Sunday, July 21, 2024

How Much Of A Sales Spike Will The Cannabis Industry Get This Holiday Season?

Not every part of the industry sees business heat up during the holiday season. For some, like those in cultivation and packaging, it marks a wind-down on work and profits.

By Andrew Ward

The holiday season is underway and so too are sales. The cannabis industry is no exception, with December sales expected to be strong once again.

Data firm LeafLink reports that sales jumped 33% the week leading up to Christmas 2020 (December 21-December 24) compared to the previous four weeks. Christmas Eve saw a 61% increase compared to the previous four Thursdays.

cannabis gifts
Photo by megaflopp/Getty Images

“December is a massive sales month for cannabis, with sales figures in the company of other big cannabis spending days including 4/20, Green Wednesday, and Black Friday,” said Akerna Corp CEO Jessica Billingsley, who added that December 23 and December 31 were two of the top three sales days for 2020, respectively earning $87.4 million and $89.4 million.

“While I don’t see any December holiday beating 4/20 this year, which was the largest sales day for the industry ever at $118 million, I do expect to see a couple of December days make the top 5 of the year,” she added.

A Strong December Expected As Green Wednesday Gains

History shows that 2021 should produce another strong performance for the market. If November’s Green Wednesday sales are any indication, the market could be bracing for another massive bump in sales as the gift-giving dates approach.

The early days of the month haven’t revealed much in the way of findings yet. However, returns from the Green Wednesday 2021 sales indicate that consumer demand continues to surge. LeafLink reported that sales through its site increased 10.61% in November leading up to Green Wednesday.

Cannabis delivery platform Lantern reported record days on Monday, Tuesday and Green Wednesday, noting a 44% daily increase across Michigan, Massachusetts and Colorado on Green Wednesday compared to previous days.

California-based Glass House Brands Inc. saw a 41% sales increase across its four locations compared to the previous Green Wednesday. Jushi Holdings Inc. and its retail brand Beyond/Hello saw a 120% increase on Green Wednesday compared to the year prior.

A rep for Ohio dispensary chain Terrasana told Benzinga that December is projected to be the company’s highest-grossing month for the year.

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Photos by: via Pexels; Get Budding via Unsplash

Expectations rose after the company increased revenue by 23% and transactions by 33% in November 2021 compared to the year prior.

eCommerce retailers expect sales to boom in December as well. Tyler Browne, owner of California-based online retailer To the Cloud Vapor Store said Black Friday and Cyber Monday sales traffic spikes kick off the December shopping season.

He added that December sales should be good for the entire marketplace, especially those looking to start new in 2022. “This also serves as a time for retailers to liquidate inventory ahead of the new year.”

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Most sources say that while the holiday season has several shopping days that come close to 4/20 sales figures, nothing truly compares. Overall, however, the month of December does prove more lucrative for retailers like Browne.

“While sales are great in April for 4/20, cannabis is becoming mainstream and 4/20 is losing its esteem when every day is 4/20 for most,” he said.

Holidays Aren’t The Busy Season For Every Cannabis Sector

Not every part of the industry sees business heat up during the holiday season. For some, like those in cultivation and packaging, it marks a wind-down on work and profits.

April’s harvest marks a busy time for cultivators, as does October when the new cultivars start to roll out. Once harvested, companies like Grove Bags are tasked with handling the product.

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Jeffrey Eisenstodt, Grove’s chief of staff, told Benzinga their busy season begins in the early summer, peaking in September or October. While excited for consumers during the holidays, he said the season marks a downturn in packaging demands.

“While the holiday season is a boom for cannabis purchasing, it marks the end of harvest season and brings about less packaging spending,” he said.

Eisenstodt added, “Ensuring inventory, preparing marketing, and other activities are time-consuming for operators in cannabis, and they consume the majority of their energy during the period.”

This article originally appeared on Benzinga and has been reposted with permission.


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