DENVER (CN) — During the pandemic, Colorado’s gone to pot.
Between January and October, the Colorado Department of Revenue reported the state marijuana industry sold $1.8 billion worth of marijuana, surpassing last year’s total sales of $1.7 billion and putting it on track to clear $2 billion for the first time in history.
With national sales from the first three quarters surpassing 2019 records, data firm New Frontier now predicts American marijuana sales to hit $20 billion by New Year’s Eve and $41 billion by 2025.
Part of this growth comes expected as businesses matured, but the marijuana industry has also proven uniquely adept at navigating the pandemic economy.
“We had this unexpected resurgence in marijuana markets that overlaps with the advent of the Covid-19 pandemic,” said Paul Armentano, deputy director of nonprofit cannabis advocacy group NORML.
“Certainly one of the reasons the marijuana markets remained so strong during this period of time was the fact that in almost every jurisdiction that allows legal marijuana, these producers and retailers were designated to be essential services that allowed them to continue their operations uninterrupted during a time period where many other businesses were forced to close,” Armentano said.
Twenty-five states labeled dispensaries essential services during lockdowns and sanctioned curbside pickup. According to research published by New Frontier, 53% of consumers surveyed stocked up on cannabis at the end of March as states imposed quarantines.
According to the report, the average monthly spending on cannabis increased by 32% between March and April. While spending averaged $235 from November 2019 through March 2020, consumers shelled out an average of $310 each month from April 2020 onward.
“About 70 to 80% of the people that we surveyed have changed their consumption habits,” said Kacey Morrissey, senior director of industry analytics for New Frontier. “They're no longer sharing joints or pipes with others. Those are typically products that would be consumed in different social settings.”
When unemployment in the Centennial State hit 6.7% in July, the cannabis industry reported its best month of 2020 so far. Coloradans bought $226 million in medical and recreational marijuana that month, up 27% from the $166 million bought in July 2019.
While Colorado voters elected to legalize adult-use cannabis in 2012, the plant remains federally banned as a Schedule I drug. According to the Pew Research Center, more than two-thirds of Americans support the federal legalization of marijuana.
In addition to being legal for recreational use in 15 states, 25 states currently allow medical marijuana use to treat conditions ranging from cancer to anxiety and depression, practices that have continued through the pandemic.
“I think it's people who are going through a stressful time in their lives and are looking for something that makes them feel good,” said Truman Bradley, executive director of the Marijuana Industry Group, a Colorado-based organization.
“I know for myself, I've been lonely and I miss the connection of being around friends, being around a wider family circle, going out to eat in restaurants. There are things missing from people's lives right now and cannabis is something you can do safely from your home,” Bradley added.
In alignment with state and local guidelines, marijuana businesses implemented mask mandates and social distancing in stores and manufacturing facilities. But over the last decade, the legal industry grew used to adapting quickly to changes in regulations from new packaging requirements to product testing.
“Cannabis plants want to be 72 degrees. They don't care what the outside temperature is, and so the cannabis industry has been modifying environments to meet specific demands for a long time,” Bradley said. “Being able to change the retail environment, or the production lines to accommodate social distance guidelines was just another change in a long evolution.”
Businesses quickly adapted to the new market and increased demand.
“We're seeing fewer customers in the day but higher average sales tickets per customer. Our consumers are not only stockpiling grocery supplies but cannabis too,” said Steven Lopez, CEO of The Green Solution in Colorado. The vertical company operates 21 retail stores as well as three indoor grows and employs 700 workers.
Overall, Lopez estimated The Green Solutions sales increased 15 to 20% from last year. Without knowing what 2020 had in store for them, the company had already invested in contact-free retail kiosks and a sleek website.
“What it did was when we went to curbside ordering, it gave us the ability to handle the volume of orders that were coming through,” Lopez said.
Now if predictions hold, the marijuana industry is expected to keep growing like a weed.
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