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April 11, 2020, 2:05 p.m. EDT

Pot shops are considered ‘essential’ businesses in most states where it’s legal, but the rules are shifting

Massachusetts shut down recreational sales on fears of buyers flooding the state, while Canada’s most populous province moved to online-sales only

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By Max A. Cherney


Bloomberg News/Landov
Sales are continuing at California cannabis stores such as Harborside’s Oakland dispensary, photographed on March 23.

When California became the first state to issue a shelter-in-place because of the COVID-19 pandemic, it set another standard by declaring cannabis an “essential business.” But just as states’ overall responses to the pandemic have varied from California’s early mandate, so have marijuana rules.

California Gov. Gavin Newsom decided that dispensaries should be treated something like pharmacies, but also kept recreational sales open, with cannabis businesses adopting safety measures such as curbside pickup, delivery and distancing within retail stores. Nicole Elliott, Newsom’s senior adviser on cannabis, told MarketWatch that California wanted to continue offering medical marijuana users their prescriptions, and recreational smokers an alternative to the black market.

“Recognizing that patients need access to this medicine, as well as acknowledging the importance that consumers continue to be able to access legal cannabis made safer by our regulated marketplace, the governor deemed the cannabis industry essential,” Elliott said in a statement.

While other states with legal recreational marijuana sales followed suit, Massachusetts went in the other direction: It shut down recreational cannabis operations, with the governor expressing concerns that people from neighboring states would travel there to buy weed and spread the virus, since it is one of the few states with recreational pot in the Northeast. Gov. Charlie Baker has allowed medical marijuana sales to continue with new safety measures at stores, but shut down recreational pot sales, and doesn’t have any plans to reopen those businesses four years after voters expanded legal access to the drug.

See also: Pot smokers stock up for pandemic on ‘the vice of choice when alone’

Aside from Massachusetts, the other eight U.S. states that allow recreational cannabis sales had all deemed recreational pot retailers essential as of Monday afternoon, though Maine has yet to open recreational pot stores and Congress has prevented Washington, D.C., from implementing a recreational pot regime that was passed by voters. In another approach to handle the pandemic, Nevada has closed all retail locations and is allowing only delivery for recreational and medical cannabis sales.

Canada offers an example of the changing nature of marijuana sales amid the pandemic. Ontario, Canada’s most populous province, had deemed cannabis retailers essential, but said Friday that it would shut down pot shops and allow only online orders from the government-run stores with postal delivery, following similar decisions by Newfoundland and Prince Edward Island. Ontario’s Ministry of the Attorney General was reportedly seeking to allow curbside pick-up in the wake of that decision, however.

Even though in-person retail was shut down in Ontario, Canada’s licensed producers are continuing operations, as many of the largest companies are based there, including Canopy Growth Corp. /zigman2/quotes/200603886/composite CGC -5.47% /zigman2/quotes/202205609/delayed CA:WEED -5.73%  — which had previously said it was closing all stores it operated — Aphria Inc. /zigman2/quotes/207425803/composite APHA -3.89%   /zigman2/quotes/205566616/delayed CA:APHA -3.57%  and Cronos Group Inc. /zigman2/quotes/206842762/composite CRON -4.31%   /zigman2/quotes/202715342/delayed CA:CRON -4.77%

In states where only medical marijuana is legal, the vast majority have said that patient access is essential; those that have not made specific declarations had not moved as of late Monday to shut down operations. Some, such as West Virginia, do not yet have fully operational medical cannabis programs.

“In the 33 states that have legalized medical cannabis, patients need to purchase medicine for cancer, epilepsy, [post-traumatic stress disorder], and other conditions,” Randal Meyer, executive director of the Global Alliance for Cannabis Commerce, said over the phone. “There is a good reason for cannabis [retailers] to be treated like pharmacies. The basis is medical.”

How the industry is dealing with coronavirus

Industry insiders interviewed for this story said that as with other goods, like groceries, it would be possible for the coronavirus to survive on cannabis packaging, though there doesn’t appear to be specific information on whether the virus is able to survive on cannabis flower itself, or if so, for how long.

Employees are likely more at risk than consumers, and several employees in the pot industry across the country have already tested positive for COVID-19. Growing operations have been forced to take measures to reduce the number of staff working at sites to protect workers and the community. Canadian producer Organigram Holdings Inc. /zigman2/quotes/209289540/lastsale OGI -0.75%   /zigman2/quotes/202287350/delayed CA:OGI -0.44%  said Monday that it was temporarily laying off 45% of its staff, or about 400 people, but the situation continues to evolve.

Coronavirus and cannabis: Vape supply is a concern due to China shutdown

Guidelines for operating recreational cannabis companies amid the pandemic differ from state to state, but generally focus on social distancing, limiting contact between consumers and retailers, and increasing sanitation. Colorado’s state guidelines, for example, instruct cannabis operators to limit the number of people inside licensed sites, ensuring people are at least 6 feet apart, encouraging pre-orders and curbside pickup, arranging payment before pickup, limiting the formation of lines and if a line does form, capping the number of people in it.

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Volume: 5.11M
Aug. 11, 2020 4:00p
P/E Ratio
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Dividend Yield
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Market Cap
$6.65 billion
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CA : Canada: Toronto
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P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$8.88 billion
Rev. per Employee
$150,142
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/zigman2/quotes/207425803/composite
US : U.S.: Nasdaq
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P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$1.33 billion
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$147,410
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/zigman2/quotes/205566616/delayed
CA : Canada: Toronto
$ 5.94
-0.22 -3.57%
Volume: 2.11M
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P/E Ratio
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Dividend Yield
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Market Cap
$1.78 billion
Rev. per Employee
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/zigman2/quotes/206842762/composite
US : U.S.: Nasdaq
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CA : Canada: Toronto
$ 7.39
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P/E Ratio
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Dividend Yield
N/A
Market Cap
$2.72 billion
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$70,780
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/zigman2/quotes/209289540/lastsale
US : U.S.: Nasdaq
$ 1.33
-0.01 -0.75%
Volume: 2.99M
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P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$259.35 million
Rev. per Employee
$49,972
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/zigman2/quotes/202287350/delayed
CA : Canada: TSX Venture
$ 6.85
-0.03 -0.44%
Volume: 392,662
Aug. 21, 2019 4:00p
P/E Ratio
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Dividend Yield
N/A
Market Cap
$1.07 billion
Rev. per Employee
$64,794
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