May was a merry month for cannabis sales as they soared to $103 million, according to the Oregon Liquor Control Commission’s monthly sales data.
That’s an increase of 15% over April’s record of $89 million in sales, said Mark Pettinger, OLCC spokesman. Sales will likely keep growing as the coronavirus pandemic continues to be a part of everyone’s life.
The bulk of May’s sales were to recreational customers who spent $91.5 million, which means more tax collection for weary state coffers. Josh Lehner, Oregon Office of Economic Analysis economist, estimates these cannabis sales could mean $17.5 million in state tax collection.
A robust May is not news to Jeremy Kwit, CEO of Substance dispensaries in Bend. Sales have been up 30% to 50% in May. He’s had to hire more workers to handle the increase in business in addition to providing personal protection equipment for workers and maintaining physical distancing in the stores.
“We’re seeing a lot of people using cannabis to cope with all the COVID-19 chaos and social turbulence,” Kwit said. “They frequently express how cannabis helps them to have more compassion for their partners and patience with their kids.”
From March to May, cannabis sales of all types totaled $278 million, Pettinger said. Last year sales totaled $795 million. Since cannabis became legal for recreational use, a high sales month statewide was about $75 million, and that was in a summer month.
Looking at the May sales, the top three counties for sales were Multnomah with $30 million, Lane with $9 million and Washington County at $9 million.
John Kagia, New Frontier Data chief knowledge officer, said Oregon is not alone in surging cannabis sales. Other legal cannabis states too are seeing growth in the recreational sales. He said that at first sales increased because consumers were concerned that the stores would be closed, so they stockpiled it. Later, as the stay-at-home orders dragged on to contain the coronavirus, more people had time to try out different products.
“Sheltering in place gave people the freedom to try new products,” Kagia said.
In a study done by the global cannabis analytics company, about one-fifth of those surveyed are consuming more. In the first quarter, Oregon recreational cannabis users spent $99 on products. In May their spending leaped to $143, based upon a survey of the point-of-sale data, Kagia said.
By comparison, Colorado consumers spent $200 in May on cannabis products and Washington consumers spent $180 in May, he said.
“By the end of April, the reality was they wouldn’t be going anywhere anytime soon,” he said. “We have known for a long time that if you make something more convenient to a participant in the regulated market, you’ll get more participation.”
Dutchie, a Bend online delivery system for cannabis companies, has seen business grow 650%, said Zach Lipson, Dutchie co-founder.
“COVID-19 has changed everything for cannabis retail,” Lipson said. “It’s forced a massive shift in how cannabis is sold. Prior to the pandemic, online ordering accounted for a smaller percentage of sales, yet today retailers are seeing a majority, if not all, of their sales coming from online orders.”
In mid-March when Gov. Kate Brown issued her stay-at-home order, she deemed cannabis as an essential business and the OLCC adopted rules to allow for curbside delivery. Many retailers went to online ordering in addition to in store sales.
The increase in sales is likely to continue, Kagia said. Consumers tend to continue use even in tough economic times.
“Consumers will cut something else out of their budget rather than cutting cannabis,” Kagia said. “They may opt for buying value-priced products rather than cutting it out of their budgets.”
Cannabis consumers who were new to the marketplace, are now becoming regular customers, Kwit said.
“We’re seeing those busy summer Fridays every day,” Kwit said. “Our web orders have gone from 30 a day to 300. The industry has evolved, and now those that are left are running quality establishments.”