Lost recreational marijuana sales in Massachusetts stemming from forced store closures already could amount to $40 million among the state’s cannabis retailers, underscoring business owners’ need to be strategic about their operations during the COVID-19 pandemic.
Massachusetts adult-use marijuana retailers, which were forced to close on March 24 by the governor, might be missing out on nearly $2 million in daily sales.
Sales began an upward trend on March 11, coinciding with general consumer stockpiling, with sales averaging $15.5 million over the next two weeks – a 19% increase over the December-March 8 average.
That upswing came to an abrupt halt on March 24 after Gov. Charlie Baker’s emergency order to close recreational stores in response to the pandemic.
Some of the same factors that have bolstered Massachusetts’ adult-use marijuana program – dense population and proximity to other New England states – contributed to the governor’s decision to issue the order.
Massachusetts’ recreational retailers are not the only cannabis companies impacted by the pandemic.
Before the coronavirus outbreak and subsequent business closures, Marijuana Business Daily estimated 2020 sales in Massachusetts would be in the range of $575 million to $700 million.
It is unclear how this estimate will be adjusted without knowing when businesses will be allowed to open or how consumers will respond.
MJBizDaily surveyed business experts on strategies to weather the coronavirus storm.
“Businesses need to take a hard look at business plans in conjunction with financial data and current operations to assess short-term liquidity needs, which will be the best guide to navigating through this volatile environment,” said Francisco Colon, a partner with California-based accounting firm MGO.
Experts recommend starting by identifying removable costs such as travel, hiring and discretionary spending.
Other advice on navigating the new normal include:
- Understanding cash flow.
- Optimizing costs and revenue.
- Communicating with partners – including customers.
Maggie Cowee can be reached at email@example.com
Marijuana Business Daily’s new free report, “Crisis Management in Cannabis,” can be downloaded here.