Post-COVID-19: Assessing Cannabis After A Catastrophe
Could coronavirus… create canna-jobs?
Farhaj Mayan is the CEO of Kanna, a fully integrated training and hiring platform for the cannabis industry. He shared his recent thoughts on how COVID-19 is catalyzing changes across all aspects of cannabis business operations.
1. During A Recession, Cannabis = “Vice + Medicine”
Historically, the industries that are viewed as cannabis’ closest comparisons — alcohol and healthcare — are considered recession-resistant. In the financial crisis in 2008, the U.S. saw prescription drug cost inflation ranging from 3 — 5% during and after the downturn. Similarly, we believe that the cannabis industry will perform well during an economic downturn and continue its rapid growth.
Cannabis is medically legal in most states, with dispensaries allowed to stay open after being deemed “essential” services. This well-noted (and somewhat ironic, given federal illegality) phenomena has provided a resiliency not seen in many other sectors, as medical marijuana can be dispensed to treat a wide range of conditions such as cancer, epilepsy, and migraines. Further, it will still be available to people for mental health conditions like depression, anxiety, and PTSD, all of which are expected to rise during this period of uncertainty and isolation. We expect to see increased demand in legal states, particularly Oklahoma since recently passed regulation could allow out of state visitors to apply for medical cards.
Moreover, based on past evidence, there’s a potential opportunity to accelerate growth. Due to federal prohibition in the U.S., the economic contraction will act as a catalyst for many states to legalize, as politicians will become increasingly desperate for revenue and job creation.
2. Delivery/Curbside Surge (B2B & B2C)
Alongside potentially higher demand, the desire for reduced person-to-person interaction across the supply chain will reset existing business practices and consumer preferences. Oklahoma is already witnessing this shift, as legislators recently approved a bill allowing medical cannabis delivery services.
Moreover, alongside the well-reported surge in business-to-consumer cannabis delivery adoption, business-to-business interactions will also see workflows adapt to reduced contact paradigms.
3. Tech-ifying Other Business Processes
Beyond moving and selling products, businesses will seek to reduce “high-touch” interactions elsewhere in their businesses.
Within the retail and cultivation environment, a cash-first environment often necessitates person-to-person interactions, creating a catalyst for COVID-19 risk. With vendor choice sometimes limited by stigmas around cannabis customers, companies also can face difficult decisions on how to maximize staff safety.
Along these lines, Kanna is already helping Oklahoma farms and dispensaries de-risk their business processes by setting up compliant FDIC-insured bank accounts (partnership with Abaca) and enabling affordable transport and waste disposal (partnership with Cannabis Recycling Company) all while minimizing exposure to everyone but pre-vetted, insured staff.
4. Job Creation During A Downturn
Entering a potentially challenging economic period, most farms will likely lack the necessary cashflow to “rely on the robots.”
Consider that the average cost of a trimming machine ranges between $5,000 — $15,000, while a bucking machine varies between $8,000 — $20,000. Current machines can also damage bud severely, requiring growers to sell product at a premium.
Following a potential surge in product demand, business owners will face an increased need to hire trustworthy workers (including trimmers, budtenders, security, and delivery drivers) in an expedited manner. On the supply side, traditional industries, especially in the retail and hospitality sectors, are already experiencing dramatically reduced needs for hourly and part-time labor. By offering benefits, healthcare, training/upskilling, and guaranteed income to cannabis workers, employers could incentivize a new pool of productive, diligent workers to consider building careers in the cannabis industry.
Kanna is supporting this shift through Kanna University (powered by the Cannabis Industry Institute & LearnerMobile), which launched in May. Our online cannabis trade school will give workers access to an entire library of courses where they can self-certify themselves for cannabis jobs, in an environment where certified workers are earning $15/hr+ for entry-level jobs.
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