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Cannabis now flying high in California retail business amid coronavirus lockdown

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Cannabis retailers in the North Bay have been working in overdrive since March 19, when Gov. Gavin Newsom issued a statewide shelter-in-place order to help slow the spread of COVID-19.

The business community has been largely impacted by the mandate, some more than others, because of the restrictions placed on people that prohibit shopping in retail stores, eating inside restaurants or gathering with groups in any setting.

Companies that can continue to operate have switched over to a completely different business model, including cannabis dispensaries.

“Since the shelter in place has been enacted, we’re doing only curbside pickup, which is a very alternative service model to our regular retail experience, which is very customer-service oriented,” said Eli Melrod, CEO and co-founder of Solful in Sebastopol. “It turns our relationship-driven model into a very transaction-related model.”

Under the shelter-in-place directive, certain types of businesses are considered “essential,” such as groceries, gas, pharmacies and banks, for example.

Retail cannabis is considered an essential business because many people rely on it to help manage pain or to sleep, Melrod said, noting that’s especially true for people over 60, which accounts for about one-third of his customers. That makes curbside delivery a viable option.

But while curbside delivery keeps his customers stocked, the situation isn’t great for Solful’s bottom line.

“We’ve seen about a 25% drop in sales since we transitioned to curbside delivery,” Melrod said, adding that he’s looking at alternative methods for bringing customer service back into the mix.

Possibilities include delivery to people’s homes instead of their picking orders up at the dispensary, as well as videoconferencing and telephone calls. He hopes to have plans in place within the next couple of weeks.

“A lot of people come to Solful because we have a reputation for being very knowledgeable about how different products can be helpful for sleep or pain,” he said. “That’s very hard to do when people are looking at an online menu or calling in a phone order.”

Solful employs about 20 people; 15 are full time. Melrod hasn’t cut any jobs. In fact, he’s temporarily giving them 15% raises — even in the light of the drop in sales.

“We’re in such an unprecedented crisis,” he said. “We’re also offering sick pay for anyone who gets sick with the virus.”

The wage bump also is intended to help supplement the partners of employees who may have lost their jobs because of the COVID-19 pandemic, he said.

San Rafael-based Moonflower Delivery has had to temporarily limit its cannabis-delivery service only to Marin County, said co-owner Nico Spann, offering reassurance that deliveries to Sonoma County will resume when the current business climate calms down.

“Last week was our biggest week ever,” Spann said, explaining that sales have spiked by 35%.

“We’re being as efficient as possible and making sure we’re following the right protocol and staying safe,” Spann said, “especially our drivers because they’re coming into contact with a lot of people.”

Some of the safety measures Moonflower has put into place for its drivers include having them sign the phones for customers; keeping a large distance between themselves and the customer when handing off the order; and using hand sanitizer and cleaning wipes for use between each delivery.

Moonflower Delivery has a staff of eight, a mix of full time and part time. No one has been laid off, he said.

“If anything, we need more drivers,” Spann said.

The company has temporarily reduced its hours of operation and is closed on Sundays, mainly to limit the time of exposure between workers and customers.

Spann said not many of his customers have medical cards, but he suspects there’s an underlying wellness aspect for those buying cannabis for recreational use.

“A lot of people that are calling us are a little bit anxious or stressed out,” he said.

Staff Writer Cheryl Sarfaty covers tourism, hospitality, health care and education. Reach her at cheryl.sarfaty@busjrnl.com or 707-521-4259.

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