Surge in pot buys lifts city tax haul

Delivery revenue posts triple-digit rise for year

Marijuana delivery sales in San Rafael set a new record in the second quarter of 2020 as the pandemic crippled other parts of the economy, according to city tax records.

Taxable sales for the city’s five recreational marijuana delivery businesses reached a combined $3.5 million between April 1 and June 30. That’s an increase of about 24% over the $2.8 million in taxable sales during the previous quarter, and a 175% year-over-year increase from sales of $1.3 million during those same months in 2019.

San Rafael’s 4% tax on gross receipts for cannabis delivery businesses brought a record $140,811 into the city’s coffers during the most recent quarter, up from $113,983 in the prior quarter and up from $51,109 year-over-year. The city does not allow brick-and-mortar cannabis dispensaries.

“We’ve almost tripled in size since COVID,” said Nurit Raphael, owner and founder of the delivery service Ona.Life.

To keep up with rising sales, the company has hired seven new drivers since March, Raphael said. She attributes the majority of Ona.Life’s growth this year to the pandemic.

“Delivery used to be the underdog,” she said. “People used to want to go into (cannabis) stores and have more of an experience. But with COVID, a lot of people aren’t shopping in retail stores anymore.”

Ona. Life has seen an influx of new customers, and sales from existing customers have also gone up, according to Raphael.

“If somebody used to order once a week, now they’re ordering twice a week,” she said.

For Nice Guys Delivery, sales are up about 60% this month over last year, said the company’s chief operating officer, Monica Gray. In March, Nice Guys had 20 employees. Now it has 44 and “we’re hiring almost every day,” Gray said.

“We’re getting a lot of business from people in Marin who used to work in (San Francisco) and maybe would stop at a dispensary in the city on their way home,” she said.

Customers are also ordering more, on average, than they were prior to the pandemic, she said.

“I think people just want to do something to relieve some stress,” Gray said. “There’s just so much going on.”

When Bay Area health officials announced “shelter in place” orders to stem the spread of the coronavirus in midMarch, sales skyrocketed for both Nice Guys and Ona.Life. Both Gray and Raphael said the initial surge lasted for about two weeks before leveling off, but sales have since stayed above pre-pandemic levels.

“People bought out weed in the way they bought out toilet paper,” Raphael said. “I think they were really scared we were going to get shut down, so they loaded up.”

San Rafael has deemed cannabis delivery services “essential businesses,” and has allowed the companies to operate throughout the pandemic, according to city officials.