SPRINGFIELD, Mass. — Last month, a letter was reportedly distributed to employees of Cultivate Holdings, a medical and recreational marijuana dispensary in Leicester.
The letter, which was dated March 18 and obtained by MassLive, noted the outbreak of COVID-19, the disease caused by the new coronavirus, was rapidly evolving. The letter offered some options to employees: continue working, stay home and get well, or stay home and collect.
For that final option, the letter noted that jobs would be protected and employees would not be penalized for their absence.
But then, after Gov. Charlie Baker declared nonessential businesses, including recreational marijuana dispensaries, had to close, the majority of Cultivate’s staff was laid off.
“During this very difficult time for the world, we are trying our best to make the right decisions for our patients, employees and customers. Every day the situation changes because our industry is new to both the national and state economy,” said Cultivate spokesperson Francy Wade. “We look forward to continuing to provide our patients with the medicine they need and hopefully, in the near future, being able to return to adult use sales for those who use cannabis as medicine without a prescription.”
Layoffs are a problem many of the state’s marijuana employees could be facing. An emerging industry in Massachusetts, marijuana dispensaries must first go through a lengthy and expensive application process.
Cultivate was among the first retail marijuana shops to open in Massachusetts in November 2018. The dispensary was already open for medical marijuana sales at the time.
Adult-use marijuana shops had to close on Tuesday. However, medical marijuana shops are considered essential businesses and can remain open during the state of emergency declared by Baker in response to the pandemic.
Garden Remedies, which has medical dispensaries/retail shops in Newton and Marlborough and a medical dispensary in Melrose, considers itself lucky to have three dispensaries that can still operate, said Brian Moran, the company’s chief financial officer.
But, closing Garden Remedies’ retail shops under the governor’s order means an 85 percent reduction in sales, Moran said.
“The industry itself won’t be able to support medical dispensaries alone,” Moran said in a phone interview Saturday.
Garden Remedies has not had to lay off staff yet, said Moran, who added that he’s aware of some companies that have had to lay off 50 to 60 percent of their staff.
Some companies and advocates have asked for Baker to reverse his ruling on recreational marijuana, saying there are a number of people who don’t have a medical card but use recreational marijuana as medication, and that some patients purchase marijuana at adult-use shops because it is closer and more convenient.
Garden Remedies said access is difficult for veterans in particular, who use VA services and struggle to obtain medical cards. Moran said he hopes to see Baker reverse his decision.
“We’re hoping, and again we don’t want to turn this into a fight,” Moran said, noting that Baker has an incredible amount of work to do amid the pandemic, “but at the same token, this is a small, growing industry that is important and people rely on our product.”
Garden Remedies will have to take a hard look at its future when its current inventory needs to be replenished, Moran said. Some of the company’s adult-use products can be converted for patients.
“It’s very hard for us to make it work now that we’re going to be able to continue for medical only for the near term,” Moran said.
Unlike some other businesses that are struggling amid the pandemic, marijuana companies are not going to benefit from bailouts or stimulus packages because marijuana is still illegal on the federal level.
Without money coming in from recreational sales, more marijuana companies may have to take measures like layoffs. The industry in Massachusetts has about 8,000 employees, Moran said, citing information from the Massachusetts Cannabis Business Association.
Unemployment claims are climbing across the nation and in Massachusetts.
The number of new unemployment claims submitted in Massachusetts rose to 147,995 during the week ending on March 21, which was nearly 20 times the number of applications submitted the previous week, according to state and federal data released Thursday.
With recreational shops closed, the state is also losing out on thousands in tax revenue. In the first year of recreational marijuana operations, the state collected $12.9 million in marijuana sales and excise taxes, and municipalities collected another $2.25 million.
Cultivate and Garden Remedies are among members of the Commonwealth Dispensary Association that are using marijuana facilities to produce hand sanitizers to donate to local hospitals, which are running low on supplies amid the pandemic.
Recently, Garden Remedies donated 15 gallons of sanitizer to the Fitchburg Fire Department, Moran said. The company’s cultivation facility is in Fitchburg.
“We’re doing what we can to help in this situation, but we could be able to do a lot more if we had the ability to do adult-use sales,” Moran said.