This year 4/20 celebrations looked significantly different as COVID-19 regulations forced the cancelation of public gatherings and prevented friends from socializing together. Instead, we saw online seminars, digital concerts and Zoom socials. The pandemic outbreak and the distancing guidelines that followed had a clear impact on cannabis sales in 2020 compared to 2019, but we decided to dig deeper into our data to analyze the details to see how the cannabis market fared this year.
In our review, we saw top line sales decrease across the U.S. market while average item prices increased or remained flat. The graph above shows total U.S. market sales (California, Colorado, Nevada, Oregon and Washington) on 4/20 decreased 22% compared to 2019, from around $40M to $32M. Every U.S. market experienced a decrease in total sales on 4/20 compared to last year, with Nevada getting hit the hardest with a 64% drop. California, the largest cannabis market in the U.S., was the least affected with only a 3% decrease in sales on 4/20.
Blame it on tighter wallets, social distancing protocols or one of the many other cultural shifts we’re experiencing with COVID-19. It could also be a matter of timing. This year 4/20 fell on a Monday - just at the start of the work week. In contrast, last year 4/20 was on a Saturday, a much more popular and convenient day to celebrate.
The news isn’t all bad though. Sales in the previous week leading up to 4/20 were actually higher than in 2019 - almost double on 4/15 and 4/17. We saw the typical spike in sales on the day of 4/20, albeit not as large of a lift as other years. This loss was negated by the higher sales spread out in the days leading up to 4/20. Between 4/13 and 4/18, there was an average increase of 41.8% in total sales. This may be due to consumers stockpiling ahead of 4/20, fearing shortages. Or perhaps people thought there would be crowds and shopped early. Regardless, there was a noticeable uptick and it was uplifting to see the cannabis community’s loyalty to the celebratory day, despite the struggles of a pandemic.
Looking at the average item prices year-over-year, most people spent more items with price increases and others with decreases in 2020. Beverage prices decreased by 14% while concentrates prices increased 17%, flower increased 24% and pre-rolls increased 18%. Topicals also significantly decreased in price while vapor pens stayed relatively stable.
Higher demand for flower and a feared shortage of supply due to COVID-19 disrupting some supply chains most likely had some influence. However, the largest contributor to the price increase is the spike in wholesale flower prices from 2019.
Due to high discounts on 4/20, prices across all product categories did decrease compared to 4/13, the prior Monday. Dispensaries offer 4/20 discounts every year, but this year may have seen sharper discounts to draw in customers during a time when some are tight on spending income.
COVID-19 clearly altered the 4/20 trends we were expecting to see this year. Sales on 4/20 were down for the day, but significantly higher in the days leading up to the holiday. Despite COVID-19, cannabis consumers still had much to celebrate with the various online parties and found ways to purchase supplies to partake.