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Medical cannabis dispensaries deemed 'essential businesses' as pandemic forces retail closures

Certain US states issued bulletins relaxing regulations regarding delivery and in-store transactions, limiting contact between patients and vendors

Empower Clinics Inc. -
Empower Clinics said patient visits to clinics continue at a record pace amidst the outbreak

Medical cannabis dispensaries have been deemed “essential businesses” by multiple US state and city health authorities amid the ongoing coronavirus outbreak, which has forced numerous retail stores to shutter indefinitely.

States such as Illinois, Massachusetts, Michigan, and New York have issued bulletins relaxing regulations regarding delivery and in-store transactions in order to limit contact between patients and vendors.

Roth analysts Scott Fortune and Nick Anderson wrote Thursday that they expect most state health departments to provide public guidance of essential and nonessential business, while multiple cannabis control boards and municipalities are tweaking regulations to allow curbside service or pick-up under the rules.

READ: Empower Clinics continues to see record patient visit numbers amid coronavirus outbreak

“As states and municipalities issue COVID-19 guidance and bulletins to determine keeping open essential and closing non-essential retail stores, we believe many of the 33 legal medical cannabis states will consider medical dispensaries as essential and remain open for medical patients to access cannabis,” Fortune and Anderson wrote in a note.

Among states where both recreational and medical cannabis is legal, many dispensaries of both sort remain open for business. In California, cities are regulating dispensaries on a municipal level, with San Francisco officials closing recreational stores but allowing medical dispensaries to stay open.

In Illinois, regulators are allowing medical dispensaries to sell cannabis on the property or curb next to the storefront. Michigan is allowing both medical and recreational cannabis dispensaries to offer home delivery services and drive-through sales on a temporary basis.

The New York Department of Health issued public guidance on Tuesday that named the medical cannabis program as essential and allowing dispensaries to remain open because they are considered medical providers.

Pennsylvania regulators followed suit, saying Tuesday that "medical cannabis dispensaries are considered the same as pharmacies, thus considered essential to operate during nonessential business closures."

Keeping up with demand

Patient visits to clinics continue at a record pace amid the coronavirus outbreak, according to Empower Clinics Inc (CSE:CBDT) (OTCMKTS:EPWCF), which runs a network of physician-staffed wellness clinics in the US.

“The coronavirus crisis is impacting all aspects of our lives, but our clinics remain incredibly busy, as patients show how important their medical cannabis treatment options are to manage increased levels of anxiety, stress, chronic pain and PTSD," Steven McAuley, Empower’s CEO said on Thursday.

"We had to quickly adapt clinic operating procedures to ensure optimum safety for employees and patients, updated cleaning and sanitation protocols, and provided extensive new communications to our team and patients."

Arizona and Oregon have both declared a 'State of Emergency' over the novel coronavirus outbreak, therefore, as a medical service provider, Empower's corporate medical clinics are considered an essential service and are not subject to certain mandated closures, the firm added.

Empower said there is an "even greater need" for plant-based medicine, as the impact of the virus becomes more pervasive.

Insulate losses

Roth’s Fortune and Anderson believe the moves will “help somewhat insulate” most operators from an expected demand and sales downturn as the country deals with the coronavirus pandemic.

“Although we expect cannabis retail sales to be materially affected by COVID-19 regulatory measures, we believe most US MSOs are still predominantly medical dispensaries selling cannabis to consumer patients,” they wrote.

Contact Angela at angela@proactiveinvestors.com

Follow her on Twitter @AHarmantas

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Price: 0.32 CAD

Market: CSE
Market Cap: $62.8 m

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