New York Industry Group Calls for State to Implement CBD Regulatory Framework

While cannabis businesses celebrated a major victory after being deemed essential as states responded to the COVID-19 pandemic, many cultivators and dispensaries still faced challenges and shutdowns as they pivoted their operations to comply with emergency regulations and adjust to the “new normal.”

“No one saw this pandemic coming,” says Priscilla Vilchis, owner and CEO of Premium Produce, a Nevada-based cultivation operation. “The team is doing great, we’re doing very well and all of a sudden, the governors and the mayors all [ordered] a shutdown, and curfews.”

At first, dispensaries continued placing orders with Premium Produce, Vilchis says, as patients and customers rushed to stock up on products for fear that the state would shutter its cannabis retailers during the shutdown.

While dispensaries were not forced to shut down completely as Nevada responded to the pandemic, Gov. Steve Sisolak instituted emergency orders in March that required all medical and adult-use retailers to close their storefronts and move to a delivery-only model. Dispensaries had less than 24 hours’ notice to pivot their businesses.

Las Vegas’ Planet 13 told Cannabis Business Times and Cannabis Dispensary in April that the dispensary already had a delivery system in-house before the coronavirus crisis, and the team was able to scale it to handle the increased demand for delivery during the shutdown.

Not every dispensary was able to pivot as quickly nor serve as many customers via delivery. The state’s decision to close dispensary storefronts affected Vilchis’ cultivation business as many retailers scaled back their orders. Like many businesses, Vilchis had to furlough some of her employees.

“These are the people that started off with me [when I] first opened,” she says. “I’m very blessed, because they call me every day and they know the situation. ‘Priscilla, don’t worry—when you’re ready, we’ll come in.’ They’re good people. … That hurts because we’re a team. And there’s nothing I can do.”

Solaris Farms, a Las Vegas-based greenhouse operation, was in the process of scaling up its operations to full capacity when COVID-19 reached the U.S., according to founder and CEO Michael Sassano.

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Starting in November, Solaris Farms expanded from 1,500 to 7,500 plants and nearly doubled its staff, while also providing raises to its employees to recognize their hard work during the adjustment period, Sassano says.

Although the company stopped hiring cultivation staff when COVID struck, Solaris Farms has not had to furlough any employees, and actually added security staff when local cannabis businesses were targeted in the looting and robberies that occurred amid protests denouncing the extrajudicial killing of George Floyd.

“We were watching people … casing our joint,” Sassano says. “Dispensaries got hit downtown.”

“‘Priscilla, don’t worry—when you’re ready, we’ll come in.’ They’re good people. … That hurts because we’re a team. And there’s nothing I can do.”

-Priscilla Vilchis, Owner & CEO, Premium Produce

In Michigan, as in many other states, dispensaries were allowed to provide curbside pickup and delivery during the state’s coronavirus-related shutdown, and Michigan Supply & Provisions was one of the dispensaries to pivot to curbside sales.

“We did extensive training with curbside services and how to interact with our patients and customers safely while making the process as quick and easy for them as we can possibly make it,” says Drew Anderson, Michigan Supply & Provisions’ director of human resources. “We developed a scheduling system, so we have [the customers’] orders ready so when they pull up it moves them through a lot quicker.

“It has really helped us to develop some new processes to make it as easy and convenient as possible for everyone, particularly our medical patients, some of [whom] may have compromised health conditions, making them pretty vulnerable to COVID-19,” he says.

Michigan’s Green Peak Innovations was also able to transition its Skymint dispensaries to curbside pickup under the new regulations.

“Our business shifted very quickly to an e-commerce, online ordering platform,” Green Peak Innovations CEO Jeff Radway says.

Nevada Dispensaries Find a Way Forward

As states begin loosening their coronavirus-related restrictions, growers and retailers are looking for ways to keep their employees and customers safe while reopening their businesses.

Nevada’s dispensaries are now permitted to reopen at 50% capacity, says David Farris, Planet 13’s VP of Sales and Marketing. The dispensary has re-launched in-store sales (with a state-mandated cap of 50% capacity or 10 people—whichever was fewer for each dispensary) and continues to offer delivery and curbside pickup.

The Planet 13 team has closely followed all federal and state guidelines since the onset of the pandemic, Farris says, and is in constant communication with staff about what is expected of them to keep each other and customers safe.

“We’re definitely being extremely careful,” he says. “All of our employees get their temperature checked when they enter the building for their shift. All employees are wearing masks during their shift. … We have an extraordinary amount of sanitation stations throughout our facilities, both front of the house and back of the house. We’re putting together a lot of different guidelines and rules for our staff to follow.”

Photo courtesy of Planet 13

Planet 13 has implemented inter-department training for staff on how they should clean their workstations and how often, as well as how they should interact with customers.

“We also have to educate the consumer and let them know our rules when they enter the facility,” Farris adds. “We’re always doing our best to make sure that the customer feels safe, but [is] also knowledgeable about best practices that they need to have when they’re in our facility.”

With a 112,000-square-foot facility, Planet 13 is able to ensure adequate social distancing for its customers and employees, Farris says, and the dispensary is starting to see a return of its tourist clientele as Las Vegas reopens.

“Before all this, we were 85% tourism,” he says. “A lot of the trending data, once we went 100% local, was really geared toward flower purchasing, concentrates [and] really heavy purchase habits on some more established brands in the market. Now, we’re seeing it turn the corner a little bit since Vegas started opening. … We’re seeing people starting to purchase the grab-and-go items again—the vapes, the pre-rolls, the edibles, things that are easier to consume. … I would say it will start to evolve and turn back into what we were pre-COVID.”

Massachusetts Adult-Use Reopens

Elsewhere, in Massachusetts, adult-use cannabis dispensaries, which were shut down for about two months, began reopening Memorial Day with curbside sales, and on June 8, they were permitted to open their doors to customers for in-store sales. Medical cultivators and retailers were deemed essential and allowed to continue operations but had to adhere to social distancing guidelines. Cultivators with adult-use licenses were able to retain a reduced staff to maintain operations, but could not start new crop cycles or produce products “unless operations are necessary to support the medical marijuana supply chain,” according to guidance from the Massachusetts Cannabis Control Commission (CCC).

RELATED: Adult-Use Cannabis Dispensary Shutdown in Massachusetts ‘Catastrophic’ for Industry

Ellen Rosenfeld, president of CommCan, a vertically integrated cannabis company licensed under the medical and adult-use programs with two dispensaries, said that despite being prepared for adult-use curbside sales May 25, “every worse thing that could have happened, happened.”

CommCan, like many other dispensaries in the state, set up online preordering, which opened at 9 a.m. that Monday. Once a customer placed an order, the online platform was supposed to send a text confirmation telling them when their order was ready. By 10 a.m., Rosenfeld says they had 1,000 orders placed via online preorder at the Millis store, which is licensed for both medical and adult-use sales. Other dispensaries reported increased orders because of the pent-up demand.

“If we had 100 agents working, and people could come inside, we would not be able to fulfill 1,000 orders,” Rosenfeld says.

At 10 a.m., cars started pulling into the parking lot and overflow lot, where CommCan had established a curbside pickup system. However, customers were not receiving their confirmation texts.

“Everybody was overloaded, and the system crashed,” she says. “People waited in our overflow parking lot for four-and-a-half hours for text confirmations telling them their order was ready for pickup that never, ever, ever came.”

Once they realized what was happening, CommCan shut down preordering and instead, attendants took orders directly from drivers. By 1 p.m., Rosenfeld says they had established the new system and caught up.

Photo courtesy of CommCan

CommCan is now able to serve customers in store per Phase II of the state’s reopening, which maximizes occupancy to 40% of a retailers’ total allowance. Staff and customers must adhere to social distancing guidelines, including maintaining 6 feet or more between people and wearing face coverings. CommCan has also installed protective screens at registers.

Sales are nearly back to where they were before the coronavirus pandemic hit, Rosenfeld says, but people aren’t stocking up like they were in the days before the state temporarily closed adult-use dispensaries.

“We still have curbside, but only for those who are afraid to come in—it’s not mandated. Most people want to come into the store, and it’s been great. Are we back to good numbers? Yes. We’re back to pre-COVID craze numbers. We’re quicker back to it with the inside sales, simply because an inside sale takes 3 minutes,” Rosenfeld says, adding that the reason is simple: “When you had curbside, people are parked there for 15 minutes. There’s no flow. It’s not easy.”

Although Rosenfeld says adult-use sales account for a bigger share of the sales at the Millis dispensary, the medical side has increased since the shutdown both at Millis and at CommCan’s medical-only Southborough store. Medical patients tend to spend more money per order, she says, and those sales aren’t subject to the sales taxes that the adult-use sales are.

According to minutes from the CCC meeting on May 7, the state recorded a 14% increase in certified active patients from March to April—from 63,720 to 72,502. And according to a public meeting packet prepared for the CCC’s June 4 meeting, the number of certified active patients has increased to 79,252.

“I think we’re going to do very, very, well because the medical market has gone up however many fold, and the rec market will continue in that same trend. So, my sales—everybody’s, I think—will be more. When we started, we wondered why we even did medical in Millis,” Rosenfeld says, noting the challenges of setting up both programs in one store and that medical-program patient traffic was much slower than the adult-use side. “What good came out of this? The medical program got revived.”

Ensuring Safety in Michigan’s Dispensaries

In Michigan, regulators have allowed dispensaries to operate below 25% capacity to maintain social distancing as they reopen their doors for in-store sales.

Michigan Supply & Provisions screens employees before allowing them inside the facility, Anderson says, requesting that they undergo a temperature check and complete a questionnaire about whether they have COVID-19 symptoms or if they have been exposed to someone with symptoms.

In addition, the dispensary is providing PPE for employees, such as masks and gloves, and plexiglass dividers have been installed at all point-of-sale stations to promote social distancing.

Michigan Supply & Provisions has also set up a page on its website for employees with regular updates and training on hand washing procedures, safety precautions, social distancing, and cleaning and disinfecting procedures, Anderson says.

For Green Peak Innovations, Radway says some of the stores’ sales floors are on the smaller side, so the team must be extremely careful about keeping employees safe while operating at 25% capacity.

Reopening the dispensaries will be staggered and gradual, Radway says, and the company plans open half its stores over the course of the next two weeks.

Although masks are only recommended by the state as retail outlets reopen for in-store sales, all Skymint stores will require employees and customers to wear masks while inside, and the company has implemented strict cleaning and social distancing measures.

“We want our guests to physically see us cleaning,” Radway says. “We think that is important, not just to be cleaning during off hours, but we want them to see that we are wiping down countertops, door handles, all surfaces that could be touched on a perpetual basis. We of course make masks available to consumers as well, though most have them and are already wearing them by the time they reach our stores. We want to be proactive and safe, but we also want to create an environment that people feel comfortable and safe in, and if we can’t do that, it doesn’t really make sense to open the store floor.”

As Retail Reopens, Cultivators Ramp Up

Back in Nevada, Vilchis says that as many dispensaries reopen, they are only selling their own in-house brands as opposed to purchasing product from third-party cultivators, which continues to put pressure on Premium Produce.

“I would say in about two to three months, it’s going to flip again, but right now, it’s very slow for any cultivator, any dispensary,” she says.

Vilchis has called back a few of her furloughed employees, who now work part-time as orders start to trickle in.

“They’re ordering flower, but I would say, not [as much as] they normally do,” she says. “We’re getting small orders, but orders are orders.”

The Premium Produce team is already accustomed to strict sanitation guidelines to protect its plants from cross-contamination, but Vilchis has scheduled employees in different shifts and keeps staff 6 feet apart at all times. Employees must wear masks, gloves and hairnets while working, she says.

“I don’t think there’ll be challenges [ramping back up],” Vilchis adds. “We’ve got it down pretty good; I think everyone does.”

Solaris Farms checks all employees’ temperatures and requires them to spray down with alcohol upon entering the facility, and staff must wear masks when inside, Sassano says.

“There’s no forgiveness because if we got anybody sick, then we’d have to shut down a lot of efforts,” he says. “We don’t anticipate things getting back to normal until March of next year.”

Solaris Farms has enough greenhouse space to allow adequate social distancing between employees, Sassano adds, and staff has been divided into shifts in the more condensed post-harvest areas where they trim and package the product.

Both Sassano and Vilchis agree that a return to normal will take time, and until tourists return to Las Vegas, many of the area’s businesses will have to rely on the local population.

“I think cannabis is here to stay, like alcohol,” Vilchis says. “We’re not going anywhere. It’s just going to take a little while to get to where we were.”

Editor’s Note: Cannabis Dispensary Editor Cassie Neiden and Cannabis Business Times Editorial Intern Owen MacMillan contributed to this report.