As medical marijuana dispensaries change procedures amid coronavirus panic buying, Maryland shop owners fear supply chain shortage
March 30, 2020 | Geoff Marshall
By Taylor Deville for the Baltimore Sun
“What this points out is why federal oversight is really needed. Even in this crisis, it shows we really do need something that gives medical cannabis patients consistent access to their ... medicine.”
Maryland’s medical cannabis dispensaries have seen booming sales amid the coronavirus pandemic even as they’re forced to change the way they serve patients.
Dispensary operators say the panic-buying is exacerbating supply chain bottleneck and causing some to fear the long-term effects should the increased demand continue.
“Every store in the state is busier than they’ve ever been,” said Mitch Trellis, owner of Remedy Columbia in Howard County.
Patients — many sequestered to their homes — have been stocking up as their monthly prescription limits allow. Growers say the challenges they’re facing are the same issues hampering businesses all over the world regarding “human capital,” said Mackie Barch, chairman of the Maryland Wholesale Medical Cannabis Trade Association and president of the Baltimore-based Culta operation that grows, processes and dispenses medical cannabis.
“All of our [association] members are experiencing human resource issues,” Barch said.
That means less man hours as employees with no available babysitter call out to watch their kids, or socially distance to avoid potentially infecting elderly parents, all while managers try to stagger growers’ schedules to adhere with state guidelines prohibiting close gatherings of more than 10 people, Barch said.
“It’s not making the production of cannabis any harder; it’s mostly the post-harvest production and delivery that’s a little bit more challenging,” he said.
“This could create some longer term shortages but so far vendors have been great about getting our dispensaries what we need,” said Ashley Chase, general manager for Mission Dispensaries, which operates four facilities in Maryland, including locations in Hampden and Catonsville.
David Torres, communications director at the Natalie M. LaPrade Maryland Medical Cannabis Commission, said the regulatory body has not been contacted by patients or license-holders with concerns about supply issues.
“Medical cannabis growers and processors continue to increase production each month,” he said in an emailed response.
Maryland’s supply chain had already been bottlenecked, Trellis said, facing a rapidly increasing number of registered patients while those who successfully competed for the limited numbers of growing, processing and dispensary licenses worked to build out a new industry plagued with fits and starts from the outset.
Maryland added more than 3,700 new patients each month of 2019, according to an industry analysis by consultant Beacon Economics. Patients now total more than 95,000 in the state, according to the cannabis commission.
“The shortages are coming,” Trellis said. “I don’t think that the demand has tapered off."
At Curio Wellness, a Lutherville-Timonium dispensary that also grows and processes cannabis, “our ability to fulfill orders hasn’t changed" despite the increase, according to chief executive officer Michael Bronfein. “We have no issue in meeting demand.”
But the concern over supply is “absolutely” legitimate, said Michael Piermont, Chief Revenue Officer at LeafTrade, an online platform that connects licensed growers with medical dispensaries.
“If you were to essentially stop sales today, there would already be more sales [from dispensaries buying inventory] in March than there were in all of February” before the U.S. began ramping up measures to curb the spread of the novel respiratory illness, Piermont said.
Through LeafTrade, used by the majority of Maryland’s 15 cultivators and accessed by 92 state dispensaries last week, Piermont said the average order has increased by about $3,000 from February to March, with dispensaries across the U.S. buying more product, and buying it more frequently.
“There’s only so much inventory,” Piermont said. “If you’re buying Pepsi and you want more Pepsi, [a factory] can make more. You can’t just make more cannabis. It has to grow and be extracted and dried."
That process can take up to six months for cannabis flower to reach dispensaries, Trellis said.
“Cultivators are being smart by holding back a little bit of inventory because people are overbuying — just like toilet paper,” Piermont said.
“Getting product before [the pandemic] for high volume stores was not easy,” said Michael Tese, general manager at Gold Leaf in Annapolis. “So now I believe it’s definitely gonna get worse if the amount of demand increases.”
Industry members say the demand results from increased anxiety spurned by the pandemic, and, before Gov. Larry Hogan declared which non-essential businesses must close Monday, a fear that medical cannabis facilities would be shuttered, given the murkiness of state regulations versus federal law that deems cannabis a Schedule I drug.
“Last week, people were really concerned that they couldn’t get their medicine in a timely manner and what would happen if we were just to shut down,” said Gina Dubbe, owner of Greenhouse Wellness in Ellicott City.
On Tuesday, after Hogan’s announcement, Dubbe said “we are not seeing the bigger and heavier crowds that we did. People I think are more confident that their medicine will be deliverable to them.”
Changing how they deliver
Medical cannabis since its inception has been regulated on a state-by-state basis, “which is really the way the whole cannabis industry is being run now,” said Jim Reis, director of business development at the Baltimore-based law firm Offit Kurman, which works with cannabis industry members.
Nationwide, cannabis advocates say the pandemic is highlighting the need for federal regulations of the cannabis industry.
Eighteen states that have legalized cannabis for medical use have declared dispensaries to be an essential business, while several states have yet to decide if dispensaries should remain open, according to Americans for Safe Access, a medical cannabis patient advocacy group.
Direction from those states on how dispensaries should serve patients varies though, with some allowing telehealth services, other states adjusting the number of caregivers and limiting the number of patients who are allowed to purchase, and other states that are authorizing delivery or curbside pick up services for the first time , said Debbie Churgai, interim director for Americans for Safe Access.
“What this points out is why federal oversight is really needed,” Churgai said. “Even in this crisis, it shows we really do need something that gives medical cannabis patients consistent access to their ... medicine.”
In Maryland, individual businesses have been rolling out new policy changes, following guidelines laid out by the Maryland Medical Cannabis Commission which:
- Authorize telehealth for certification renewal
- Suspend requirements for patient signature
- Suspend deli-style sales and sniff jars
- Extend expiring registrations until 30 days after the state of emergency is terminated
- Authorize curbside delivery
- Temporarily reduce or stagger staff, alter business hours, implement enhanced cleaning procedures, use order-ahead features, implement delivery or curbside pickup
- Post Maryland Department of Health COVID-19 signage.
Dispensaries have implemented the restrictions at varying degrees. Some facilities like Remedy Columbia and Rise Joppa, located in Harford County, have barred patients from the building altogether, asking customers to place orders online and wait in their cars for curbside service, a newly authorized delivery method.
Remedy Columbia and Rise Joppa have also cut down staff and nixed the daily deals common in medical dispensaries.
Curio Wellness, which does not yet offer delivery or curbside pick-up, has limited visitors allowed in the waiting room to just five, and has taken extra measures by installing glass partitions between employees and patients at counters and putting down “social distancing tape” to keep patients at a 6-foot distance from each other on furniture, at every cash wrap counter, at the patient check-in desk in the waiting room outside of the dispensary, and on the sidewalk outside while patients wait in line, Bronfein wrote in an emailed response.
At Greenhouse Wellness, along with wearing gloves and masks and disinfecting surfaces every two hours, bud tenders are reserving some inventory for hospice patients in case a supply chain shortage or circumstances in the ongoing pandemic prevent the dispensary from restocking, Dubbe said.
While dispensaries reported more average sales Tuesday, Tese said demand at Gold Leaf “definitely hasn’t decreased by any means yet. But I’m sure as people become used to the new normal ... they’ll stop panic buying.”