How the Cannabis Industry Survived and Thrived During the Pandemic in Canada

Near the end of March, while most businesses were going into lockdown, Ontario's cannabis retailers were granted essential status, allowing them to remain open with some hygiene measures regarding Covid-19, such as hand sanitizing stations, plexiglass shields, and the enforcement of social distancing.

For many, it seemed like an easy decision. How could medicine be anything but essential? Ten days later, however, the province revoked that status and ordered cannabis retailers, over 50 of them, to close their doors.

A few days later, after much lobbying from the industry, the province reversed that decision and allowed cannabis retailers to reopen. The rules were expanded, and retailers could now offer delivery and curbside pickup, both firsts for the province.

Since then, many cannabis retailers in Ontario and across the country have managed to stay afloat. In some cases, the stores are thriving. The pandemic has brought lasting changes in various ways, but one of the least expected is an enhanced cannabis retail experience.

The Roller Coaster Continues

Harrison Stoker, vice president of the Donnelly Group, the parent company of Hobo Cannabis, describes those weeks in April as a roller coaster.

The Donnelly Group opened its first cannabis retail store in Ontario in April last year and has since expanded its operations to BC and Alberta. Last week, they opened a store at Yonge and Dundas in downtown Toronto, a location usually bustling with people. Not so much this year.

“Just when we felt we were ready and could really hit the gas and apply some momentum to our growth strategy, the pandemic hit,” he says.

Stoker says that his company, like others operating in the cannabis retail sector, needed to be agile, quick to adapt - not only to the constantly changing regulations but to the reality unfolding on the ground, including adopting measures to protect retail workers and potential consumers.

They had opened two more stores in Ontario a few weeks prior, in Timmins and Ottawa. Stoker says that the shutdown impacted about 80 employees at both locations. However, a few days later, when cannabis was redefined as essential, they were able to reopen.

“As far as the roller coaster goes, we’re back to a nice little peak again,” he says. “But we had to be really agile because we were actually not allowed to let anyone into our stores. And we had to quickly pivot with new pieces of technology that had never been allowed before in cannabis retail, in order to enable things like delivery, curbside pickup, and online sales.”

Stoker believes that these changes, which were instituted as temporary measures, may remain in the post-pandemic world.

“We’ve entered this new era of cannabis retail, which is obviously really familiar to your everyday customer, especially the millennial demographic that represents about half of cannabis purchasing power,” he says.

“There are expectations for modern retail features, primarily related to e-commerce or digital touchpoints. All of this was offered to us in a crisis period, 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.”

Jumping Back

Earlier this month, Choom Cannabis opened its flagship store in Vancouver's Olympic Village. The company has 18 retail locations in Ontario, BC, and Alberta. Corey Gillon, CEO of Choom, describes the opening of the Olympic Village store as “modest.” In fact, there was some debate about whether they should delay the date.

“We asked, 'Can we do this? Would it be the right thing to do for business? And certainly, would it be the right thing to do for the people who will work in the store?'” he says.

Gillon says that the guidelines provided by the various provinces in which they operate 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.

“Receiving daily calls with our entire team across the country and acting as a support center for our stores as much as possible, listening to people and ensuring that when someone isn’t feeling well, they stay home.”

Navigating the pandemic requires flexibility and adaptability, he says, something that the cannabis sector has proven to have, whether it’s temperamental changes in legislation or global pandemics dictating a new direction.

“In many ways, the cannabis sector sometimes had a dense cloud over it,” says Gillon. “We had a big rush and then the markets were beaten down. But what I think the sector has done well is adapt, especially in retail. In Ontario, retailers went from a physical model to an online migration in 24 hours. That’s really remarkable.”

For Stoker and the Donnelly Group, which also operates several bars and lounges across Canada, cannabis kept them afloat during the pandemic.

“Without cannabis retail, we might not have a Donnelly Group anymore, to be honest,” he says.

Across the country, they needed to halt in-person service, resulting in the loss of hundreds of jobs. It’s still unclear if all those jobs will return after the pandemic.

One positive side, however, is that the company was able to transfer many of its service staff to the cannabis industry.

“Each of our cannabis stores is primarily made up of our hospitality talent,” he says. “And what’s really interesting is that many of them will stay there. We’ve always encouraged a lot of staff exchange, and now we’re seeing that manifest in the most literal way we could hope for. They’ve really fallen in love with it, which is great.”