In March, as the coronavirus began its spread across the U.S. and government officials ramped up their responses, customers in Illinois’ adult-use and medical markets flocked to dispensaries. (The adult-use market opened Jan. 1, and the medical market went into effect in 2014.)
Some of that traffic came to multi-state operator Jushi Holdings’ two stores under The Green Solution brand in Sauget and Normal, Ill., which it acquired in January and plans to convert to its Beyond / Hello brand.
“[For] that first three weeks of March as compared to the February time period, we experienced a 70% increase in sales,” said Michael Perlman, executive vice president of investor relations and treasurer at Jushi. “But I would note that March 2, we went adult-use in our Sauget store, so that's also contributing significantly to that month-over-month increase. But in general, even in our Normal store, we saw an increase in demand and an increased number of transactions over the course through that first three weeks of the month.”
Illinois adult-use cannabis retail sales in March totaled $35.9 million, according to a news release from the Illinois Department of Financial and Professional Regulation (IDFPR). Adult-use cannabis retail sales in the state rose between February and March by nearly $1.1 million, according to news releases from IDFPR. However, March sales were about $3.3 million less than January sales.
Meanwhile, medical retail sales increased from about $24.8 million in February to about $30 million in March, according to news releases from the Illinois Department of Public Health’s Medical Cannabis Patient Program.
Illinois Gov. J.B. Pritzker announced a statewide stay-at-home order that became effective March 21. This followed his declaring cannabis businesses as essential and allowing curbside pickup at medical dispensaries.
“We haven't spoken to it publicly, but I would say that I think with a stay-at-home order, any time the general population is asked to stay at home and is not out there shopping for whatever it is, you're going to see a decrease in traffic in [and] around your store, which ultimately will translate in lower demand at your location,” Perlman said. “So, that's not too surprising, given that with the stay-at-home order coming in on the 21st and now it was just extended to the end of the month.”
The coronavirus outbreak and its attendant economic pressures have impacted the cannabis supply chain. Jushi had experienced issues with supply before the coronavirus struck the U.S., but the company has a strong balance sheet that can benefit it and its suppliers, Perlman said. “Knowing that we're going to pay the bill at the end of the day is a big deal for them,” he said. “It gives them comfort in terms of working with us. So, we're working very closely with our suppliers to ensure that our shelves remain stocked, and we'll continue to do so. If we decide to prepay for inventory, we have the ability to do that because of the strength of our balance sheet.”
At the same time, to address the health of patients, customers and employees, Jushi is taking numerous actions, Perlman said. For instance, it’s giving an hour to patients and customers who are 50 years or older to shop at its Illinois stores each day before it allows other customers in.
While Sauget now offers adult-use sales, it is only serving medical patients on Mondays. Normal is a medical-only dispensary.
In Sauget, Perlman said Jushi staff see adult-use patients in a separate room of its store as medical patients, who see other cashiers and whose transactions run through separate point-of-sale systems.
Jushi has also “put X's on the floor” to assist customers and patients with practicing social distancing and is asking curbside pickup customers to stay in their cars, Perlman said.
“A number of actions, a number of initiatives … were put in place to prioritize the most susceptible to potential negative implications as it relates to COVID-19,” he said.
Perlman added that Jushi is hopeful for the future. In Illinois, it plans to add two more stores in 2020; the company is still finalizing the details for those.
“We expect big things, and those will be adult-use stores when they do open up their doors, so we are excited about that,” he said.