Cannabis Industry Inhales for a Record-Breaking 4/20
With nearly half of Americans now living in states where weed is legal, holiday sales are going to be lit
It’s the Mardi Gras of marijuana, the most important day in the stoner calendar. And this April 20 (“420” is stoner code for, um, weed) is shaping up to be the most lucrative yet for the legal U.S. cannabis industry.
This year’s holiday comes at a strange historic juncture. Despite restrictions on in-person sales and, despite/because of living in the midst of a deadly pandemic, U.S. consumers have ramped up their (legal) cannabis consumption exponentially in the past year. Data analyzed by Leafly shows that sales of medical and adult-use marijuana increased by 71% over 2019. (If you’re wondering if that guy in your Zoom meeting was stoned, the answer is yes.)
Access to legal cannabis products has also been expanding dramatically. Thanks to a green wave of legalization in 2021 — with Virginia, New York, New Mexico, and New Jersey all joining the “adult use” bandwagon — over 40% of Americans live in states where any adult can legally possess and use cannabis. Not all of the 18 states where cannabis is legal have dispensaries set up yet. New York, New Jersey, New Mexico, Vermont, and Virginia are all slow-walking their rollouts over the next year or two. But states that have moved more quickly have seen a boom in sales, and a boon for state coffers. Illinois, which only legalized recreational sales in June 2019, had combined recreation and medical sales of just over $1 billion in 2020, generating more than $100 million in tax revenue. Arizona launched retail sales in late January 2021 — just weeks after voters approved a legalization initiative in the November election — generating half a million dollars in tax revenue in less than two weeks.
Over 40% of Americans live in states where any adult can legally possess and use cannabis.
In most years, dispensaries and delivery services typically get a big bump, sometimes doubling their normal sales, in the 4/20 week. Last year’s results were mixed because of COVID-related retail restrictions hitting states differently. But many retailers across the country found ways to satisfy surging demand, even in lockdown. Ganja Goddess, a California delivery platform, saw a 51% sales increase over the previous week. Lantern, an ecommerce delivery service operating in Massachusetts, Michigan, and Colorado, reported a 180% increase in sales in the week of 4/20 compared to the week prior. This year, a combination of vaccine exuberance and a relaxation of social and business restrictions should translate to big numbers all around.
Despite the proliferation of means of consumption, the most popular product category for 420 revelers, by far, is flower (dried buds to smoke), followed by vape pens, edibles and concentrates. (Sales of pre-rolled joints have been down in the past year, because COVID joint sharing? Yuck.) But the product category with the biggest lift in average daily sales during 4/20 week last year was cannabis-infused beverages, with sales up 54% (combined CA, CO, NV, OR, WA), according to data from Headset, a market intelligence service for the cannabis industry.
This year, a combination of vaccine exuberance and a relaxation of social and business restrictions should translate to big numbers all around.
Along with a jump in sales, 4/20 typically means “customers looking for higher quality and potency,” says Sam Ghods, CEO of Connected Cannabis, a cult brand of super-high-end cannabis in California and Arizona that has raised $55 million in funding since last July. Splurging for the holiday,“even a bargain buyer may want to try a top-shelf brand,” Ghods says. This year, Connected is celebrating 4/20 with a limited drop of ‘Slow Lane,’ a cross between two of our most popular strains. And it will the company’s first year selling in post-legalization Arizona. “We’re expecting a huge response there, and all signs are pointing towards the biggest 4/20 yet.”
Harborside, a vertically integrated cannabis business with retail locations in Oakland, San Jose, San Leandro, and Desert Hot Springs, is welcoming customers back to stores with a “4 days of 4/20” promotion through the week, says Alexis Mora, head of marketing. It’s mean to help with social distancing, “to break out the crowds and break up the deals,” with each day offering virtual and live events including brand pop-ups, food trucks, live music, VIP bags, and other specials. “As California prepares for re-opening and cannabis workers are some of the first to get vaccinated, it feels like 4/20 is coming back.”
“Between widespread legalization across the country and over a full year of adult-use cannabis in our home state , the normalization of cannabis use across all demographics continues to outpace itself,” says Zach Schreier, director of marketing at Michigan-based Lume Cannabis Co., a vertically integrated operator with retail locations throughout the state. Michigan’s adult-use cannabis sales totaled more than $500 million in 2020 — without any stores yet open in Detroit — according to Headset data. Through promotions and an array of delivery and pick-up options, Lume has seen a sizable increase in year-over-year revenue and average tickets this quarter, says Schreier, “and we only expect it to grow in the lead up to Tuesday. Early indications show that this weekend will be our biggest weekend in Lume history.”
Have fun out there. Be safe. And if you get in over your head, grab a lemon!