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How the Coronavirus (COVID-19) Pandemic Impacts Cannabis Operators

March 13, 2020

By Lauren Mendelsohn

On March 11, 2020, the World Health Organization (WHO) declared that the current novel coronavirus (COVID-19) outbreak has reached the level of a global pandemic. That same day, the California Department of Public Health (CDPH) recommended cancelling or postponing large group events and implementing social distancing measures for smaller events in response to the virus. On March 13, 2020, the President of the United States, Donald Trump, declared a National Emergency. The State of California has already declared a state of emergency as a result of the coronavirus outbreak, and on March 12, 2020 Governor Gavin Newsom issued an executive order that enhanced the State’s ability to respond to this crisis.

The impacts of the current coronavirus pandemic are far-reaching, with the situation affecting nearly every sector of society and the global economy, including the cannabis industry. Below, we’ve summarized some of the challenges and concerns facing this sector as a result.

Workplace-Related Concerns

  • Employers should have an adequate supply of cleaning supplies (such as hand sanitizer, soap and water, and tissues), and should provide their employees with appropriate resources (such as links to local, state, and federal health agencies and guides about proper hygiene) and training (for example, use of personal protective equipment and company emergency response procedures). 
  • Employees may be forced to stay home due to illness, quarantine, and/or childcare. This could lead to workforce shortages, as well as anxiety amongst employees over whether they will get paid. Employers would be wise to ensure their sick leave policy is compliant with state and federal law, and to ensure they are adequately prepared to continue business operations if employees have to work remotely. (Resources for California employers and employees impacted by this situation are available here.)

Supply Chain, Travel, and Event Disruptions

  • Many materials necessary for the cannabis supply chain to function, from packaging materials to vaporizer components to personal protective equipment, are typically produced in other countries (often China) and are becoming increasingly difficult to obtain.
  • Regulators may not be able to engage in much enforcement during this emergency as resources and attention will be tied up elsewhere.
  • Many large group events, such as seminars and networking functions, will be cancelled or postponed for the near future following guidance from officials. For example, the International Cannabis Business Conference (ICBC) and Spannabis 2020 were recently called off at the last minute due to coronavirus. Many 4/20 events are likely to be impacted.
  • Global travel restrictions will also impact this industry.

Cannabis-Specific Concerns

  • Consumers may choose to avoid consumption lounges, and will likely order cannabis to be delivered versus going in-person to a dispensary if that option is available to them, during a public health crisis such as this.
  • Quality control must be strictly maintained throughout the supply chain so that cannabis goods do not become a vector for the virus.
  • The Bureau of Cannabis Control, CalCannabis Cultivation Licensing, and the Manufactured Cannabis Safety Branch all have provisions in their regulations dealing with emergencies and disaster relief (§5038, §8207, and §40182, respectively). Operators would be wise to familiarize themselves with those provisions, which we’ve previously discussed here in the context of public safety power shut-offs and wildfires.

We encourage you to stay informed of any information about this outbreak published by your local, state, and federal health agencies. And whatever you do, DON’T PASS THAT JOINT (at least not for now)! 

Helpful Resources

Below are some links about how to prepare yourself and your business for the coronavirus outbreak. Please note that this is not a comprehensive list. Be sure to check with your local health agency as well.

CDC – Coronavirus Disease Main Webpage

CDC – Keeping the Workplace, School and Home Safe

CDPH – Guidance Documents: Coronavirus Disease 2019

Cal/OSHA – Guidance on Requirements to Protect Workers from Coronavirus

LWDA – Coronavirus 2019 (COVID-19) Resources for Employers and Workers

CDC – Interim Guidance for Businesses and Employers

Occupational Safety and Health Administration (OSHA) – COVID-19

WHO – Getting Your Workplace Ready for COVID-19

 

This information is provided as a public educational service and is not intended as legal advice. For more information about the impact of infectious disease outbreaks on California’s cannabis industry, please contact the Law Offices of Omar Figueroa at info@omarfigueroa.com or 707-829-0215.

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