HIGHLIGHTS
- Ontario cannabis stores expected to mark grand openings on 4/20
- April 20 could become cannabis industry’s biggest marketing day
- Retailers offer 4/20 discounts to attract customers
Cannabis retailers are gearing up for what could become the industry’s biggest sales day of the year in Canada, with customers expected to stock up on supplies for the first legal 4/20 celebration on Saturday.
Limited national supplies, however, mean that stores will not meet the potential that future 4/20 sales are expected to hold. In Ontario, where per-store supplies are more plentiful due to the small number of licensed outlets, some venues are expected to use the day as a jumping off point for their grand openings.
“It is kind of the St. Paddy’s Day of the cannabis world. I could see that week always seeing elevated sales,” said Ryan Kaye, vice president of operations for Calgary retailer Four20 Premium Market.
“As it happens this year, April 19 is Good Friday so many people are off work so we believe we’ll see increased volumes the day before as well as on Saturday.”
The April 20 event called “4/20” represents a day when cannabis enthusiasts smoke pot openly in public to protest its illegal status, but this will be the first year of celebration after the Canadian government legalized it for recreational use.
“Given how this whole industry started, it was advocacy, and on the medical side it went through the courts. I think it’s an important holiday,” said Ivan Ross Vrana, national director for the cannabis space for Hill+Knowlton Strategies.
“There’s a reason to celebrate. I think businesses will develop towards that date for certain offerings or roll-outs. The stigma is going to change and we’ll see how it turns into something.”
In the United States, where some states have more mature legal markets, data is frequently eyed as a harbinger of what’s to come in Canada. U.S. cannabis sales leading up to 4/20 are forecast to reach US$1.5-billion to US$2-billion this year, up from US$1-billion in 2018, with the growing California market and new legalization in Michigan and Massachusetts, according to AdLoop.
Female millennials with a leaning toward health-specific products were viewed as the fastest growing demographic for U.S. cannabis sales. U.S. pot companies have increased their advertising expenditures targeting this group as well as mothers and senior citizens, AdLoop data showed.
“We’ve definitely been ramping up our supply. We’ve been initiating a 4/20 program, providing discounts on products we can provide discounts on,” said Mark Goliger, chief executive of National Access Cannabis (NAC).
“We expect that it will be larger than the normal ramp up for that day of the calendar but I think people have been buying product and getting ready for it for more than just a week. I don’t think it’s going to be an insane amount of different sales.”
Six months into the legalization of recreational pot, NAC is Canada’s biggest cannabis retailer by store numbers, with 23 licensed outlets operating in Alberta and Saskatchewan.
While Mr. Goliger does see cannabis demand being strong for 4/20 celebrations for years to come, he also sees pot being integrated into traditional holidays that typically spur increased alcohol consumption as product innovation and new regulations permit the sales of a wider range of products.
“Just as you celebrate with alcohol for New Year’s, people are going to celebrate with cannabis [beverages] on those days as well, so we will see increased growth leading up to those days for sales of cannabis,” he said.
Nova Cannabis will have its grand opening in Toronto on 4/20, using the renowned day to launch its first store in Ontario. There are five Nova stores in Alberta, where per-store sales potential is limited by tight supplies and relatively small weekly wholesale purchases of roughly 15 kilograms.
The Nova store in Ontario, however, was able to stock up on 100 kg of cannabis with its first purchase, with future weekly orders capped at 25 kg while national supplies remain limited.
“Compared to what we’re used to here, it was great to have a whole lot of availability,” said James Burns, chief executive of Alcanna, which operates Nova stores in Alberta.
The date has not gone unnoticed by retailers outside of the cannabis space. Pizza Pizza, for example, is offering small cheese and pepperoni pizzas all day Saturday at all locations for $4.20. In the U.S., burger chain Carl’s Jr. will be offering the “Rocky Mountain High” - a cheeseburger topped with cannabis-infused sauce - at one Denver location for $4.20.