Pot’s big pivot: After rolling out delivery and curbside, cannabis sales see comeback in Nevada
RENO, Nev. — Since Ed Alexander opened SoL Cannabis in Washoe Valley two years ago, he’s seen customers of all ages and all walks of life — from 21-year-olds using cannabis on the weekends to 91-year-olds using marijuana to treat a daily chronic illness.
One brand of customer he grew accustomed to seeing every day was the user who walked into his dispensary and enthusiastically examined the array of products, especially the cannabis flower.
“Historically speaking, a lot of the guest experience was based on being able to smell the product, being able to see the product — and in some cases, being able to handle the product,” Alexander told the NNBW in late July.
In the age of the coronavirus pandemic, however, that level of customer inspection has been taken off the table.
“That’s all been eliminated,” Alexander said. “So, there are no the smell jars or those types of things.”
‘WE WERE TREATED MUCH DIFFERENTLY’
SoL was one of some 70 marijuana dispensaries in Nevada mandated to close in mid-March in an effort to slow the spread of COVID-19. The state allowed shops to continue making at-home deliveries, since cannabis, used as medicine by some, is considered an essential business.
Even still, Alexander said it was “unnerving” that pharmacies in the state were allowed to stay open for walk-in business, but dispensaries were not allowed to stay open for medical patients.
“It kind of feels like,” he explained, “in some senses, yes, we’re a legitimate business; yes, we’re a legitimate industry; yes, we’ve got both local, state, national and worldwide recognition of the medicinal values of cannabis. But, if that is my prescription, if you will, of choice, I was treated differently as someone who chose Zoloft.
“Discrimination would be a strong word, but it definitely felt like we were treated much differently than other medical providers.”
Within 48 hours of closing March 26, Alexander said SoL, like many dispensaries statewide, pivoted to delivery-only.
The company put a fleet of vehicles on the road, sometimes seven at a time, to cover a 40-mile radius of its dispensary, which is tucked between Reno and Carson City in New Washoe City.
“We had to instantly shift from approximately 10% of our business being delivery to 100%,” Alexander said.
Since the shutdown, though, cannabis storefronts were allowed to roll out curbside pickup in May, and in June got the green light to reopen at 50% capacity.
Despite the COVID-related restrictions and having to rely on deliveries for a month and a half, SoL has seen a 15% increase in revenue over the pandemic, Alexander said.
“Our sales are up based on the fact that we were able to expose a lot of people to our brand during COVID and a lot of those folks have stuck with us,” said Alexander, noting SoL now sees three different types of customers. “We have those that are very, very COVID conscious and we’re delivering to those people; we have others wanting to get out of the house so we’re offering curbside for them; and we have folks that, knowing we have masks requirements in place, are coming to do conventional business with us on a walk-in basis.”
Mynt Cannabis, which operates storefronts in downtown Reno and Lemmon Valley, saw revenue initially drop to zero in late March before bouncing back in April when the company implemented delivery services and curbside pickup in May.
“Cannabis products saw robust demand amid the pandemic, underscoring how patients and customers across the board rely on cannabis to find relief and enhance their wellbeing,” a company spokesperson said in an email statement to the NNBW. “We anticipate that demand will continue to be robust.”
Moreover, Mynt says the pandemic has forced the company to build a better and more efficient business.
Like SoL, the company now offers three touch-points to customers: in-store, delivery and curbside pickup. This, Mynt says, has allowed the dispensary to expand its reach and footprint.
“Today, most of our orders start online, showing that customers are responding to this flexibility,” Mynt said. “Customers appear to really prefer curbside pickup for the speed, convenience and safety.”
Tyler Klimas, executive director of Nevada’s new Cannabis Compliance Board — which convened for its inaugural meeting July 21 in Carson City — said opening curbside pickup has been a boon for Silver State dispensaries.
“From what I’ve seen, although transactions were around 100,000 lower year-over-year, we’ve exceeded sales of June 2019,” Klimas told the NNBW. “So does it end up evening out? I think there’s a possibility. We may even exceed 2019 year-over-year because we only saw about six to eight weeks of lower sales throughout the pandemic.”
Indeed, the industry brings the state a big chunk of tax revenue.
As of April 2020, the state reported $86.9 million in marijuana tax revenue for the 2019-20 fiscal year (which ended June 30), according to the state; monthly totals for May and June had not yet been reported at the time of this story’s writing.
“Cannabis is a major component of the economy here,” Klimas said. “I think it will continue to grow and become a bigger component of the economy. We’re one of the few games in town collecting tax revenue. And I think that shows how important this industry can be for the economy and the state.”
‘TAKING THAT NEXT STEP’
Moving forward, Klimas said one of the Cannabis Compliance Board’s focuses is innovation and growth, and ensuring the regulations put in place are going to allow the industry to “take that next step.”
Already, the CCB has adopted new regulations and lifted restrictions that have been holding up license transfer requests since allegations of shady conduct emerged last October, according to previous reports.
The CCB — which is scheduled to meet again Aug. 26 — currently has three of the five members it intends to have on the board.
“Due to COVID-19 and the ensuing public health crisis, the remaining two seats on the CCB have yet to be filled,” according to a late July email sent to the NNBW by a board spokesperson. “Appointments to fill the remaining two seats will be made by Governor Sisolak shortly.”
As for Alexander, he says one of the next steps for the state’s marijuana industry should be to allow “responsible consumption” places of business — i.e., cannabis lounges.
“We need to continue to allow the industry to breathe and evolve, and I think the next logical step is to give people a place where they can responsibly consume,” he said. “Initially, when the voters of Nevada voted to legalize recreational cannabis, it was under the tagline of ‘regulate cannabis like alcohol.’ And I’m not sure what the alcohol industry would look like without a local tavern.
“We have to give both our tourists and locals places that they can consume responsibly.”
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