COVID-19 pandemic has had a substantial impact on many cannabis startups. The impact has not only been felt in the United States but all over the world. Most consumers started to stock CBD products as soon as the signs of a looming lockdown were clear. Most people stocked it for medicinal purposes while recreational users stocked the products to make the impending lockdown less boring.
Cannabis startups were affected in many ways. For instance, construction of Pharmacon’s facility slowed because of social distancing rules imposed by the North Macedonia government.
In the Netherlands, cannabis shops were initially closed before the government decided that they were essential businesses. Here we will take a look at how the COVID-19 pandemic has affected cannabis startups.
As mentioned earlier, cannabis sales went through as countries started to impose lockdown measures. However, the increased sales hit a snag as lockdown rules continued. People who needed to buy more cannabis products faced the problems of their deliveries not being delivered as they expected.
The pandemic also led to a shortage in manpower and some cannabis startups had to close down due to lack of raw products, funds, and reduced manpower.
As COVID-19 lockdown continued many cannabis startups found that their sales had already started to decrease. However, in mid-April, many states in the United States declared cannabis as essential product just like groceries. Therefore, all cannabis stores could resume normal operations. However, not all owners were able to revive their businesses due to lack of finances.
The decision to reopen cannabis stores by the government also showed how much CBD products are valued not only in the United States but also all over the world. The market disruption during the COVID-19 showed many cannabis startups how essential it is to prepare for any future disasters.
It is worth noting that the cannabis business is fairly new in many countries and many startups find it difficult to find investors and there is a lot of lobbying that still needs to be done.
Mode of Shopping and Delivery
Most cannabis startups used the walk-in-buy mode of operating their business. However, the movement problems presented by lockdown measures made it vital for many cannabis startups to move their businesses online. While the initial investment on an online platform can take a while and cost a significant amount of cash, it is worth it.
Customers do not have to leave their homes to go and buy cannabis products. As a business owner, you can even decide to offer a coupon to the customers to encourage them to come back later for more products.
COVID-19 pandemic may have caused some losses but the startups which decided to move their businesses online can attest that their businesses are flourishing during the COVID-19 pandemic.
Another advantage of moving your cannabis business online is that you will reduce the number of manpower required by a noticeable factor. That means that your business will continue flourishing while at the same time you will save money because of reduced manpower. It will also be faster to receive, process, and deliver orders.
Increased Prices of Cannabis Products
According to research done by El Pais, the prices of cannabis products doubled, and even in some places like Spain it tripled. The increase in prices made many consumers seek for the product in the black market. Even some cannabis business owners started to look for materials in the black market.
For instance, in France, the illegal market of cannabis products soared since cannabis startup owners were unable to get cannabis supplies legally. However, Canadian cannabis startups continued to operate normally and their sales even increased.
COVID-19 pandemic is considered an extinction-level event for many businesses. However, cannabis startups that were prepared were able and are still surviving despite the problems COVID-19 has brought along to many businesses. It is advisable for cannabis startups to put in place measures in the future to survive such disasters.