🌿 Cannabis Industry Adjusts to a New Reality 🌿canabodial
Welcome back to our weekly newsletter, which outlines recent cannabis news you need to know about related to entrepreneurship, finance, legal, medicine, science, and technology.
Over 200 attendees tuned in last week to our first (of many) digital CannaGather events. The discussion centered around the impact of the COVID-19 pandemic on the cannabis industry and what it means for business today, tomorrow, and beyond. If you’d like to speak at, sponsor, or otherwise collaborate on a future CannaGather Digital, email Josh Weinstein or Rico Lamitte.
And now, what’s going on this week: COVID-19 shakes up the industry. Retailers cope with a boom in online orders and curbside deliveries. NY legalization sees probable delays. High-profile cannabis company founders and executives step down. The DEA proposes a rule change for the expansion of marijuana research.
Would you like to become a sponsor of our weekly Leaflet? Email me for more information.
Be sure to join us at a CannaGather in your city, where we continue to network and explore the latest progress in our communities as the reach of cannabis increases.
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// CannaGather Calendar
COVID-19 is a dangerous, deadly pandemic that enjoys exponential growth through the interaction of nodes in a social network.
As such, we have cancelled all in-person CannaGathers through 4/21 and are exploring digital alternatives.
The CDC’s guideline is that this will continue through mid-May and we hope to recommence in-person CannaGathers thereafter.
Retailers Cope with Online Order & Curbside Delivery Boom
Stores across the country are being forced to adapt to the increase of online orders and curbside deliveries as the COVID-19 outbreak continues. Some measures they have implemented include include:
- Putting in place a dedicated team that fulfills online orders.
- In states where curbside pickup or delivery is prohibited, limiting the number of customers that can enter the store at one time to gather their products.
- Strongly encouraging customers to pick up orders promptly.
Cannabis shops also grapple with the potential of the outbreak to change the way businesses will run in the long-term. Canopy Growth closed all of its corporate-owned shops and shifted to an e-commerce and delivery business model. The retail staff is still getting paid while they devise a plan to re-open stores safely.
Jordan Sinclair, vice president of communications and media at Canopy, believes that COVID-19 will change the way consumers shop in many industries. “The advice I would offer any business is to go where the puck is going,” he says. “We’re looking at a reality where e-commerce is going to be the majority of commerce. We’re trying to be a step ahead and shift our focus and resources there.”
What this means and why you care: The U.S. will have to adapt to the current pandemic in many ways. For cannabis shops, this could mean rethinking the role of their employees as businesses predict a fall in store traffic and rise in online orders and curbside deliveries.
Cannabis Company Founders & Executives Step Down
In the past several weeks, there has been a shift in the U.S. cannabis industry, as high-profile company founders and executives step down from their roles. In the face of scarce funding, the pressure is on for companies to work toward profitability. Investors stress that businesses need to stop relying on raising capital and their previously impressive sock prices. Those at the helm have had to make way for “seasoned executives” with relevant experience. According to Marijuana Business Daily, “investors and entrepreneurs alike are discovering a big difference between starting a company and then managing it as it becomes more complex in terms of finances and structure.”
Among those who have left their positions are Joe Caltabiano, co-founder and president of Cresco Labs, Adam Bierman of Los Angeles-based MedMen Enterprises, Jose Hidalgo of Cansortium, and Andy Williams, co-founder of Medicine Man Technologies. Some might be shocked to see well-financed companies like Cresco Labs lose their top talent, but Joe Caltabiano cites the stock market and a “difficult capital environment” as reasons for his departure. Says Caltabiano, “stock prices can certainly dictate the future of founders and executives in a very material way.”
While some cannabis companies with deeper pools of resources can potentially survive on debt transactions, startups and entrepreneurial ventures are going to have to make some changes in order to thrive – or even just survive. The current volatility of the stock market (made much worse by the ongoing COVID-19 crisis) suggests that this changeover trend is unlikely to let up anytime soon.
What this means and why you care: Marijuana companies in the U.S. are seeing an increase in the number of company executives and founders stepping down from their roles, while companies large and small across the cannabis industry struggle to remain profitable.
COVID-19 Could Delay NY Legalization
The pandemic has shifted the New York’s legislative priorities. Sen. Liz Krueger said last week that the state’s response to the coronavirus crisis makes advancing cannabis legalization through the budget before the deadline unlikely.
“Assembly [Majority Leader] Peoples-Stokes and I have put forward what I believe to be the best proposal to achieve marijuana legalization, and I would be happy to see the Governor include it in his budget,” says Sen. Krueger. “However, while it is important that we end marijuana prohibition as soon as possible, it is also important that it be done the right way. If that cannot be achieved in the midst of a public health crisis, then we will all be better off waiting. There is no reason we cannot negotiate and pass a nation-leading legalization model when the crisis is over.”
Legalization efforts nation-wide have suffered since the beginning of the COVID-19 crisis. Activists are coming up with new plans as traditional campaign activities are suspended.
What this means and why you care: The state legislature and Gov. Cuomo are working together to ensure New York’s response to the outbreak is the best it can be. Unfortunately, this will likely create a setback for cannabis reform.
// Medicine, Science, & Technology
DEA Proposes Expansion of Marijuana Research
A proposed rule change by the Drug Enforcement Agency announced on Friday would approve more cannabis growers and expand the types of marijuana eligible for use in studies. It’s been a long wait: the DEA said it would accept new marijuana manufacturer applications three years ago.
It’s important to note that the new proposal states that the DEA would have full ownership over any marijuana cultivated for research purposes. This signals a key change in policy. Currently, the single Mississippi facility grows cannabis through a contract with the National Institute on Drug Abuses (the DEA has no ownership over the products).
“The Drug Enforcement Administration continues to support additional research into marijuana and its components, and we believe registering more growers will advance the scientific and medical research already being conducted,” said Acting Administrator Uttam Dhillon. “DEA is making progress to register additional marijuana growers for federally authorized research, and will continue to work with other relevant federal agencies to expedite the necessary next steps.”
What This Means and Why You Care: If the proposed rule is put into effect, there could be an expansion of marijuana growers. The DEA would “purchase and take title to the crops of marihuana, and DEA will, with respect to marihuana, have the exclusive right of importing, exporting, wholesale trading, and maintaining stocks.” You can read more about the potential impacts here.
CannaGather Digital: Cannabis & COVID-19
Over 200 attendees tuned in last week to our first (of many) digital CannaGather events. The discussion centered around the impact of the global pandemic on the cannabis industry and what COVID- 19 means for business today, tomorrow, and beyond.
We connected coasts live with Jamie Pearson (CEO, Bhang Corp), Seun Adedeji (CEO, Elev8 Cannabis), and Nick Kovacevich ( CEO, KushCo) for a special Social-Distancing certified CannaGather Digital Experience with CannaGather’s own Josh Weinstein & Rico Lamitte!
If you’d like to speak at, sponsor, or otherwise collaborate on a future CannaGather Digital, email Josh Weinstein or Rico Lamitte.
Would you like to become a sponsor of our weekly Leaflet? Email me for more information.
Do you want to join the CannaGather team? We would love to have you on board as we grow! You can email CannaGather founder Josh Weinstein at firstname.lastname@example.org for more info.
Written by Justin Bernstein
Contribution by Michela Proto