A new analysis sees Q4 becoming as important for cannabis as it is for traditional retail
While “holiday” sales typically come in April for the cannabis industry, retailers should not overlook the fourth quarter and the traditional holiday season, according to a new analysis from advertising platform Surfside.
“Consumers are in a buying mindset during the holidays — you just have to show them the right offer,” reads “The Season of Green 2022: Cannabis Holiday Sales Trends and Strategies,” which analyzed millions of cannabis transactions from October through December 2021, focusing on consumer purchasing trends from last year for Halloween, Green Wednesday and the weeks leading up to New Year’s Eve.
According to the report, consumers are likely to buy cannabis before each holiday and that December sales outperform other months, with another increase in buying over the last two weeks of the year.
Surfside co-founder and co-CEO Jon Lowen says he thinks fourth quarter sales will start “leveling the playing field” with other times of the year that have traditionally been top-selling months.
“I think it’s going to start rivaling the 4/20s and the summer months,” he says.
Lowen says the uptick begins on the Friday before Halloween weekend, which in 2021 saw a 48% increase in sales with a 66% relative increase in edibles sales compared to other October weekends, and continues through Thanksgiving, Christmas and New Year.
“You’re also seeing peaks on Green Wednesday, which is the Wednesday before Thanksgiving. On Black Friday you’re seeing another peak, along with Christmas Eve and New Year’s Eve,” he says. “So it’s already aligning to what you’d see standard from a buying habit.”
‘Indoor friendly’ products
According to the report, Green Wednesday sees a 72% increase in sales over the rest of the month while Black Friday’s numbers are up 62%. Lowen says the time off and travel — including friends or relatives who may be visiting a legal state — factor into the numbers, as well as the products that are bought, to create what the report calls the “Get-Together Effect.”
He says “indoor friendly” and “discreet” products, such as vapes and edibles, see an increase in the holiday sales numbers.
“You have increase in visitation to a lot of these markets, a lot of movement and travel, and that brings new consumers into the space,” Lowen says. “We think that as far as where the industry needs to go, definitely going and finding the people who have yet to consume or purchase legally is the big opportunity for expansion.”
Lowen says there is additional opportunity at the end of November during what has become known as “Cyber Monday,” an internet-focused shopping day on the Monday after Thanksgiving weekend. Cannabis sales drop by nearly 2% on that day, according to Surfside’s analysis, creating what Lowen sees as a hidden opportunity, particularly for online sales and delivery services.
“A lot of other online retailers are running longer promotions and big promotions on that day,” he says. “We tend to find that that’s not the case in the cannabis right now. I think there might be opportunity for some key retailers there to take advantage.”
Of the three holiday months analyzed, Surfside found December to be the biggest in the quarter for sales, pulling in 10% more revenue in 2021 than the previous two months. In addition, the final two weeks of the month, which include a Christmas vacation and a focus on leisure for many, see a 29% sales increase over the first two.
“The second half of December has so many sales days and so many holiday events around Christmas,” Lowen says. “What we tend to find is that people are stocking up and really purchasing, whether they’re going on vacation or they’re going to be home and inside for a long period of time, or have to be spending time with family or social gathering.”
December 23 sees the highest relative increase, with sales up 56% over average, but sales are also 40% over average on Christmas Eve. Discreet products again see huge spikes around Christmas, with a 63% increase in vapes and a 64% increase in edibles on December 23, compared to monthly averages.
Just a week later, for New Year’s Eve, sales spike again, up 54% as people once again head to celebrations.
Lowen says the best way for retailers to capitalize on these sales trends is to begin planning their marketing campaigns now, whether it be to try and capitalize on new shoppers in town for the holidays or on regular customers looking to stock up — while keeping in mind the popularity of vapes and edibles during this time.
“There’s a lot of cool targeting and audience techniques that can be used in order to find really relevant people who are living or working or spending time near your retail store,” he says.