There was a week in early April that stands as the perfect representation of the topsy turvy reality of the Canadian cannabis industry.
Near the end of March, while most businesses were entering lockdown, Ontario cannabis retailers were granted essential status, allowing them to stay open with some slight COVID-19 mitigation measures — hand sanitizing stations, plexiglass shields, enforced social distancing.
For many, it seemed an easy decision. How could medicine be anything other than essential? Ten days later, though, the province revoked that status and ordered cannabis retailers, more than 50 of them, to shut their doors.
Just days after that, and after much lobbying from the industry, the province reversed that decision and allowed cannabis retailers to reopen. The rules were expanded, retailers could now provide delivery and curbside pickup, both firsts for the province.
Since then, many cannabis retailers in Ontario, and across the country, have managed to hang on. In some cases, the stores are even thriving. The pandemic has brought with it lasting change in many forms, but one of the least expected is an improved cannabis retail experience.
The roller coaster continues
Harrison Stoker, vice president at Donnelly Group, the parent company of Hobo Cannabis, describes those weeks in April as a roller coaster.
The Donnelly Group opened their first cannabis retail store in Ontario in April of last year and have since expanded operations into B.C. and Alberta. Last week, they opened a store at Yonge and Dundas in downtown Toronto, a location usually teeming with people. Not so much this year.
“As soon as we felt like we had our footing in and we could really put the pedal down and apply some gas to our growth strategy, the pandemic kicked in,” he says.
Stoker says that their company, like others operating in the cannabis retail space, had to be agile, quick to adapt — not just to ever-changing regulations but to the reality unfolding on the ground, including taking measures to protect retail workers and potential consumers.
They had opened two more stores in Ontario a few weeks earlier, in Timmins and Ottawa. Stoker says the shutdown impacted about 80 staff members across the two locations. However, a few days later, when cannabis was redesignated as essential, they were able to open back up.
“As it relates to the roller coaster, we were back up to a nice little peak again,” he says. “But we had to be really agile because we weren’t actually allowed to let anybody inside of our stores. And we had to pivot really quickly with new pieces of technology that had never been permitted before in cannabis retail in order to enable things like delivery, curbside pickup, and online sales.”
Stoker believes those changes, which were instituted as temporary measures, may stick around post-pandemic.
“We’ve entered this new age of cannabis retail, one that obviously is really familiar to your everyday customer, especially the millennial demographic that makes up roughly half of the purchasing power in cannabis,” he says. “There are expectations of modern retail features, largely things that have to do with e-commerce or digital touchpoints. These are all afforded to us in a period of crisis, in a reactive sense, just to keep the industry alive but I think our assumption is that this is now the standard. This is just the baseline and things will continue to improve.”
Earlier this month, Choom Cannabis opened up their “flagship” retail store in Vancouver’s Olympic Village. The company has 18 retail locations across Ontario, B.C. and Alberta. Corey Gillon, the CEO of Choom, describes the opening of the Olympic Village store as “subdued.” In fact, there was some debate about whether or not they should push back the date.
“We said, ‘Could we do this? Would it be the right thing to do for the business?’ And certainly, would it be the right thing to do for people that are going to be working in the store?” he says.
Gillon says that the guidelines provided by the various provinces they operate in gave them the confidence to move forward. It turned out to be the right move. Sales and traffic are stabilizing, he says, and progressing in the right direction.
“I think we were able to navigate that pretty well, but as we move through this, it’s about staying on top of things. Having daily calls with our entire team across the country and acting very much as a support center to our stores as much as we can, listening to folks, and ensuring that when somebody is not feeling well, that they stay home.”
Navigating the pandemic requires flexibility and adaptability, he says, something that the cannabis sector is proving to have in spades, whether it’s temperamental legislative changes or global pandemics dictating a new direction.
“In many ways the cannabis sector has had a bit of a dark cloud over it at times,” Gillon says. “We had a big run-up and then the markets took a beating. But what I think the industry has done well is adapt, particularly on the retail side. In Ontario, retailers pivoted from a brick and mortar model to an online migration in the course of 24 hours. That’s really quite remarkable.”
For Stoker and the Donnelly Group, who also operate a number of pubs and lounges across Canada, cannabis has kept them afloat during the pandemic.