Celebrating 4/20, the unofficial holiday of cannabis lovers worldwide, with a Pre-Roll and a circle friends is a tradition you could almost describe as “time-honored” at this point. Unfortunately, due to the COVID-19 pandemic, it’s not one anyone can safely honor this year. As per our most recent Industry Report, Pre-Roll sales are down and bulk flower is up, likely because social smoking is out and stocking up for the “stay-at-home” months is in. Given that the holiday has transitioned from a relatively back channel affair to an annual sales bonanza for the cannabis industry, we were curious to see what sales data could tell us about the pandemic’s impact.
First, some good news. Sales on the day of 4/20 were not as good as last year, but sales in the week preceding it were higher overall. The graph shows sales boosts over 90% for all states in 2019, while this year no one cracked 80%. Interestingly, Washington State did the best this year, while Nevada enjoyed a higher boost in 2019. Perhaps because Nevada’s sales are very much socially driven, given its reputation as a place to party, and the cannabis industry’s focus on supplying Las Vegas. Regardless, the uplifting news here is that people still bought lots of cannabis, just not all at once on the actual holiday.
Drilling down into Washington, we can see this effect quite clearly. The week before 4/20 is always a good one for sales, but it was significantly higher than a normal April week this year — 25% higher than the previous week, as opposed to only 22% higher last year. Given the social distancing requirements in place, we’d predicted that spending would be more spread out this year, and that definitely appears to be the case here. And ultimately, it seems like consumers spent as much overall as they would have normally.
Indeed, looking at the week prior sales boost in each state, we see that it pretty much evened out. California was much lower, and Nevada slightly so, but Washington sold more overall and Colorado sold significantly more. Looking at our second chart is also illustrative of this phenomenon. In2019, the actual day of 4/20 was a way more significant chunk of the week’s sales, as evidenced by the big peak at the end of the graph. This year, each day leading up to the holiday had higher sales and there was no peak, making it a wash.
Something else we noticed from our COVID-19 edition industry report was that the pandemic hasn’t just affected how much people buy, it’s affected what they buy. Interestingly, it’s been a boon for Edibles. Concentrates and Vapor Pens lost market share this year, while Edibles gained a whopping (for the category) 4.3% share. Flower was up slightly, probably due to the stocking up effect we described in that report, but Edibles stole the show. It should probably be obvious, but the fact that we’re fighting a respiratory disease probably has a lot to do with why. While the jury is still very much out on whether smoking or especially vaping cannabis is bad for you in quite the same way that cigarette smoking is, it’s hard to blame anyone for wanting to be extra careful with their lungs during this crisis. Somewhat counterintuitively, Pre-Rolls didn’t suffer this year, despite them being emblematic of the type of social smoking that’s definitely not happening nowadays. However, just as people have replaced the office happy hour with boozy Zoom sessions, maybe cannabis lovers are still celebrating digitally? We certainly hope so!
While COVID-19 is clearly affecting things, discounting also has a whole lot to do with what does and doesn’t sell on 4/20. It is, after all, a holiday known specifically for deep discounts, at least in the context of the modern cannabis industry. Concentrates are also one of the more heavily discounted items on 4/20 (and, of course, 7/10), but this year they were not nearly as attractively priced. In California, the largest adult use cannabis market, the averaged discount went down by nearly a third, from 21% to 15%. Concentrates lost a much higher proportion of its market share than Vapor Pens even, so this might suggest that price sensitivity persists, even in a pandemic.
What also persists, clearly, is the American cannabis industry itself, as it continues to provide people with two things they can’t live without right now: essential medicine and a way to recreate and relax. It’s heartening that, while Willie Nelson might not be serenading any festival attendees anytime soon (he is doing it online though!), 4/20 is still on.