After posting record sales in somewhat of a weed boom in early March, cannabis sales have now slowed way down. We explore two main theories behind the fall.
For those who have had their eyes on the Daily Leaf lately, you’ll know that many dispensaries have been reporting record sales going into coronavirus sheltering. We speculated at the time that, fearful of potential dispensary closures, smokers might be stocking in up in case they need to ride out the storm without another re-up.
As social distancing guidelines have become more clear and cannabis dispensaries have, for the most part, been considered to be essential services, consumers’ concerns over widespread weed shortages may have been allayed. The loosening of OLCC norms to allow curbside delivery, reported here last week, may have also provided an assurance of continued availability.
It is in this context that we’re not too surprised by reports from Marijuana Business Daily that sales have fallen sharply from their pre-shelter peaks. Though the report only tracks data for Washington, California, and Colorado, it shows a sharp fall, from 159% of previous year sales in California in mid March in California to 9% above last years’ sales in the state at the end of the month. In Colorado, cannabis sales have fallen off their stock-up peaks to as low as 46% below previous year sales at month end.
There are two potential reasons for this sales shock. The optimistic case for the industry sees sales resuming their normal pace as the excess herb purchased when shortages were feared eventually gets smoked up. A more pessimistic take on the cannabis industry might suggest that with unprecedented unemployment and increased uncertainty, consumers are more cautious before purchasing their piff. The longer we remain away from work, the tighter personal marijuana budgets may become.
Stay safe. Wash your hands. Don’t hang out with people.
Picture Courtesy of Orange County Register