Cannabis retailers saw historic lows on the industry’s favorite “holiday” amid the start of the Covid-19 pandemic. What have they changed since?
The History of 420
April 20th, “4/20”, is a widely popular yet unofficial holiday honoring cannabis consumption that has been celebrated by enthusiasts since the early ’70s, with an origin story as varied as the strains of weed itself. The most common tales include things like 4/20 being the supposed number of active chemicals in marijuana, or that “4:20 PM” is teatime in Holland—a place famous for its marijuana usage.
Unsurprisingly, 4/20 usually brings elevated sales to the cannabis industry. However, 2020 was a year unlike any other.
The First Covid 420
On Friday, March 11th Rudy Gobert of the Utah Jazz tested positive for coronavirus, starting a domino-effect of closures across sporting leagues. With the fear of large shutdowns rising, it’s no surprise that the cannabis industry saw significant spikes in sales on Friday, March 13th. This continued for several days as shelter-in-place orders were established, and consumers began to stockpile cannabis out of fear that dispensaries would close. In the following weeks, those fears were put to rest as cannabis businesses were deemed essential in states with legal cannabis legislation.
Just over a month later, 4/20/20 hit, and the cannabis industry didn’t see the usual significant bumps in sales that are traditionally associated with the iconic day. While the sales were large for a Monday, they were low for 4/20. Considering the social nature of cannabis – especially on 4/20 – it wasn’t a massive surprise that the traffic for the holiday in 2020 was lower than usual, not even making the top five sales days of the year.
On top of that, given the short time since shutdowns had been enacted, many dispensaries didn’t have enough time to meet the various regulatory requirements enforced by local and federal governments.
Changes to Cannabis Retail
Changes in cannabis retail
The low sales of 4/20/20 was the first sign that the cannabis retail industry had some work to do in order to adapt to new social guidelines and customer changing needs. Cannabis dispensaries began offering various alternative shopping options, and with all of these new business needs, came an increased dependency on technology:
- Online Ordering: While many industries offered online shopping ahead of Covid-19, the cannabis industry largely did not. However, once social restrictions were enacted, cannabis retailers began offering e-commerce options for patients and consumers. Depending on each region and jurisdiction, online orders became available for either pickup or delivery, creating peace of mind and potentially saving time for cannabis shoppers.
- Curbside + Windows: Online ordering gave rise to curbside pickup and even drive-thru-like windows in some markets, allowing cannabis consumers and patients to remain in their vehicles while picking up their online orders while also cutting down on traffic inside the dispensaries and retail locations.
- Delivery: Although not legal across every cannabis market yet, the ones that allowed for legal delivery saw upticks in usage, likely based on special medical needs, transportation limitations, or simply just the convenience of not leaving the house.
Consumer trends have also altered a bit over the past year, with consumers spending 25% more per purchase, likely because they are “stocking up” more, a shopping habit many have taken up amid the coronavirus pandemic. In addition, the female cannabis consumer continues to grow, with a 3% year-over-year shift in comparison to male consumption.
The Second Covid 420
Now, one year later, Covid-19 is still very prevalent and impacting the way we live our daily lives, with social distance measures still enforced in many regions. The technology solutions needed to support the new reality of the industry’s workflows have been implemented and optimized. Because of the lessons learned from last year, the cannabis industry evolved accordingly, allowing for what is predicted to be a big 4/20 in 2021.
Akerna business intelligence, based on ten years of legal cannabis sales, predicts that Tuesday, 4/20, will be the largest sales day yet this year. The 5-day weekend period ahead of the holiday (Friday, 4/16 – Tuesday, 4/20) will usher in a predicted $370,000,000 in sales, given that history shows many cannabis consumers stocking up for the holiday will shop for their marijuana products ahead of the actual 4/20 date. Other top predictions for the day include:
- Top product: Flower will be the most purchased product on 4/20, claiming 49% of all legal sales, up 4% from the 2021 daily average.
- Order total: The average order total will be up about $10, with the average spend per customer coming in at $105.00, compared to the 2021 average of $93.48.
- Basket size: Customers will buy an average of 3.69 products, up 30% from the 2021 average basket size, 2.83 products.
With elevated sales and traffic predicted for 4/20/21, dispensaries must prepare their inventory, staff, and space. For helpful tips on how to do so, download MJ Freeway’s Surviving 420 Guide.
