Market Shifts: Why the Cannabis Industry Has to Move Fast, Now

The COVID-19 pandemic has presented the cannabis industry with a huge opportunity — if companies can adapt quickly to marketplace shifts and consumer demands.

Photography by Six Labs

Recently I shared my perspective on what the coronavirus could mean for our industry, how the cannabis industry would fare during the pandemic, and how public attitudes might shift in response to the outbreak.

Obviously having state governments recognize cannabis as an essential business is proof that we’ve built an industry that’s recognized as a medical necessity. It’s a seismic shift in attitude and perception from 5–10 years ago. Fortunately, state leaders understand that cannabis is first and foremost medicine, and it plays a critical role in a patient’s health and well-being.

Now it’s important that we absorb this seismic shift along with the responsibility that comes with it, and understand the potential broader implications. As the cannabis industry navigates unprecedented pressures from the coronavirus outbreak, new challenges are going to force us to rethink every aspect of our business operations, from supply chain sourcing, to importation of essential products, and retail sales.

In these uncertain times, there are no accurate forecasts for how the cannabis industry — or any business, for that matter — may operate tomorrow, let alone two weeks or even two months from now. Most plans have been tossed out the window in the wake of COVID-19. Cannabis companies have been forced to be nimble and adjust to rapid changes in the marketplace. The coronavirus crisis is literally going to force savvy cannabis companies to reimagine how they will operate going forward.

Here are a few of the industry shifts heading our way:

1. Out with the old: Decade old cannabis companies were already being forced to adjust in an industry that required large capital infusions to comply with an ever-changing set of cultivation standards. With the current crunch on capital, many of these outdated pioneers in our industry likely will struggle to survive.
2. Regulations and standards: Access to legal, regulated and safe cannabis is essential, especially for consumers who rely on cannabis as their medicine.
3. The retail experience: Cannabis retailers are going to have to do a 180 on how they do business at the retail level. Customers used to come in and speak to a budtender, completing a transaction after a long conversation. Now, they’re going to have to shift the retail experience to online-only. The human interaction customers once relied on to make decisions has been almost completely cut off. That means we’re going to have to rethink how to elevate our customer’s experience, how we improve online ordering, and how to fuse the budtenders’ expertise into the mix.
4. Online ordering: The made-to-order cannabis brand experience will provide a massive opportunity to break away from the competition. Why? Because most cannabis shopping experiences are transmuted through the budtender. Online ordering puts the consumer firmly in control of their experience. It’s more convenient, and there are fewer barriers now that they are no longer tied to a dispensary to make a purchase.
5. Delivery methods: With so many cannabis providers struggling to keep up with orders from customers who are sheltering-at-home, many dispensaries will offer online ordering with bud-to-door delivery options.
6. Reliable suppliers: The coronavirus crisis will force cannabis retailers to make difficult decisions about their supply chains. Dispensaries will focus on the most reliable suppliers with state-of-the-art cultivation facilities, rather than tried-and-true brands with more dated cultivation practices.

Needless to say, the coronavirus pandemic will quickly expose the strengths and weaknesses among cannabis companies. While many will enjoy substantial sales increases, others will find themselves scrambling to address a new and ever changing business landscape. Whether it’s ensuring they can provide delivery-enabled sales, or that they have the space to create social distances within stores, if companies can actually supply their stores with high quality cannabis, they will find themselves on the right side of the crisis, like Six Labs.

Our situation is different because we built for the future from the start. We built our retail strategy with a focus on online sales from the beginning.

Unfortunately, others are simply not prepared to adapt because of supply chain issues and problems with company infrastructure. Companies that are currently having difficulties procuring product are missing a huge opportunity because consumer demand is extremely high.

Making a hard pivot in response to marketplace demands isn’t uncommon for cannabis companies. Yet very few, other than the well-positioned, younger and more nimble cannabis companies, will have the ability to respond to the whiplash speed of rapid changes currently happening in the marketplace. The silver lining, however, is that for now there is an opportunity for the entire industry to evolve in ways that were previously unavailable. The challenge will be how cannabis companies respond, and the speed at which they envision the future.

The coronavirus has taken the world by storm. Notwithstanding the aforementioned rapid changes in the cannabis industry, the newer and more innovative companies like Six Labs will come out of this outbreak unscathed and more vibrant than anticipated. To be sure, the lines outside local dispensaries did look quite healthy last week — despite social distancing.

Joe Ori. Trial Lawyer | Cannabis Advocate | Entrepreneur |Father of four Doing “the right thing,” my way.