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Vermont Canna-Businesses Feel The Pain Of Pandemic Shutdown

Image courtesy of healthvermont.gov
Cindy Kleh
Cindy Kleh 13 Apr 2020

Many businesses around the world are in Coronavirus Freefall, as they navigate the stormy waters of past-due bills, unpaid invoices, payroll, and rent with little or no revenue. Some are making agonizing decisions about letting valuable employees go without a clear date as to when they can resume work, cancelling important events and conventions, and holding on for dear life as they ride out the economic casualties. 

Many cannabis-related businesses (CRBs) are in even more dire straits because they were recently formed and have outstanding debts and no reserves for creative adjustments to this crisis. Some CBD-related businesses are getting conflicting answers from government entities that are literally operating in chaos. 

Retail

Perhaps the hardest hit CRBs are companies with storefronts that require monthly rent and utility payments to stay afloat. They may also have large inventories of products that won’t sell during state-sanctioned stay-at-home orders. Joey Verga, owner of Green Leaf Central in downtown Burlington, described its present situation as “a nightmare.”

With the closing of local universities and a screeching halt on tourism, most of Green Leaf’s customer base is absent. Church Street – normally a vibrant pedestrian mall – now resembles a ghost town, and Verga has seen his sales drop to almost nothing. 

“There is no silver lining to any of this, and I’m afraid it’s going to get worse before it gets better.”  

Verga closed his other South Burlington shop and let his two employees go for now, a move that hit him both emotionally and financially, and he is having a difficult time finding assistance from federal, state or city agencies. “It’s hard to get a hold of someone that can help,” says Verga. “Phone lines are jammed!”

Verga is offering curbside delivery (call or message Green Leaf on Facebook to order), and he goes to great lengths to operate with strict hygiene, but it hasn’t altered the facts much. “There is no silver lining to any of this,” says Verga, “and I’m afraid it’s going to get worse before it gets better.”  

A stone’s throw away, on Main Street, Bern Gallery has seen a similar loss of customer base and a severe cut in employee hours. It helps that Bern Gallery has been going strong since 2004, and has, says owner Tito Bern, “a very cool landlord.” Bern is able to take a wait-and-see attitude, raising each of his employee’s pay to compensate for the sharp reduction in hours and the hazardous nature of working with the public right now.   

“Some stimulus money could help pay the bills for the next few months, but we’re taking this hour-by-hour, day-by-day.”

“We were one of the first to close, when bars and restaurants closed,” stated Bern. “It felt like the right thing to do. It was an eye-opening moment. I didn’t want my staff to feel uncomfortable or for the gallery to be part of the problem.”

“Some stimulus money could help pay the bills for the next few months, but we’re taking this hour-by-hour, day-by-day,” he added, refusing to even consider what restrictions could be in store for the gallery’s main event of the year, Pipe Classic XV in September. 

Food Service

Wake and Bakery in Colchester is a small business that started in 2017 to help make the taste of hemp more palatable. Owner Steph Carter expressed a sense of uncertainty and anxiety about her business during this pandemic:

“During the Covid-19 pandemic, we needed to shut down our small office/retail space to practice social distancing. We’ve stopped making products for now, not knowing when we can reopen. The current future of our business is unknown to us. But during this time of uncertainty we’re staying positive and creative. We’re coming up with new product ideas and consulting with customers on growing and cooking with hemp.” 

“We really believe in ourselves and our products,” says Carter, “and have gotten uplifting and encouraging feedback that helps to keep our hearts and minds strong. We can’t wait to reopen and interact with the community again!”

Growing Pains

Stephanie and Kendall Waterman, owners of White River Growpro in White River Junction, decided to close their doors from March 28 to April 15 to support the Governor’s stay-home order. “We are servicing commercial clients and emergencies by appointment only,” says Stephanie Waterman. “We will also continue to do mail orders through our website. We’ve got a 20% off CBD sale running online this month as a way to help our customers cope during this strange time. I don’t know about you, but I’m using WAY more CBD than usual!” 

“I don’t know about you, but I’m using WAY more CBD than usual!” 

“Our 2-year-old daughter spent the first 7 weeks of her life intubated on life support,” Waterman continues. “While her lungs have recovered, we didn’t want to take any chances. Seeing a loved one on life support fighting for every breath is a terrifying experience we wish not to relive. Additionally, we felt it was ethically the right choice to close. There are far too many people who are not taking the stay home order seriously.”

White River Growpro plans to reopen on April 15th for curbside service. “We know that this is a critical time for gardeners getting started on their outside gardens, and that now more than ever, people are feeling a pull towards growing their own food and medicine.”

Greg Newman, owner of Emeraldrose Grows in Bristol, considers himself lucky that he is the only employee, so he doesn’t have to think about payroll. “The doors are open and the lights are on,” he said. “We’re doing call-in orders through our Facebook page only and curbside pickup.” 

“We’re all first-timers in this. We know nothing.”

Lang Farms in Essex is not foreseeing any major changes to their hemp plans at this time except that Justin Lang has taken over management of Farm Fresh Hemp, the hemp portion of the Lang businesses. 

Justin’s father, John, has enough on his hands wondering about how this pandemic will affect the family’s wedding and golf course businesses. There have already been cancellations, and the first wedding of the summer is June 6. “We’ve had no payroll cuts, thankfully,” John said, “and if worst comes to worst, we can survive,” adding “I’m glad I’m not in retail.” 

When asked to speculate on the future, he stated: “We’re all first-timers in this. We know nothing.”

CBD Commodities

Allyson Sprinkle, owner of Pepper Lee CBD, has had to rearrange her life to accommodate homeschooling and the loss of her main job, waitressing. In a reversal from before the pandemic, her CBD business has become her main means of earning income instead of a side job. “I took this whole thing seriously from the start. I pulled my kid out of school a week before they were closed down, and we have been isolating for three weeks now.”

Although she has low overhead working out of her home kitchen with no other employees, her main means of selling her products through farmer’s markets, pop-ups, and a few retailers has disappeared for now. Instead, she is focusing on mail and delivery/pickup orders and hoping virus concerns will have abated by the time summer markets start. 

“I’m making all-natural hand sanitizers and herbal formulas that support lung health and help with cold and cough symptoms.”

Gyan Devi, owner of Body Botanicals, has changed courses a bit to adjust to a new, more health-oriented market without the traditional venues available for selling. She is shifting more emphasis on immune-boosting products and less on body salves and beauty products. She has even recently hired a part-time person to help with production. There is a contact form on her website for ordering items that can be shipped or picked up at her home.

“I’m making all-natural hand sanitizers and herbal formulas that support lung health and help with cold and cough symptoms. I am networking with other herbalists to find items that are scarce, and doing wellness consults with clients through Zoom meetings.”

The Frustration is Real

Scott Sparks, owner of Vermont Hempicurean in Brattleboro, sells a variety of full-spectrum CBD products from Vermont companies like Bordertown Farm, Mansfield Provisions, Humble Roots, and Upstate Elevator Supply Company.

“I classify my business as health and wellness, which is essential according to government guidelines. I am open for business in-store and also offer curbside pick up, as well as the online store. There is only one employee in the store at a time and rarely do we have more than one person in the store. Almost everything is behind glass so there is very little physical contact.” 

“I can say that almost every single customer has thanked us for being open.”

“We are not promoting being open, as we realize that brings out strong emotions on all sides. We do not put our sandwich board sign on the street, nor have we promoted being open on social media. I can say that almost every single customer has thanked us for being open.”

“We have been running some 20% off online promos which has helped generate cash flow. My manager is only working about 15 hours a week, but I am paying him his full 40-hour-a-week salary. I am also paying my part-time Saturday employees 6 hours weekly pay even though they are not working at all. 

“I have filled out the SBA forms three times so far, as they keep changing them,” he explained. I am hoping to apply for PPP but have to wait for the bank to get the information on how.” The Payment Protection Plan (PPP) was part of the Coronavirus Aid, Relief, and Economic Security Act. The Small Business Administration (SBA) will forgive loans as long as all employees are kept on the payroll for eight weeks and the loan money is used for payroll, rent, mortgage interest, or utilities. 

Scott expressed concern that CBD businesses may be exempted from the federal relief programs. “I have been communicating with staff from Sanders, Leahy, and Welch’s offices. The information on a CBD retail store being covered is all over the place. Some documents explicitly say no, and others vaguely say hemp businesses are included but it is more focused on farmers and processors.”  

Marketing During Lean Survival Periods

Will Read is the owner of CannaPlanners, a firm that focuses on digital marketing solutions and website design for cannabis businesses. He is not laying anyone off at the moment, but he isn’t paying himself. His business is feeling the crunch of the uncertainty and caution that small businesses feel, as more pressing needs require funds that might normally go toward  advertising and brand recognition. 

“Nobody is spending a lot of money on websites and marketing right now, so we’ve backtracked some website services to offer cheaper, simpler, and quicker options. E-commerce traffic is high right now with people doing more home shopping.”

“E-commerce traffic is high right now with people doing more home shopping.”

So far, Read has been able to pay his four full-time staff, but he hasn’t had any work for his team of 12 freelancers, and he is not paying himself. He is hoping to take advantage of some of the government relief programs for small businesses, but he admits to some anxieties and fears regarding the economic implications of this deadly disease, and wonders how CannaPlanners can stay afloat through all of this.

“It’s easy to be dire, but I realize that there are other businesses in worse situations than mine. I try to create a balance between being a good person and being a good businessman. This global pandemic has made me think more critically about what it means to be a responsible business. Sales are down and some bills are late, but I need to be empathetic,” he continued. “I look in the mirror every day and tell myself, ‘You got this … you have to have this!”

Legal Business Not That High Either

Tim Fair, co-owner of Vermont Cannabis Solutions, is an attorney at law who specializes in cannabis legal issues and cases. He has been consulting with clients about whether they are an “essential service” or not and other questions related to the virus, but his revenue has slowed down considerably. “Most people are still kind of shell-shocked. There’s lots of uncertainty and fear, and people don’t want to run up big bills or spend money right now.” 

Because of his low rates and slim margins, he considers this economic turndown a possible annihilator of his business. He has laid off his three employees hoping they can qualify for unemployment, and has not taken a paycheck since February. Like many other businesses, he is waiting for federal stimulus checks and small business loans to come to fruition. 

“Most people are still kind of shell-shocked. There’s lots of uncertainty and fear, and people don’t want to run up big bills or spend money right now.” 

But Fair is open for business via video chatting and Zoom meetings, and can be reached through his Facebook page

The Shaky Nonprofit Scene

When for-profit businesses are suffering, nonprofits struggle even more.

“The pandemic has brought both my salve business and my work on Vermont Cannabis Organization to a complete standstill,” said Susan Snowden, Founder of Vermont Cannabis Organization. “All events are moving towards digital, so that is encouraging me to consider different ways to continue with the mission of VCO, but since I’m a one-person show and need to have several revenue streams, I have to focus on the tried and true ways of bringing in income rather than putting my time and energy into developing new business ideas, especially at my age during an apocalypse.”

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