Oregon cannabis sales are stronger than ever. Many thought that the record-breaking first quarter sales might just be the result of consumers stocking up before businesses were ordered to close, but sales have flourished during the coronavirus pandemic. State fiscal analysts expect the industry to expect a bit of a decline, along with every other business sector as the state recovers from the economic consequences of the COVID-19 health crisis, but I think that these experts may be missing something.
From the Oregon Department of Administrative Services Economic Forecast:
Marijuana sales during the pandemic have been quite strong. The dollar amount of recreational sales since March 1st are up 60 percent relative to a year ago. These increases are not only related to the stockpiling consumers did after the sheltering in place policies were enacted, but have continued through April and early May.
Interestingly, the share of home delivery sales has more than doubled in recent months but remains just 1.4 percent of all sales. Consumers still prefer to shop in store.
Some of the increases in sales of usable marijuana are in part due to rising prices, but underlying demand is up as well. The increase in sales for other marijuana products, like concentrates, edibles and the like, are due to significant gains in consumer demand as prices are flat or down.
All told, marijuana available resources are revised higher by $9 million in 2019-21 due to recent sales. Expectations are that some of these increases are due to temporary factors like the one-time household recovery rebates, expanded unemployment insurance benefits, and the shelter in place style policies. As the impact of these programs fade in the months ahead, and bars and restaurants reopen to a larger degree, marijuana sales are expected to mellow.
Over the extended forecast horizon, marijuana sales are reduced approximately five percent relative to the previous forecast due to the lower economic outlook. A relatively smaller population indicates fewer potential customers and lower total personal income than previously assumed indicates less consumer demand, all things being equal.
What could the state experts (who have continually been too conservative with their projections) be missing that could allow cannabis sales to buck the downward economic trajectory expected to hinder all of Oregon? Two things: tourists and the fact that cannabis can replace other products that people buy. It’s hard to predict how many travellers will visit Oregon and state analysts have underestimated the number of tourists shopping at regulated cannabis stores.
While Americans will take fewer vacations during an economic recession or depression, Oregon could remain a sought out vacation spot as the state is relatively inexpensive compared to traveling to California and other more expensive locales. Additionally, with fewer people, including tourists, feeling comfortable packing into restaurants, bars, breweries, and wineries, cannabis dispensaries could be more of a go-to stop for those visiting the Beaver State.
Finally, cannabis has been shown to decrease both alcohol sales and the use of prescription drugs. As more and more people start realizing that cannabis is a safer choice than most other substances, with fewer side effects (including hangovers), folks’ limited dollars could continue to flow into the cannabis industry, to the detriment of Big Alcohol and Big Pharma. Will the state experts be right or wrong, only time will tell, but Oregon’s analysts initially projected that the state would only bring in $40 million per year in cannabis tax revenue and the state more than doubled that amount last year and may just triple it in 2020.
While you are deciding on where to spend your hard-earned dollars, there is no better place than Kind Leaf for your cannabis needs. Kind Leaf offers pick-up, walk-in, and curbside delivery through Leafly online orders. And if you want to come into the store and peruse the best selection in the Great Northwest, you can count on Kind Leaf for great products, a knowledgeable staff, and top-notch safety precautions.