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Lessons from America: How Cannabis Companies turned the Covid Crisis into Opportunities

Although every industry in North America has been touched in some way by the spread of COVID, many cannabis and CBD companies saw their revenues increase when the pandemic began to escalate in the United States in March 2020, a time when other businesses struggled to survive.

 

Shock, horror and pivot

Cannabis was declared “essential” by most state governments in early April, allowing farms, dispensaries and product manufacturers to stay open. This declaration was an incredible moment for an industry that is still deemed federally illegal and a major win for cannabis businesses at a time when establishments in other industries, like food service and other areas of retail, had to temporarily shut down operations.

Established cannabis brands and newly created companies alike have been fortunate, riding out the tidal wave by staying focused and believing in their products. However, companies looking to launch or introduce new products had to cope with the disruption.

Blumenes CBD, for example, cancelled its launch party on March 25 due to the COVID outbreak.

“After that we literally froze,” says co-owner Yael Varsha Rubin.

“We were in shock in April but then we were able to network with each other via Zoom, and we saw that people were working,” says co-owner Mishel Elkayam. “I saw their faces and they had the desire to work.”

The company originally planned on using trade shows and conventions to market its products, but shifted to online sales and social media to drive engagement.

Co-owner Stephanie Levaton-Cobos says the company shifted its launch plans to November, just in time for the holidays, with a variety of CBD products, including men’s and women’s anti-aging formulas, body massages, face serums and tinctures.

Key decision:  state governments declared cannabis ‘essential’ 

 

But many companies succeeded in keeping launch plans and new products on schedule.

“We launched as the crisis spiralled out of control, with an attempt to stay ready for anything,” says Rodney Wallace, a professional soccer player and founder of Rewind by Rodney Wallace.

Wallace discovered CBD was an effective painkiller for arthritis and the injuries he sustained during his time in Major League Soccer with the Portland Timbers and New York City FC, among other clubs, and as a member of the Costa Rican national team.

“We all deserve that comfort at the end of our day, especially now,” he says, adding that Rewind was created with the intent of helping its customers and giving back to the community. Even at the height of COVID, Rewind partnered with multiple charities, Wallace says.

 

Pandemic provided the push to get product to market

Asha Richards, owner and founder of Mellow Fellow, recognized the need for new cannabis-related products immediately. Richards’ company rebranded its organic smoke wraps and revamped its product line to meet the changing preferences of consumers.

“COVID gave us the push to get the female brand to market quickly, and we made the minis as a direct result of COVID,” she says.

During the pandemic, Richards says the company reevaluated its marketing plan as the holiday season approached.

“We feel that as people stay home, they will explore new items,” she says. “With COVID preventing smoking sessions, it made us pivot and launch another brand: J’adore La Fleur offers flower petal wraps that are made from lilies and roses. The rose wraps will be available by January 2021.” 

 

Cannabis spend surged during the pandemic lockdowns

 

In Nevada, G-Five Cultivation CEO Larry Smith began taking precautions right away. Most companies spend their initial investments on launch and then have nothing left for promotion and marketing, he says. Initially, it was tough, he says, as many dispensaries closed.

“There were no tourists and no deliveries were being made,” Smith says.

G-Five took that time to give back to the community and used social media to spread the word.

“We fed families by partnering with local restaurants,” Smith says. “We made baskets and gave them out. Families in need knew via social media that we were helping. They came by our dispensary and we gave them food for one month. We helped 250 families who were scared and didn’t know where their next meal was going to come from.

“I take money directly from G-Five and pour it back into the community where I live and work.”

Focus on employee safety

Another leading cannabis company that has continued to thrive throughout the pandemic is Platinum Vape, a San Diego-based company that employs more than 100 people and will surpass $100 million in sales in 2020.

“When California deemed cannabis ‘essential’ in April, that changed our outlook,” says CEO and co-founder George Sadler. “We asked our employees what would make them feel safe and made sure we did everything they wanted. We just added 20 new employees in California and are proud to say that.”

The company has been able to keep expanding into other markets, while carefully following health guidelines.

“Our focus now is to maximize in each market,” Sadler says.

 

Stay focused and online

Ancillary companies, like lighting manufacturers, have faced different challenges during the pandemic. Noah Miller, CEO of Black Dog LED, says his company had previously put most of its marketing dollars into trade shows and seminars, all of which were canceled for most of 2020.

 

Cannabis companies used online platforms to build business

 

“We stayed nimble and after we were deemed essential, we started engaging our customers through our online presence,” he says. “It worked, to a point, though we did feel a loss. The marketing pivot will carry us to the end of the year (2020), though we have seen about a 70% loss due to the cancellation of trade shows and seminars which are our primary marketing tools.”

During uncertain times, overcoming adversity and staying focused is part of the giant puzzle. There is a learning curve in terms of what it takes to launch a new brand or keep a company alive and flourishing.

“During this period of recovery and fear of the unknown, I think that everyone could use more certainty, more positivity,” Wallace says. 

“Hopefully we are more confident in ourselves and trust our decisions. The pandemic has also brought strength and courage, which has allowed people to live and create their own narrative. This is a time when we should dig deep into ourselves and do the best we can as humans.”

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