Cannabis Has Been Deemed “Essential” in California, But Can Businesses Survive COVID-19?

Without access to federal funds, the already-struggling industry is scrambling

Marijuana in Nevada
Weed has been deemed "essential" in California during quarantine. (Suzanne Kreiter/ The Boston Globe via Getty)

Just like breweries across the country have been deemed “essential” during the coronavirus shutdown, marijuana dispensaries in California have been labeled essential and allowed to remain open. However, that may not be enough to save them: as a new Washington Post piece points out, many of the state’s cannabis businesses are scrambling to survive as the virus wrecks havoc on an already-struggling industry.

As the Post notes, there are a number of factors that pre-date the virus contributing to the struggle. “Hampered by a morass of regulation, local opposition to stores and a thriving black market, many marijuana businesses have shuttered,” the publication writes. “The vaping crisis, which was linked to the marijuana business because the pens are a popular method for smoking pot, last fall scared away investors and sent pot stocks plummeting.”

But now, while many other small businesses await stimulus checks or some form of help from the federal government, weed dispensaries are on their own, unable to receive federal aid because marijuana isn’t yet legal in all 50 states.

“There’s no money that’s going to be coming into the sector,” Nicholas Kovacevich, CEO of KushCo Holdings, told the Post. “All of these companies, including us, need to get profitable really quickly or risk running out of money.”

“We saw the potential to lose everything and then have the state or federal government not have our backs at all,” Dave Wingard, who owns Flora Terra, a marijuana cultivator and dispensary in Santa Rosa, California, said. “It was very scary.”

For some, the lack of federal support just highlights how much further society needs to go when it comes to cannabis.

“The fact that yesterday’s vice is considered today’s essential service suggests that we got the potential costs and benefits of marijuana use radically wrong,” Joseph E. Kennedy, a law professor at the University of North Carolina, told the Post. “It’s evidence of the schizoid attitude our society has toward drugs in general and toward marijuana in particular.”

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