Despite a lockdown and few reasons to celebrate with over 50,000 virus-related deaths in the U.S., cannabis consumers managed to find ways to party. There were virtual events and charity fundraisers, but the industry was mostly focused on whether sales would drop if people couldn't go to outdoor parties and hang with their friends.
At first look, it seems 420 became a house party instead as deliveries jumped and sales increased despite the lockdown. Companies though noted that purchases were different from 420's in the past. Infused products and edibles looked to be winners. Perhaps with the kids at home, consumers had to opt for more discreet forms of consumption. Or it could be that since Covid-19 is a respiratory virus, consumers decided to give their lungs a break.
Either way, cannabis is looking like a true recession resistant item. Answering the long time question, is it better to have money and no pot or pot and no money? With record unemployment and stress levels high, Americans apparently needed a break from the bad news and less raucous 420 was just the thing.
"Most states showed a significant increase in sales for the week ending on 4/20 in comparison to the week prior," according to a spokesperson for Headset. "These trends show that this year, in general, the 4/20 sales boost that retailers have grown accustomed to was similar to prior years (due to being spread out across a seven-day window). Thus, rather than a large single day sales boost, retailers enjoyed elevated sales throughout the week." The company also reported that edible sales had an increase, but vape pens dropped.
Figure 1 Provided by Headset.io
The online e-commerce site known for its smoking accessories, Greenlane (GNLN) CEO Ethan Rudin said, "Not only did we see a jump, but our data suggests some compelling reasons for why this particular 4/20 was so successful for Greenlane. We saw that there has been a much higher demand for premium infusers like the LEVO II this year, 4X the amount of average daily sales leading up to 4/20. Part of this indicates that the promotions and deals put in place to drive that behavior were a success, but it also suggests that consumers this year who were sheltering in place were willing to spend a bit more on a premium product that takes up shelf space in order to infuse their own edibles safely at home."
Rudin also reported that another category that performed well were desktop vaporizers like the Volcano, which as a category saw a 40% increase in sales on 4/20. "What this tells us is that the relative portability and ease of use of hand-held vaporizers is less relevant today as consumers are not traveling and in need of a convenient device on the go." It seems that all that time spent at home has shoppers wanting to spend on pipe cleaning supplies and home good accessories which jumped 30% in sales. "Overall, our online business is thriving, with metrics having doubled compared to the weeks leading up to 4/20. This is likely due to a combination of the limitations in our ability to sell through traditional B2B and retail channels as well as increased consumer demand for cannabis accessories during lockdown."
Another company that relies on online sales is the CBD company that sells Kannaway and HempMeds. Medical Marijuana (MJNA) said it experienced a 368% surge in sales on 4/20 compared to an average of all other days in April. "Historically, 4/20 is our largest online sales day of the year, along with Black Friday. We run a number of successful promotions on this day and they seem to attract many customers," said a company spokesperson.
Being deemed an essential service in some states was the saving grace for cannabis operators. Many have added delivery options and curbside services in order to keep the sales flowing.
"This was a milestone 420 for our company," said Justin Dye, Chief Executive Officer, Schwazze (SHWZ) , which just changed its name from Medicine Man Technologies. "We were the first publicly traded company in Colorado to acquire a cannabis operator with our inaugural closing of Mesa Organics. Overall, we are pleased with the sales for 420 this year. Even amidst the Covid-19 pandemic, we saw an increase in sales year-over-year leading up to 420 and approximately 10% increase in day-of sales throughout the Mesa Organics dispensaries. Being deemed an essential business in Colorado has put cannabis even more on the forefront and, anecdotally, we believe consumers celebrated that on this 420 holiday."
Delivery Services In Demand
California-based cannabis retailer and direct-to-consumer delivery company Driven Deliveries (DRVD) said it has reached its third consecutive sales record and noted that during its 420 sales campaigns it exceeded previously set sales record by another 31%. Sal Villanueva, President of Driven Deliveries, said, "We were able to deliver the increased volume with our existing capacity and staff while maintaining our 90-minute promise to more than 92% of California." The company's brands Ganjarunner and Budee introduced its "High Roller Club" to its big-spending customers. The campaigns drove sales in excess of $100,000 in less than a 12 hour period and resulted in over 1,000 deliveries. The push also had the added benefit of bringing in new customers with more than 300 first time orders that mostly came from organic marketing efforts versus traditional advertising.