What Do Consumers Want? COVID-Era Trends Come into Focus

By Dan Mitchell
May 14, 2020

It’s probably still too early to determine all the winners and losers from the the COVID-19 lockdown. But it seems clear that overall, the pandemic hasn’t been bad for cannabis sales

If pot hadn’t been deemed “essential” by most of the states where it’s legal, the already-struggling industry would likely have been decimated, most observers agree. But what effects the pandemic and resulting economic implosion will have in the coming months remains uncertain.

Starting in early March, buying habits abruptly changed when people started hording cannabis in anticipation of possible dispensary shutdowns. Since then, patterns have varied from market to market: Sales in Washington are way up. In Nevada’s tourism-dependent market, they’re way down. 

In general, consumers are making fewer purchases, but are buying more product with each one. And they’re buying on different days than before: Rather than the usual spike just before the weekend, some markets are reporting increases toward the beginning of the week. Such is life when the concept of the “weekend,” has been rendered meaningless for a lot of people.

In March, “sales were up across all markets that we track,” Jessica Lukas, senior vice president of commercial development at cannabis data firm BDSA said on a webinar.  

Nevada was the big exception. In addition to the lack of tourists there’s  the fact that Nevada dispensaries are allowed to sell via delivery only. Sales were a little higher in Colorado in March, compared to their pre-pandemic levelts. Lukas said. Colorado’s market is more dependent on tourism than states like California and Oregon. 

BDSA tracks California, Oregon, Nevada, Maryland, Massachusetts, Illinois, Arizona, and Colorado, so their data report makes for a decent snapshot of national trends. The numbers show the new pattern: average daily transactions in those markets were down 19% in March, but the average transaction value (total sale price) was up by 23%. Still unknown, Lukas said, is whether the trend will continue, and if so, whether it will be “a net positive for the industry.”

Flower Power

Sales are up across all categories, according to BDSA. Flower, vapes, and edibles all saw increases. Perhaps the most telling trend in the report is that flower was March’s biggest gainer. That jibes with the findings of both BDSA and competitor Headset that people are seeking value. 

There had been speculation that smokable products like flower and pre-rolls might see lower sales. Some people worried about not only catching the virus by sharing joints and pipes, but also about their lung health. But the opposite seems to have happened. “Turns out, the crisis has turned people back to an old favorite: flower,” Headset said in an April report on buying habits. 

Flower continues to be the favorite option fact that sales of it are rising faster than sales of edibles or vapes is at least partly explained by the fact that people are looking for value in a way they weren’t before the pandemic. Sales of products priced under $20 per unit (or gram) “thrived” in March, according to BDSA, driven mainly by flower sales.

New shopping habits

Consumers are changing other habits, too, thanks largely to the new realities of shopping. Steve Allan, president of Caliva, a manufacturer and retailer based in San Jose, Calif., said shoppers have “done a complete 180 in behavior.” 

Before the pandemic, about two-thirds of Caliva’s retail customers made their purchases in stores and the other third ordered deliveries. The situation has reversed. Now, 80% of Cali va’s customerspurchases are buying online, whether for delivery or pickup. . Other retailers are reporting similar trends. 

The implications are “monumental,” Allan said. “We believe the shift is permanent…there will still be concern and trepidation out there” at least until there’s a vaccine for Covid-19, which likely won’t come for a year or more. By then, the habits will be ingrained. 

That means people will be relying more on web sites than budtenders for product information and advice. For manufacturers and distributors, that means a whole new approach will be necessary. The question for Wana Brands, a leading marker of edibles , is “how do we become top of mind for the consumer if they’re not in the store?” Chief Marketing Officer Joe Hodas said. “Previously, so much of our focus was B2B.” That is, they focuses on pitching retailers and working with budtenders.

The company began working with the online platform Jane Technologies before the pandemic struck. That relationship is now proving crucial. Customers buy through Wana’s own web site, and Jane’s web site ports them to their local dispensary to complete the transaction. “We’re now actually driving traffic to the dispensaries” rather than the other way around, Hodas said. 

Another major shift Allan said will have industry-wide implications: “People aren’t trying many new products,” he said. “They’re going with the tried-and-true.” That’s partly because people are ordering online far more than they had been, without the benefit of a budtender’s recommendations. Well-known companies like Wana might be able to expand their product portfolios, but, Allan said, “it’s a tough market for new brands to establish themselves.”