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Is Coronavirus Causing Your Dispensary Loss of Income?

Cannabis Insurance · May 14, 2020

loss of incomeRetailers across the U.S. and the world have been dramatically hit by the coronavirus epidemic. Over 110 retailers have temporarily closed down all their stores as a result of it. Dispensaries are not immune to this disruption, and many in the cannabis industry have suffered a loss of income. Some might not be able to weather through this storm and will be forced to make tough decisions about closing.

In such times, it’s important for a business to quickly adapt to an evolving situation in order to survive. There are adaptations that some dispensaries have had to make to keep running their business. Here’s a look at what dispensaries are facing as a result of the coronavirus. Out of these experiences, there are steps that a dispensary should take to protect the loss of income from future situations that could affect its ability to operate.

Social Distancing Forces Shops to Close

As of April 6th, there are 43 states that have issued stay-at-home orders due to the coronavirus. The level of restrictions varies, sometimes from county to county. In some areas, dispensaries are considered an essential business.

For the areas where they are not considered an essential business, there’s no other choice but to close. Dispensaries can’t sell their products online or make deliveries due to legislation, leaving no other viable channel available. For these dispensaries, you can’t pay your employees, rent, or other expenses without the ability to sell your cannabis.

Curbside Delivery as Alternative

Curbside Delivery reduces loss of income during pandemicIn some areas, dispensaries can only be open for curbside pickup or delivery. Even if you are allowed to operate as usual, it’s recommended to offer curbside delivery. This protects your employees and customers from exposure to the virus. Some customers may also strongly prefer to do business with a dispensary that only offers this service.

Generally curbside works in the following way:

  • The customer places their order by phone or online. There are several online-ordering apps that you can install on your website to allow customers to select the products they want. Otherwise, orders can be called in and employees can take down their orders, contact information, and when they would like to pick it up.
  • Their order is prepared. If the customer wants to pick it up as soon as it’s available, the employee reaches out by phone or text.
  • The customer drives to the store and parks in a designated area.
    The employee comes out of the store and verifies the ID and order. They take the payment and return to the store.
  • The employee delivers the order and any change back to the awaiting customer.

Using this process, the contact between the customer and employee is limited, reducing the risk of either party spreading the virus to one another. Employees who are assisting customers with this process should also follow sanitation and health guidelines. This includes maintaining a safe distance and wearing masks and gloves.

If your location doesn’t provide an ideal set-up for curbside delivery, consider offering a fast lane or pick up area within your store. Remember to use the same partitioning and security setting for online order pick-ups as you do with your normal business.

Estimating Losses

loss of income during corona pandemicAlthough curbside delivery has seen a favorable response for dispensaries, they are still experiencing loss of income. Many shops have reported having fewer customers, though bigger purchases appear to be made. It appears the customers who are going to the dispensary are stocking up to reduce the number of trips.

For situations like these, it is important to acquire Loss of Income insurance for your cannabis business. It protects your dispensary or grow operation when a covered loss occurs. The limits on these policies are based on your actual loss or a percentage of sales.

Protecting Your Employee’s Payroll and Business Mortgage

Loss of Income insurance is a policy that helps protect losses that are due to a natural disaster. Shutdowns like the coronavirus pandemic leave a dispensary without the ability to operate as normal. A Loss of Income policy will cover items such as taxes, payroll, advertisements, mortgage payments, and other needs of your dispensary.

You can have peace of mind that even while you are unable to operate your business, the mortgage of your location will continue to be paid. Small business owners tend to feel as if their employees are family, so it can be extra difficult to be unable to pay them. Your employee’s payroll is also protected under Loss of Income insurance so there’s no uncertainty about losing their job or being able to cover their bills.

Contact MFE Insurance for Coverage

Every business should have an insurance plan that is unique to their needs. A cannabis dispensary can often find it difficult to find an insurance provider because of the legal grey area in which cannabis exists. MFE Insurance specializes in providing insurance for the cannabis industry. We can cover your business and fill anys gap within your coverage so that you are protected in all sorts of situations. Let our experts help you get the right insurance plan for your dispensary business. Contact MFE Insurance today.

Filed Under: Cannabis Insurance

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