Social consumption is also on the rise.
The unofficial cannabis holiday of April 20 – better known as 4/20 – is tomorrow, and retailers should be prepared for a “massive” sales day, according to tech firms that have tracked sales in past years.
“This is the Super Bowl for the industry,” said Socrates Rosenfeld, the CEO of California-based I Heart Jane, a tech platform that helps marijuana retailers facilitate sales. “It’s our Black Friday.”
Rosenfeld said that despite headwinds in the cannabis industry in recent months, there’s been no indication that marijuana consumption rates have slowed down, and so he’s expecting yet another enormous sales day this year, which cannabis retailers in mature markets have come to expect.
“Overall, you’ll see at least a 100% increase in sales on that day, and I think it’s safe to say it’s across all retailers,” Rosenfeld predicted, adding that 4/20 is usually about 50% more in terms of sales volume than the second-busiest sales day of the year.
“It’s how much they’re participating and leaning into it: Are they running deals and specials? Are they doing events and things like that leading up to 4/20? Have they prepared from a digital standpoint to have the biggest reach? Those are the factors that are going to correlate to higher sales,” Rosenfeld said, when asked if there are any particularly successful strategies that retailers have used to attract customers on 4/20.
According to data shared by I Heart Jane, as well as from Colorado-based cannabis data firm BDSA, 4/20 last year set a new benchmark for most state markets, with sales increasing pretty much across the board from 2021 – particularly in newer markets.
This year could be even bigger, given that 4/20 falls on a Thursday. Last year, 4/20 arrived on a Wednesday, which is traditionally a slower retail sales day, both Rosenfeld and BDSA said.
Retailers that aren’t properly prepared for huge crowds, Rosenfeld warned, could ultimately lose customers to competing shops.
Last year, there was an overall year-over-year increase in product sales of 35% on I Heart Jane’s platform, and Rosenfeld singled out edibles and vape cartridges as particularly popular product categories. The company serves roughly 2,500 cannabis retailers across 38 states and Canada.
The 4/20 sales data analysis from I Heart Jane from 2021 to 2022 found:
- 34% increase in edibles sales.
- 43% increase in vape cartridge sales.
- 22% increase in raw cannabis flower sales.
- 10% increase in extracts sales.
But data from sources also showed that in some older markets – such as California and Colorado – the cannabis holiday didn’t necessarily mean a big boost in sales for retailers.
“The impact of the holiday differs significantly when comparing mature markets and emerging markets,” BDSA wrote in a statement.
The company noted that in emerging markets – including Arizona, Florida, Illinois, Maryland, Missouri, New Jersey, and Pennsylvania – 4/20 sales last year were up 134% from other average days in the same month. By contrast, sales in mature markets – including California, Colorado, Massachusetts, Michigan, Nevada, and Oregon – were up 114% by the same metric.
And according to I Heart Jane, California and Colorado last year even saw sales decreases on average from 4/20 in 2021, at -15% and -20% respectively, compared to Arizona and Illinois, where sales increased 100% and 54% respectively last year on 4/20 from the year prior.
That said, BDSA emphasized that even mature market cannabis retailers are still likely to see a sales bump compared to average sales days in April and the rest of the year. In California, Michigan, and Oregon, 4/20 sales last year hit 138% of non-holiday sales days for the same month.
Getting Social
BDSA also reported that social consumption is “on the rise after taking a hit during the pandemic,” and predicted that 4/20 will bolster that trend, which could have longer-term ramifications for new and upcoming consumption lounge businesses in various states.
A survey from Ayr Wellness (CSE: AYR.A) (OTCQX: AYRWF) noted that 40% of cannabis consumers already had plans to take 4/20 off this year.
“Small get-togethers” was cited by just 49% of consumers surveyed by BDSA as a reason for cannabis consumption in the spring of 2021 when the COVID-19 pandemic was still in full swing, but that number spiked to 62% in the company’s most recent consumer study.
That, combined with the wide swath of product deals and discounts that retailers offer in advance of 4/20, is a good indicator that this year will again attract immense levels of customers, BDSA predicted.
“The myriad of deals on the 420 holiday are likely to attract consumers even if they do not plan on burning down a fatty with their friends,” BDSA quipped in its report. (Full Story)