The coronavirus crisis has and will continue to cause massive cultural and economic disruptions. As Americans are being asked—and, in some cases, required—to stay indoors and venture into public spaces only for essential products and services, consumer needs and behaviors, as well as the way companies provide such products and services, are changing rapidly.
One area where these changes have been particularly rapid is in the still-tumultuous realm of legal cannabis regulation.
About a week prior to the implementation of various state shelter-in-place orders, cannabis sales increased dramatically where cannabis is legal. Compared to the same week the previous year, California sales of adult-use cannabis were 159 percent higher, Washington’s sales increased 100 percent, and Colorado’s sales were up 46 percent.
In light of such consumer demand, it’s reasonable to ask whether cannabis is “essential” and whether it is considered equally essential to all Americans.
Whether marijuana products (and related services) are or will be deemed essential or non-essential differs among states, and states electing to find the purchase and sale of marijuana “essential” are rapidly changing their regulatory structures to accommodate the risks posed by the coronavirus.
A New Development in Washington Cannabis Regulation
Washington, through Gov. Jay Inslee’s “Stay Home, Stay Healthy” order, has declared “cannabis retailers” as well as “[w]orkers supporting cannabis retail and dietary supplement retail” as essential.
In order to minimize the risks posed by the coronavirus and in-person contact, some states have elected to permit or expand the legality of curbside pickup or home delivery for marijuana. However, it is no secret that Washington does not permit either curbside pickup or home delivery, and has expressly rejected the legalization of adult-use marijuana delivery services for years. Further, Washington laws are strict with respect to retailer compliance, and relevant violations abound for conduct which is prohibited in the state, but is commonplace—or even required!—in other states’ cannabis industries. Indeed, while the issue has been visited and revisited numerous times by state legislators and local regulators, Washington cannabis retailers have never been permitted to provide marijuana in this manner—but things may be about to change.
In March, the Washington State Liquor and Cannabis Board confirmed that cannabis retailers were not required to close and went further—in a stunning change of policy—announcing it would permit “curbside service” for qualified medical patients. In short, cannabis retailers may temporarily sell to qualifying patients (or their designated providers) outside of the physical store, so long as the purchaser is located within the licensed property line. While drive-thru windows are expressly prohibited, the relaxation of these regulations could signal Washington’s willingness—as some other states have recently shown—to permit the provision of even non-medicinal marijuana in a responsible, regulated fashion outside of the traditional retail storefront.
How Other States Classify Cannabis
California’s statewide shelter-in-place order included guidance “to protect communities, while ensuring continuity of functions critical to public health and safety, as well as economic and national security.” California’s “essential workforce,” as listed under the “Healthcare/Public Health” category, includes not only traditional doctors and hospital personnel, but also “[w]orkers in other medical facilities”—and tucked into that list, at the very end, are “cannabis retailers.”
However, local jurisdictions differ with respect to the interpretation and applicability of that guidance and whether all legal commercial cannabis operations (recreational and medicinal) fall under the definition of essential workforce, or whether only licensed medical-marijuana dispensaries are permitted to remain open and sell products to patients (or their caregivers).
Nevada’s stay-home order, on the other hand, makes no distinction with respect to whether a consumer’s marijuana use is officially medically authorized. However, Nevada’s Declaration of Emergency Directive imposed restrictions limiting “[r]etail cannabis dispensaries” to “operate by delivery only pursuant to the guidance that shall be issued by the Department of Taxation.” The Department of Taxation subsequently required all retailers to close by midnight that same day, but the state simultaneously implemented new approval procedures for delivery vehicles, issuing licenses valid for 60-days, intending that all dispensaries deliver their own products to consumers for the foreseeable future.
Illinois, too, declared marijuana an “essential business” under the category “Food, beverage, and cannabis production and agriculture.” The order not only permits, but “encourages” these businesses to remain open. Further, retailers that provide medical marijuana are also temporarily permitted to sell medical cannabis outside of the “limited access area”—that is, outside of the retail store—through sidewalk and curbside services to medical marijuana patients. Patients need only walk or drive up to the walkway or curb of the street adjacent to the dispensary; retailers can now walk the product, as well as handle cash, outside of the store.
On the other end of the spectrum, however, Massachusetts’ relevant order closed adult-use marijuana retail businesses, along with hundreds of other businesses, deeming them “non-essential.” Medical marijuana dispensaries are temporarily allowed to offer only curbside/at-the-door pickup to patients and caregivers. Consumers there responded by seeking more than 1,300 new medical marijuana patient registrations in just the last 10 days of March.
Potential Consequences
In those states where cannabis has not been recognized as “essential,” communities, government leaders, and those involved in the legal cannabis industry have concerns. Steve DeAngelo, co-founder and chairman emeritus of Harborside dispensaries, summarized these concerns in a statement to ABC News: “Unlike most other products in our society, … there is an extremely robust underground market for cannabis. If the dispensaries … were closed, that slack would immediately be taken up by unlicensed delivery services.”
