HIGHLIGHTS
- Week-over-week pot sales rose at end of the month
- Retailers will benefit from being well-stocked at this time
- Average “rent week” sales in Alberta up nearly 8 per cent from prior week
Cannabis consumers are increasingly active in stores at the end of the month, around the time that many pay their bills and allocate spending money, indicating that shoppers are significantly more willing to purchase legal pot during “rent week,” data from cannabis analytics company Headset Inc. show. The company advises that retailers will benefit from being well-stocked at this time.
The bump in pot purchases around the last day of every month, when many determine how much disposable income they have left over to spend on items such as cannabis, is expected to continue, Headset said.
“Rather than tightening their purse strings, consumers seem to be more willing to shell out at the end of the month. Nearly without fail, we found that growth is often negative in weeks besides rent week, meaning that a given month’s sales numbers are essentially ‘carried’ by rent weeks.”
“It appears to be a good time to hype beverages, which fits with the narrative of people having more disposable income after all their bills have been paid."
In Alberta, average week-over-week sales grew by nearly 8 per cent in the last week of the month. This was higher than the more than 4 per cent growth in California and 6 per cent in Washington State.
“We think the rent week effect will continue independently of any discounts, as they don’t seem to make much of a difference,” Headset said.
Point-of-sales data compiled from stores in Colorado, Washington, and California in 2019 show that not only do consumers increasingly shop the last week of the month but they also spend more overall. Cannabis producers and retailers in Canada frequently look to market behaviour in more mature markets in the United States, such as Colorado and California.
“Consumers also bought more items per visit, and had higher basket totals overall. This was driven, to some extent, by discounts, but not as markedly as a big holiday like 4/20 or Christmas,” Headset said.
“For retailers, this could be a good time to push products that haven’t been moving quickly enough, or try to grow interest in some new vendors.”
November and December 2019 sales
Headset data also breaks down December 2019 sales of legal cannabis in key states and provinces. For California, December 2019 sales were up 63 per cent from December 2018, with 4.6 million purchases at an average basket size of US$56.58.
Colorado saw a 15 per cent year-over-year sales growth, with 2.3 million purchases at an average basket size of US$53.09. In Washington, year-over-year sales growth was just 5 per cent with 3.4 million purchases at an average basket size of US$27.48.
In Western Canadian provinces, there is plenty of room for sales growth as the young industry ramps up and more retailers receive licences to open stores.
Total December 2019 sales in Alberta, which has by far the most licensed cannabis stores in Canada, reached $31 million, with the average purchase at $35.90. In British Columbia, where the province has been slow to issue retail licences, total sales reached $14 million, with higher average basket sizes at $39.37.
Headset’s December figures follow November retail sales data from BDS Analytics that show smaller year-over-year growth in five major states, revealing a drop in vape sales for the second straight month as consumers responded to the so-called vape crisis.
Other categories, however, saw notable increases. Pre-roll sales in Arizona, California, Colorado, Oregon and Nevada jumped to US$52.4 million in November 2019, up 39 per cent from November 2018.