Survey Results: COVID-19 Poses Challenges for Cannabis Industry

Survey Results: COVID-19 Poses Challenges for Cannabis Industry

Nearly 40% of cannabis businesses reported having to shut down a segment of their business since the outbreak started, according to a recent survey by Cannabis Business Times.

April 7, 2020

The COVID-19 pandemic has had a significant impact on the day-to-day operations of cannabis cultivators, dispensaries and industry suppliers, according to recent survey conducted by Cannabis Business Times at the end of March.

More than half of participants (54%) responded “a great deal” or “a lot” when asked “How much of an impact has the COVID-19 outbreak had on your operation?” Only 5% of participants said the outbreak did not have any effect on their businesses.

Participants included cultivators and vertically integrated cannabis companies (48%), medical and adult-use dispensary representatives (30%), processors (15%) and suppliers (10%).

Nearly three-fourths of cannabis companies surveyed reside in areas that are under a stay-at-home mandate. However, 76% indicated their companies are still providing normal services, and 64% live in areas where cannabis businesses are considered essential, which has boded well for many in the industry.

“So far in Oregon, there has been very little day-to-day change for our business as cannabis was deemed an essential business operation,” one participant wrote in a comment section. “However, we are paying close attention and taking this day by day. Folks are buying cannabis products now, but if many continue to be out of work, who knows what that will do to the market.”

When it comes to staffing changes, results are a mixed bag, as 52% reported no change, 29% have had to reduce employee hours and 13% have had to lay off employees. Another 5% have actually increased staff hours during the pandemic. 

For companies that have had to cut staff or hours, the affected departments included cultivation (18%), post-harvest trimming (12%), and processing (19%).

Some participants shared details about other ways they are adapting during the outbreak.

“[We’re] concerned about harvest and trim workers. Even if they are available, we may not legally be allowed to have that many people on site at any given time,” one participant wrote. “Fortunately, we have a concentrate lab, so we may allocate large portions of harvest for concentrates to save on labor. Also exploring the idea of curing product longer and extending the trim over a period of weeks in the event we don’t have enough staff to trim immediately.”

As a result of the outbreak, 9% of cannabis companies reported introducing paid sick leave for their employees as a temporary measure during the crisis, while 17% have expanded their sick-time programs. Thirty-one percent are maintaining their current policies, while more than 40% report they do not offer paid sick leave and have not changed policies since the outbreak.

In order to keep doors open while also keeping staff safe, businesses reported implementing multiple policies, including introducing extra cleaning/sanitation practices (67%), allowing employees to work remotely when possible (52%), staggering work hours in line with social distancing recommendations (33%), cutting back operating hours (24%) and hosting meetings outside (15%). In written response fields, people included details of steps they implemented, including “weekly texts to remind employees on tips to prevent the spread,” “temperatures are taken upon arrival for all staff” and “full safety gear has been issued and maintained.”

Most businesses have been spared, with 59% reporting that they did not have to shut down key areas of their businesses, but others have not fared as well.

Participants reported having to shut down cultivation (6%), post-harvest (7%), processing/extraction (11%), marketing (11%) and retail dispensaries for those that are vertically integrated (8%). 

As previously reported in Cannabis Business Times, supply chain woes were felt earlier this year and could grow worse as the outbreak goes on. Twenty-seven percent responded “a great deal” or “a lot” when asked about the supply chain impact, while only 16% said COVID-19 had no impact at all.

“Since this situation is just getting started, I'm worried about my supply chain of nutrients and equipment,” one participant wrote. “I have no idea how I would acquire any parts or nutrients if it shut down and I would lose a lot. It would be worse than powdery mildew.” 

Others are optimistic that, as long as cannabis businesses are able to stay open, they will get through this difficult time.

“The cannabis sector has been deemed an essential business in our area, so we anticipate demand to be strong,” one participant wrote. “As long as we can get out product to market, we should be able to weather this storm.”

Editor’s Note: Cannabis Business Times surveyed readers March 23-March 30, 2020, using third-party website Survey Monkey. Findings are based on 216 respondents who participated in the survey