Marijuana Supply Chain Stressed As Demand Grows During Self-Quarantine

As the demand for cannabis products continues to surge as more individuals are staying home to minimize the spread of the novel coronavirus, marijuana supply chains are feeling the pressure to keep up. According to Matt Karnes of the cannabis data firm GreenWave Advisors, consumers are making bulk marijuana purchases for the same reason they’re stockpiling on other supplies, which is both the fear of supplies running out and of the unknown expected duration of calls for self-quarantine and social distance. 

"The supply chain continues to show signs of vulnerability and for the cannabis consumer mindful of potential inventory shortages, this could trigger the decision to purchase more product upfront,” he said.

Roy Bingham, CEO of BDS Analytics, a cannabis data collection company, says that the marijuana supply chain could face obstacles if either customers continue to stockpile or if demand sharply declines after they’ve got what they want and return home for long periods of time.

"I think the big concern for everyone in the cannabis industry is that this a short term blip and then we will see a deterioration of the market. While there’s a pick up in sales, it’ll be interesting to see if the demand slacks off," Bingham said. "If the country is told you can only go to the grocery store, you’re going to see less traffic (at dispensaries)."

Heavily increased demand for cannabis has led to long lines at dispensaries while staff try to enforce social distancing. For medical marijuana patients that rely on trips to dispensaries to obtain their medications, this is particularly crucial as many are immunosuppressed. Dispensaries are also taking extra measures to prevent the spread of COVID-19.

"Staff is required to wear gloves at all times and they are sanitizing tables, registers, doors and any items being handled in-between each customer. They have also been limiting the amount of people at one time into the facility during the in-take process. This can affect the time frame of purchasing which is why customers should consider pre-order pickup options and delivery," said Courtney Meredith, a spokesperson for Mynt, a medical and recreational cannabis dispensary in Reno, Nevada.

"Apparently people need weed and toilet paper, that I am sure of," said a laughing Wanda James, owner of Simply Pure dispensary in Denver, Colorado. "They are absolutely stocking up."

When it comes to the closures of businesses across the nation, the question of whether or not that extends to legal cannabis business locations has frequently risen. This week, California Governor Gavin Newsom issued a Stay At Home order for all 40+ million California residents that includes the shutdown of all nonessential businesses. Newsom’s order clarified that marijuana dispensaries with valid medical licenses are considered essential and are clear to remain operating. Many cities and states across the nation have implemented similar protocols.

"We believe that we are an essential service," James added. "Many folks rely on us for depression or anxiety or pain. We feel good about staying open."

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However, some dispensary companies have decided to err on the side of caution and have enacted temporary closings even in the midst of an increase in demand, such as Organic Alternatives in Northern Colorado.

"We were very busy — we saw online orders double and triple what they normally are. But with all of the information that kept coming out, there was just no real way to ensure the distance and safety for our staff and customers," said Maka Kalai, director of sales and marketing for Organic Alternatives. "It was a hard decision to make. That's a lot of revenue to turn away, but we really felt it was the right decision to protect our staff and our community."