With the legal cannabis trade growing in the U.S, it is getting easier to gather analytical data that could contribute to understanding seasonal trends. Data analysts began gathering insights from some online retailers of cannabis and other related products. These insights have revealed an interesting trend that has been repeating itself since 2018. The identified trend is related to the increasing consumption of cannabis around holiday seasons. How is this affecting the industry? Are there potential challenges to this trend?
4/20 surges user interest
As you might have expected, April 20 is significantly increasing user demand for cannabis. This is a no-brainer since this holiday centers around the consumption of marijuana. In 2020 alone, cannabis retailers generated an estimated revenue of $20 million in one day.
With more states being legalized, soon enough, there might be supply chain difficulties on this day since demand could skyrocket. Currently, it is very convenient to get cannabis for sale on this holiday, but in the near future, the demand could outweigh the supply. MSOs are taking advantage of the 4/20 holiday, which has been aptly named as the cannabis black Friday. Hopefully, more licensed cultivators will jump on this opportunity by expanding operations to meet the projected growth.
2021-22 New Year’s weekend racking up millions
Another holiday that increased product demand was the 2021-22 New Year’s weekend since it recorded high sale volumes in only one weekend. The statistics for this New Year’s weekend were alarming, especially since the pattern was not on the radar of retailers. In retrospect, the surge in product demand does make sense since the majority of the population wants to have fun as they cross over to the new year.
In Montana, the revenue margins were increased to a whopping $1.5 million in just the New Year’s weekend. There is no telling how much more revenue was generated over the festive season, including Christmas. With cannabis sales in California facing more restrictions, only a few players could be profiting from these trends. The current licensing regulatory framework could also cause a supply-chain bottleneck since there are a few players in this market.
Statistical reports on higher sale volumes
There are more focused reports that reveal more insights about the spiking cannabis consumption statistics around holiday seasons. For example, one supplier reported that they experienced higher order volumes in the week before Christmas. From Dec 18 to Dec 24, sales volume spiked, in comparison to historical records. This indicates that users could be preordering for the holiday season to avoid long waiting periods as well as the risk of running out of stock.
Another retailer shared that 73% of their sales volumes dropped on Dec 25, 2021, compared to other Saturdays. That confirms that users are preordering for holidays and these insights should help retailers prepare for the next holiday season that is coming. Having enough stock for pre orders during holiday seasons will prevent stock shortage at this very profitable period.
How craft cannabis products spike sales during holidays
The genesis of craft cannabis products available in retail dispensaries and online shops contributed to this seasonal trend. Infusing cannabis into beverages and other commercial edibles has changed how marijuana users consume it during the holiday season. Instead of buying normal alcoholic ciders, marijuana users now take it with a bit of CBD added to it.
At the same time, edibles are being bought at higher volumes during holiday seasons for family and friend gatherings. In contrast, others are looking up recipes and making edibles for themselves to enjoy during holiday seasons. Craft cannabis products are also evolving the taste of cannabis consumers and giving more ideas on how this substance can be better put to use. These products are also enticing a new audience to start consuming cannabis in these alternative forms.
Exploiting the holiday season as a cannabis retailer
Cannabis retailers are definitely experiencing higher sales volumes in holiday seasons, but these margins could be leveraged for more revenue. Being adaptable to the holiday seasons can help retailers leverage their earnings to a greater extent. Retailers can take steps to have discounts during holiday seasons.
Since 4/20 is already recognized as the cannabis black Friday, having discounts during this period can improve sales margins. At the same time, it could attract new customers that might join your virtual community and be loyal customers. In a way, holiday seasons can be a way to get new conversions and higher overall sales volumes. Carefully plan the discount pricing for the holiday seasons to leverage this seasonal trend for more profit.
Forecasted future trends
More craft cannabis products will be developed as time goes and that will introduce a newer audience. The impact of a wider target audience is that seasonal trends identified during holidays will yield a higher demand. Unfortunately, this will mean more work for retailers as they might have to source the different craft cannabis products from disparate suppliers.
That is a different ball game from selling cannabis flowers, wax, or traditional edibles. For example, sourcing cannabis beverages at the right price could be harder than finding different flower strains. Therefore, retailers might have to dedicate more resources to sourcing, especially around holiday seasons, to meet the demand. Perhaps this creates a demand for third-party sourcing companies for cannabis retailers to handle dynamic consumer expectations.
The bottom line
Holiday seasons have been identified as revenue growth drivers in the cannabis industry, with millions in revenue being generated in a single day or weekend. This seasonal trend can be leveraged for higher profit margins by offering discounted prices on cannabis products. Also, cannabis retailers can use these insights to prepare themselves for higher demand during holidays. Since customers prefer preordering, having sufficient stock will prevent a loss of revenue and loyal customers.