hospital, a Santa Barbara hospital, so their healthcare workers can use the disposable protective equipment during the COVID-19 health crisis. The company is also working with its suppliers to find extra masks for frontline healthcare workers, donating 5% of their local product sales from its Santa Barbara dispensary to the food bank to help kids get free nutritious meals while schools are closed and offering all of their workers two weeks of paid leave.

Marrone Bio Innovations

Plant health company Marrone Bio Innovations, Inc.  (NASDAQ: MBII) announced that its Jet-Oxide® 15% post-harvest sanitizer and industrial disinfectant product is now allowed by the U.S. EPA for use against human coronaviruses to sanitize industrial food and agricultural hard surfaces.  The allowed use was based on a study conducted by the EPA with Human Coronavirus Strain 229E (one of the viruses associated with human colds)  on the effectiveness of spreading of diseases on hard surfaces.

The study, conducted at a sanctioned EPA laboratory, met all requirements for 40CFR 160 – yielding a 99.99% reduction of Human Coronavirus Strain 229E. The study was conducted using a dosage of approximately 1300 ppm (0.130%) of the active ingredient with a contact time of 60 seconds at an ambient temperature of 22 degrees Celsius.

Crazy Calm

CBD coffee brand Crazy Calm said that for every online order from now until the end of March, all profits will be donated to Direct Relief. The company said it chose Direct Relief (DirectRelief.org) because it has a long-standing track record, have already helped tremendously and will continue to do so:

“In the U.S., Direct Relief is delivering protective masks – along with exam gloves and isolation gowns – to health care organizations in areas with confirmed COVID-19 cases.”

“In China, Direct Relief has delivered via FedEx more than 30,000 pounds of protective gear — nearly 800,000 N95 and surgical masks, more than 400,000 gloves, and numerous coveralls, face shields, and shoe covers — to frontline health workers.”


Debra BorchardtDebra BorchardtMarch 20, 2020
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4min6280

It seems most businesses are reporting dismal outlooks during the pandemic. Event organizers, airlines, bars, restaurants, theatres – you name it everyone is suffering. Everyone except cannabis.

Business intelligence from Akerna (Nasdaq: KERN) said that cannabis sales are thriving during the COVID-19 pandemic. The company provided the following statistics:

The numbers March 11 – March 18:

  • Medical cannabis sales: Up 20.8%
  • Recreational cannabis sales: Up 11.6%
  • Flower sales: Up 22.6%
  • Vape sales: Up 9.7%
  • Edible sales: Up 12.4%

“Cannabis operators are running an essential business,” said Ostap Rapeyko, business intelligence analyst, Akerna. “On March 11, when major news of the potential impact of COVID-19 indicated changes in lifestyle, buying patterns were at normal rates. However, a week later, on March 18, sales increased by 19.2% overall.”

Columbia Care Sets Weekly Record

Columbia Care Inc. (OTCQX: CCHWF) reported preliminary revenue for the week ending March 14th, as well as preliminary year-to-date revenue for January 1 – March 14, 2020.

Preliminary Results (vs. same prior-year period)

  • Revenue for the week ended March 14, 2020 increased 156% to a weekly record $2.8 million
  • Year-to-date revenue through March 14, 2020 increased 131% to $23.6 million
  • Results include only a partial benefit of the Company’s six dispensaries opened during the first quarter of FY 2020

The results were repeated across the board with the following State Level Operational Highlights (week ended March 14, 2020):

  • MA: record weekly revenue
  • OH: record weekly revenue, including single day revenue record in Dayton
  • CA: record weekly revenue, including single day revenue record in De Soto
  • DE: record weekly revenue, including single day revenue records in Rehoboth and Wilmington
  • PA: single day revenue records in Allentown and Wilkes-Barre
  • IL: record weekly revenue, including single day revenue record in Chicago
  • FL: record weekly revenue
  • MD: record weekly revenue
  • PR: record weekly revenue

In a sign of support for the company, members of the Columbia Care management team and board of directors will be able to purchase shares in the open market, beginning March 19, 2020.

HardCar Keeps Delivering

Cannabis delivery and security business HARDCAR will continue to distribute cannabis while other distributors scramble with the shut down of California.  That’s because ‘Essential Services Sector’ companies may continue to operate while others MUST shut down. HARDCAR has been ESS certified for nearly 4 years. Emergency Services Sector companies may continue operations legally in the state of California when other companies must shut down operations.

“We saw this one 3  years ago when the first quakes were hitting in California so we made sure all vehicles were ready for events like this. We installed air purifiers as trials and had fantastic results. Then we added satellite phones and generators to some rigs so we are very prepared.” Todd Kleperis of HardCar.
Sal Moccia CEO of HardCar said, “Right now it’s not about profit – it’s about sustainability and moving through very treacherous roads. Who better than the US military veterans we have to make our way in a time of crisis. I’m proud of our team for never wavering and never faltering to make this industry secure.”

Gretchen GaileyGretchen GaileyMarch 16, 2020
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4min3900

With news coverage of the Coronavirus pandemic prepping Americans for the impending health crisis, many are taking extreme precautions with whom they interact, where they are going, and the businesses that they frequent. According to The Washington Post, “consumer spending – which supports 70 percent of the economy – is grinding to a halt,” and cannabis businesses are not immune.

The only way to shore up your business and maintain your customer base is through public relations and communication, internally and externally. A lack of information breeds fears and anxiety.  You have the power to alleviate those concerns and navigate this health crisis.

Communicate with your Customers: No one in this country has dealt with this kind of crisis in recent years, so there are questions all around on how to deal with it. Tell your customers about the extra precautions that you are taking in your dispensary to maintain a hygienic environment. CEO Wanda James of Simply Pure did a great job of this recently in an online video posted to Instagram, where she informed her customers of the precautions that they have always taken and are currently taking to ensure customer safety.

Make company announcements across multiple platforms: This will show your customers, employees, and stakeholders that you have a firm grasp of the situation and that you are covering all of your bases. By having one standard message across all platforms it also leaves no room for miscommunication.

Communicate with your suppliers: Around the country, quarantines may go into place, impacting your supply chain. Or perhaps you are a vape pen manufacturer waiting on parts to come in from China. You need to be aware of what strains and products may not be coming into your store so you can inform your patients and your budtenders. With this knowledge in hand, you can determine alternative product recommendations for your patients and have your workers prepared to offer that advice.

Have in Place Emergency Preparedness Plan: Make sure all employees are aware of contingency plans when they may call in sick, have childcare issues when their children are kept home from school, or you run out of product. You don’t want your business to be impacted because your employees don’t know how to react to internal conflicts.

Educate the media: In this 24-hour news cycle, reporters are going to need to fill every angle possible in their broadcasts to inform the public about what is going on in their communities and they will eventually look at what is going on in the cannabis industry. You want your organization to be known for the care, calm, and professionalism that the cannabis industry is bringing to this health crisis. If reporters have medical questions about what impact cannabis might have on the virus, bring in a doctor that you trust to speak on your behalf. Since COVID-19 is a respiratory illness, speak to reporters about products you may be advising patients to take that are not consumed through the lungs. Don’t wing it and don’t make unfounded claims about your product being able to cure it.

Above all, take care of yourselves and your loved ones. Our industry is still in its infancy, now is not the time for martyrs. We need everyone healthy and an “abundance of caution” is not cowardice, it’s the best science available.

 


Debra BorchardtDebra BorchardtMarch 16, 2020
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4min5340

Facing calls to stay inside and avoid large groups, cannabis consumers decided the way to best pass the time was to stock up on supplies. Dispensaries have been reporting large lines as shoppers increase purchases. Boston dispensaries were seen with lines snaking out the doors, while other states reported fewer shoppers, but larger purchases.

The Covid 19 virus has resulted in the cancellation of numerous cannabis conferences and even delayed some grand opening plans for new dispensaries. So far it seems April 20 celebrations haven’t been canceled yet and some of the bigger conferences planned for late May are still on schedule.

iAnthus (OTCQX:ITHUF) kept its soft opening of its first Northeast Be. retail store on Staten Island in New York last week. This is the company’s third store in New York. Beth Stavola, iAnthus Chief Strategy Officer noted that the soft opening was successful.

Ayr Expands Sick Leave

Multi-state operator, Ayr Strategies Inc. (CSE: AYR.A)(OTCQX: AYRSF) said it has joined with the United Food and Commercial Workers International Union in announcing measures to safeguard the health of its employees and customers. Under the measures, Ayr employees will benefit from an expanded sick leave policy that allows for additional paid time off and sick leave for those dealing with the impacts of the COVID-19 virus.

“Our highest priority is the well-being and safety of our employees, our customers and the community,” said Jon Sandelman, CEO of Ayr Strategies. “We’re expanding our sick leave policy to ensure that employees’ concern about COVID-19 does not keep them from protecting their health or the safety of those around them.”

“We’re committed to working with employers like Ayr Strategies to ensure the health and welfare of our members and their communities. We are pleased to see Ayr take a proactive step forward in protecting its employees,” said Fernando Lemus, Secretary-Treasurer and Acting President at UFCW.

CBD Does Not Prevent Covid 19

The FDA is cracking down on businesses claiming to prevent the spread of Covid 19. The agency sent out numerous warning letters to vitamin companies and essential oil sellers saying, “The FDA is taking urgent measures to protect consumers from certain products that, without approval or authorization by FDA, claim to mitigate, prevent, treat, diagnose, or cure COVID-19 in people. As described below, you sell products that are intended to mitigate, prevent, treat, diagnose or cure COVID-19 in people. We request that you take immediate action to cease the sale of such unapproved and unauthorized products for the mitigation, prevention, treatment, diagnosis, or cure of COVID-19.”

So far no letters have gone to CBD companies, but there have been reports that some CBD companies are trying to make the connection as these supplement companies have.

 

 



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