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Industry Reports

How do the holidays affect cannabis sales? A look at the data

December 6, 2019

Executive summary

This report looks at how holidays, both traditional and those specific to the cannabis industry, affect retail sales in the industry. Headset’s data has shown regular sales spikes during certain holidays, and this report focuses on ones with the most interesting alterations: 4/20 and the Christmas and holiday season. It looks not only at how much these holidays increase sales, but also which categories are most affected. It also dives deep into what discounts are offered around the holidays, and how those may tie into the sales bonanza effect. This information should be especially useful for retailers and product manufacturers, but will be interesting to anyone who is curious about what the actual effects of holidays like 4/20 and Christmas are.

Introduction

In our last report, we covered broader seasonal trends in the cannabis industry. This report uses our historical data to drill down into the biggest holiday in cannabis, 4/20, as well as the pre-Christmas holiday shopping season which is a critical time for most retail sectors.

Looking at the cannabis-specific holidays, we see category trends that are tied into the day’s cultural significance. For example, because 7/10 is a day created to celebrate Concentrates — 710 spells “OIL” upside down — so people gravitate towards those products specifically. Flower rules the day on 4/20, as befits tradition, but we see benefits across the board. This makes sense, as its popularity as a day to get high, however one does it, is decades old by now. Christmas and the winter holidays behave differently still, with a major boost for Edibles and relatively modest ones otherwise. Sales go up a bit, while price stays relatively stable. On 4/20, however, prices plunge and sales shoot up.

Indeed, pricing data is especially interesting around the holidays because it demonstrates how discounts do and don’t work when it comes to cannabis. For example, discounts in the week before 4/20 correspond with greatly increased sales. Around Christmas, it seems that shoppers are more interested in finding the perfect gift than the right deal, as relatively small discounts don’t seem to dampen the big seasonal sales boost.

Overall, this report has a lot to tell us about how consumers approach cannabis’ special occasions, and how cannabis is being incorporated into already existing ones. In the states where we track data, cannabis is becoming more and more mainstream, meaning traditional holidays like Christmas have a real impact on the sector. And similarly, holidays that were once countercultural, like 4/20, are becoming a relatively commonplace part of the cannabis retail experience.

Methodology

Data for this report comes from real-time sales reporting by participating cannabis retailers via their point-of-sale systems, which are linked up with Headset’s business analytics software. The data included is from the winter holiday season in 2018, as well as the 4/20 and 7/10 holidays in 2019, except where otherwise noted. For some analyses, the holiday is compared to the average of the previous four same day(s) of the week. Sales data is cross-referenced with our catalog of over 400,000  products to provide detailed information on market trends.

Headset’s data is very reliable, as it comes digitally direct from our partner retailers. However, the potential does exist for misreporting in the instance of duplicates, incorrectly classified products, inaccurate entry of products into point-of-sale systems, or even simple human error at the point of purchase. Thus, there is a slight margin of error to consider.

Do the holidays really help?

Yes, with some caveats. While 7/10 doesn’t make a noticeable impact on sales or growth, both the winter holiday season and the week around 4/20 see significant gains in both, which is good news for retailers. Christmastime saw a week-over-week growth boost of around 15%, while 4/20’s was close to 25%. Total sales for 4/20 were well over $100 million across Colorado, Washington, Nevada, and California. However, all that spending comes with a bit of a holiday hangover. While sales stayed relatively steady in the weeks following those two major holidays, growth tumbled. Sales shrunk by about 10% following the winter holidays, while the week after 4/20 saw an equal and opposite reaction to the day itself, with about 25% lower growth. While this doesn’t mean that luring in holiday shoppers and doing big 4/20 discounts is pointless — more cannabis was sold because of holidays overall, and they’re great opportunities to bring in first-time customers — it does suggest that the holidays aren’t always the mint some make them out to be.


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Team Headset

With extensive experience within the cannabis industry, Headset is comprised of a team of industry experts, data scientists and market analysts combining our abilities in technology, design and data to help push the cannabis industry forward.