Pandemic Drives, Changes Marijuana Buys


Pandemic Drives, Changes Marijuana Buys

The coronavirus pandemic has correlated with an increase in legal marijuana purchases both statewide and nationally, industry and state officials agree, though Arkansas’ cannabis industry is too new to draw too many conclusions.

BDSA of Boulder, Colorado, which analyzes the national cannabis industry, said sales in 2020 exceeded its projections by 13%, but officials cautioned that there are multiple reasons for the robust growth, such as new state markets, maturing markets and the pandemic.

“When we see growth in the marketplace, it is hard to [attribute] everything to COVID,” said Kelly Nielsen, vice president of insights and analytics at BDSA. “There are some really clear trends and interesting dynamics that we have seen. There has definitely been a shift in consumer thinking and behavior.”

Arkansas has seen growth in its medical marijuana sales, which began in May 2019, although an exact accounting is difficult because the state has a convoluted reporting schedule that varies from as short as 10 days to as many as several weeks. Some rough conclusions can be gleaned from estimations.

For example, the state reported approximately 625 pounds of marijuana sold worth $4.4 million by marijuana retailers in a series of reports that encompassed October and short periods of September and November in 2019. In the same general period in 2020, during the pandemic, Arkansas dispensaries sold approximately 3,300 pounds of marijuana worth more than $19 million.

Scott Hardin, spokesman for the state’s Department of Finance & Administration, said Arkansas is averaging about $665,000 in marijuana sales daily but closed 2020 with more than $1.2 million in sales on Dec. 31.

“We get tracking, breaking it down day by day and, starting back in March and April of last year, we saw certain days that started to pop and rise,” Hardin said. “Thursdays and Fridays seem to be the two days that really had sales taking off.”

Robust 2020

Nationwide, BDSA had predicted sales for marijuana would top $16 billion in 2020, which would have been a significant increase from $12.1 billion in 2019. Now BDSA is expecting 2020 to have seen sales of approximately $18 billion, nearly 13% over its first projection.

Sales comparisons from other states are clearer. California reports its sales quarterly, and had not released its final quarter as of early February, but in both the second and third quarters of 2020, California surpassed $1 billion in sales for a total of more than $2.2 billion; in 2019, the two quarters totaled slightly less than $1.4 billion.

Illinois sold more than $251 million in medical marijuana in 2019. In 2020, that number jumped to nearly $366 million.

The state allowed the selling of recreational marijuana in 2020 and, in January, dispensaries sold a combined $62.6 million in recreational and medical marijuana. In January 2021, Illinois dispensaries sold $88.8 million worth.

Stress Relief

Nationwide, the industry trends point to the pandemic changing buying habits for marijuana just as it did for toilet paper.

Hardin said Arkansans are taking fewer trips to dispensaries but buying much more product when they do visit. Arkansas allows medical marijuana patients to buy as much as 2½ ounces during any 14-day window.

“It also seemed like people were making larger individual purchases versus visiting several times,” Hardin said. “We are hearing anecdotally that people were maximizing that 2½-ounce limit. If we assume that is $400 an ounce, that is a pricey purchase, but there were a large number of Arkansans doing that and they continue to do that.”

Nielsen said BDSA canvasses consumers and found that 30% of them said they buy marijuana more often because of the pandemic and 45% said they buy more product when they do buy.

“When we asked people, ‘Why are you doing this?’ they said it is because they are spending more time at home,” he said. “They are not going out as much.”

Dragan Vicentic of Green Springs Medical in Hot Springs said sales at his dispensary were growing “exponentially” until he got involved in a legal dispute with several of the state’s cultivators. Vicentic isn’t surprised that medical marijuana is proving to be pandemic-proof and said federal stimulus checks helped fuel sales. “People need their medicine,” Vicentic said. “ Sometimes they are going to cut corners on other things so they can afford it.”


Sales in California, Illinois
All dollars in millions

CALIFORNIA

2020

Change From 2019

Q1

$836.60

48.7%

Q2

$1,073.80

62.7%

Q3

$1,194.70

66.0%

Q4

NA

NA

     
ILLINOIS

2020

Change From 2019

January

$23.4

84.3%

February

$24.8

75.9%

March

$29.9

68.9%

April

$31.1

4.0%

May

$32.1

62.9%

June

$29.7

42.1%

July

$33.3

49.3%

August

$31.5

31.8%

September

$31.4

38.9%

October

$33.1

31.3%

November

$30.8

17.6%

December

$34.5

25.9%

Total

$365.6

39.2%

Sources: California Department of Tax & Fee Administration, which does not report marijuana sales by month; Illinois Department of Professional & Financial Regulation

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