What cannabis retailers and consumers need to know before dispensary doors open on 4/20
By Daniel Pearlstein, EVP Strategy, Canopy Rivers Inc.
April 20 (4/20) has long been considered a festive occasion in cannabis culture. Not only is it a day of celebration, but it shows how consumers respond to different product mixes and demonstrates how retailers adjust their pricing strategies to keep pace with spikes in demand. What can the cannabis industry expect to see on 4/20 now that recreational use is legalized in more jurisdictions?
Headset, a key data analytics investment within the Canopy Rivers portfolio, and Nielsen, a multi-billion-dollar global information and measurement company, published a report with insights and predictions for this year’s 4/20 based on four years of data collected from participating retailers in the U.S.
Several observations from Headset and Nielsen’s robust 4/20 report will help cannabis operators stay ahead of the curve and help consumers make smarter, data-driven purchases. Let’s dive in.
4/20 continues to be a big deal for cannabis retailers and consumers
Point-of-sale data from participating cannabis retailers in mature markets, specifically those in Washington, California, Nevada, and Colorado experienced more than 100% of an increase in sales on 4/20 compared to the same days of the week within a two-month timeframe. Like Black Friday and other deal-finding days of the year, the data shows that consumers are flocking to cannabis retailers on 4/20.
Importantly, there is also a pricing discount that is associated with 4/20. Retailers have responded to the anticipated increase in customers by offering deals to attract more business. Headset and Nielsen saw that generally, the average discount for items sold at participating cannabis retailers ranges between 10% and 18%.
4/20 marketing insights for cannabis retailers
The products sold on 4/20 are less medicinal according to Headset and Nielsen’s analysis. Unique pre-rolls, strains, or high-end concentrates are more likely to resonate with consumers on 4/20 than other times in the year. Health & wellness-related items, such as tinctures or capsules, are less likely to see a spike in sales around 4/20.
The report shows that cannabis sales normally spike on Fridays, which makes sense as consumers might typically purchase cannabis for consumption on the weekend. Canadian retailers would be wise to start promotions earlier during the week to capture the attention of consumers that might be willing to purchase a little bit more cannabis at this time of the year.
Lessons for cannabis retailers in Canada
For Canadian cannabis retailers, many of the same conclusions can be drawn from Headset’s data. Pay attention to the brands and form factors that fly off the shelves on 4/20. This information will be indicative about the purchasing habits Canadians might have when new regulations are expected to come into force in October later this year, allowing for consumers to purchase products that are already available in mature U.S. markets.
Retailers should ensure that their shelves are stocked, have a pricing strategy in mind, and confirm that producers are able to supply products they want to highlight. Good customer service is especially important, as it demonstrates that Canada’s cannabis industry is progressing in the right direction.
Headset is an excellent addition to the Canopy Rivers portfolio, and will be a key contributor to data-driven insights needed to facilitate synergies within the ecosystem. The company has an experienced and accomplished team and its product has widespread adoption in key U.S. markets. Canopy Rivers is working with Headset and other strategic partners to help the company extend its operations in Canada – the first legal, federally-regulated cannabis jurisdiction in the world. We’re excited for Canopy Rivers and Headset to collaborate as legalization unfolds across the country, and beyond.