CommCan Inc. lost about $2 million in roughly two months. NETA saw sales drop by 85% due to the shutdown of recreational marijuana amid the coronavirus pandemic. Good Remedies experienced similar drops while laying off about 70 employees.
While other small businesses could apply for Paycheck Protection Program loans, the marijuana industry was shut out because it’s still illegal on the federal level.
Monday’s announcement by Gov. Charlie Baker, which allows recreational marijuana stores to reopen for curbside delivery on May 25, acted as the aid needed to ensure the survival of many in the industry.
“The only way to survive is to be open,” said Jeff Herold, the Chief Operating Officer of Garden Remedies. “That’s our way to survive, is people coming through our door.”
With Baker’s plan allowing for recreational marijuana stores to reopen, the industry now turns its attention to the Cannabis Control Commission to provide guidelines on recreational marijuana. In April, the commission approved curbside operation for medical marijuana.
For medical, employees need to verify the age, registration status and patient allotment of the patient or caregiver before the purchase is completed. Video camera coverage of areas where marijuana is handled or dispensed is required.
Companies like CommCan Inc. and NETA, who offered curbside pickup for the last nine weeks, hope the transition will be a smooth one from what they learned from the medical sales.
“We are already hard at work putting our plans together for introducing a curbside service at our Brookline store and expanding on the service we’re offering in Northampton,” NETA President Amanda Rositano said. “I think there’s going to be a lot of communication to our customers in making sure they understand what this new environment will look like.”
CommCan Inc. may have one of the more sophisticated systems for curbside. Using radio frequencies, customers at the company’s Millis location can tune into 90.1 FM in their car. Once an order is ready, the customer’s number will be called over the airwaves.
It was implemented about a month prior to the shutdown, said Ellen Rosenfeld, who co-owns CommCan with her two brothers Marc and Jon.
“We keep everyone in their vehicles. There are no lines outside,” Rosenfeld said. “It was incredibly successful. People loved it.”
CommCan Inc., has seen increases in both the number of medical customers and amount the average medical customer is purchasing, Rosenfeld said. Despite that, Rosenfeld said the company experienced losses of about $2 million in the nine weeks since Baker’s order deemed recreational marijuana non-essential.
“I’m holding my own but it doesn’t compare,” Rosenfeld said. “I don’t care if half the people go out and get a medical card. It doesn’t compare. Maybe it got bumped up to 30% [of our business], but the other 70 or 80%, it’s a lot of money a month.”
The losses extend to the state and municipalities.
Recreational marijuana is subject to sales tax at 6.25%, excise tax at 10.75% at the state level, and up to 3% tax at the local level. The local level tax is distributed to towns and cities that are home to recreational marijuana stores. Marijuana purchased by medical patients is not subject to tax.
“There goes that revenue forever,” Rosenfeld said. “It was very shortsighted, very shortsighted. We could have done all these [measures] over the past nine weeks and better than anybody.”
Now that phase one allows recreational marijuana to reopen, the industry plans to show the state it can operate safely under any recommended guidelines as well as any other business.
“We confident in our industry that we’ll do it right,” Herold said. “We’ll prove that we are essential and that we can operate safely in this environment.”
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