Maximizing 4/20 Success: Insights and Strategies for Cannabis Retailers and Brands

BDSA insights empower retailers to apply strategic discounts and deploy brand merchandising, enhancing 4/20 success.

Key Takeaways:

With 4/20 landing on a Saturday in 2024, retailers have a prime opportunity to capture increased foot traffic and sales, making it important to align promotions and stock with anticipated consumer demand.
Historical sales data, particularly from 2023, reveals that products like solventless extracts and culinary edibles significantly outperform others during 4/20, suggesting a targeted approach to inventory and promotions.
Strategic discounting based on consumer preferences and past sales performance can enhance profitability while meeting customer expectations for deals and discounts.
Introducing limited, branded 4/20 merchandise serves as a dual strategy, immediately boosting sales and promoting long-term brand visibility and loyalty among consumers.
Tailoring discount strategies and product offerings to local market trends and consumer behaviors, as shown in BDSA’s geographical sales data, can further optimize 4/20 success and profitability for retailers.

4/20 represents a pivotal moment for everyone on the consumer-facing side of the cannabis industry. But success on the biggest holiday for legal cannabis is not merely about discounts. Instead, a targeted approach to consumer engagement, pricing, and assortment along with distinct, branded merchandise on this day can cultivate long-term customer allegiance and maximize holiday sales.

Armed with our insights, BDSA is poised to transform the 4/20 narrative. Our goal extends beyond a temporary surge in transactions—we’re here to empower brands and retailers with the data and strategies needed to elevate the consumer experience and secure a competitive edge.

How We Got Here: The 2023 Cannabis Industry

In 2023, the cannabis industry was full of both challenges and opportunities. Price pressures and a tightening financial environment loomed like early frosts, threatening the season’s yield. Yet, as 4/20 approached, a different story began to unfold, one where resilience turned constraint into creativity, and adaptation unlocked unexpected potential.

April 20, 2023, served as a litmus test for the industry’s strategies under these conditions. BDSA Retail Sales Tracking data revealed the results: Sales surged, with incremental daily cannabis sales during the week of the holiday climbing +29% above the norm for non-holiday weeks, while equivalent average retail prices dipped -5.5% lower than those non-holiday periods. This is clearly a testament to the industry’s capacity to attract and satisfy consumer demand under pressure—achieving a higher sales lift than the preceding year (+29% in 2023 vs. +23% in 2022), despite a more conservative approach to discounting (-5.5% in 2023 vs. -7.5% in 2022).

And as the world stepped further away from the shadow of the pandemic, a resurgence of social consumption emerged like spring after a long winter. Celebrations and special events once again welcomed cannabis as an honored guest, with 51% of consumers in Fall 2023 incorporating cannabis into their festive events—a +34% increase over Fall 2021.

Sparking Insights To Hit It Big On 4/20

This year, 4/20 lands on a Saturday, setting the stage for what could be the most lucrative day of the year for cannabis retailers. This isn’t just any Saturday—it’s a golden opportunity for those ready to seize it. As we edge closer to 4/20 in 2024, it’s crucial to craft a strategy that resonates with consumers, but also maximizes profit without diluting the brand’s value through excessive discounts. Here, the recipe for success is a leaning on product purchasing history, understanding your own local 420 dynamics, and utilizing discounting and promotions in a targeted fashion rather than broadly.

Harnessing the Power of Saturday Sales

The significance of 4/20 falling on a Saturday cannot be overstated. Historically, Saturdays are when consumers explore, indulge, and shop for cannabis, with BDSA data showing that average daily sales on Saturdays in 2023 were +14% higher than the average for all days of the week. For retailers, this day offers a canvas to craft an unforgettable shopping experience. But success requires more than just opening your doors; it demands strategy.

Optimizing Product Selection and Promotions for 4/20

Past 4/20 promotions are treasure maps to this year’s success. They reveal not just what consumers bought, but how they interacted with promotions and pricing strategies.

Identify Your Stars: Last year, certain products shone brighter than others. Solventless extracts and culinary edibles, for instance, skyrocketed, with sales increasing by +48% and +70%, respectively. Despite topicals accounting for a modest 0.5% of total dollar sales, their expected surge around 4/20 highlights an opportunity for retailers to differentiate and capture additional market share. Don’t just stock up—strategically aligning your inventory and promotions with proven consumer demand.

Targeted Promotions: Imagine tailoring your offers so precisely that they feel personalized. This year, zero in on the products that history shows your customers will flock to. It’s about creating a magnetic pull that draws them towards the products they already love and are excited to discover at a value they can’t resist.

Limited, Branded Merchandise

In the midst of the day’s hustle, there’s a potent tool at your disposal: 4/20-themed merchandise. Data from 2023 show that some merchandise gets a big boost at retail around 4/20, with incremental daily sales of apparel on the week of 4/20 totaling +56% higher than non-holiday weeks in April 2023, even when the subcategory was discounted -22% that week. Offering limited-edition merchandise can be a strong tool that embeds your brand into the 4/20 narrative while giving a nice boost to basket size and total volume at retail.

Transform Customers into Advocates: Each item sold becomes a walking billboard, a conversation starter, and a reminder of the experience your brand offers. It’s a strategy that extends the reach of your 4/20 success far beyond a single day.

Navigating Regulatory Landscapes and Local Preferences

While 2023 didn’t bring any seismic regulatory shifts affecting 4/20 directly, it did shed light on geographic nuances in consumer behavior and sales patterns. For instance, states like Arizona, California, Florida, Maryland, New York, and Pennsylvania not only celebrated 4/20 with enthusiasm, but also demonstrated significant sales increases, with the smallest bump being a +30% rise in Arizona and the largest, a +40% leap in Florida. 

Yet, alongside these spikes came notable price reductions. The takeaway here is nuanced: discounting is anticipated by many consumers and can drive traffic, but there’s a fine line between attracting consumers and eroding your margins.

Action Steps for Retailers:

Tailor Your Discounts: Consider the balance between enticing offers and maintaining profitability. Look at last year’s data from your area to gauge how deep discounts can go before they start cutting into profits. A look at discounting within the topical category in 2023 demonstrates this. Infused lubricant products saw some of the steepest discounts around 4/20 last year, with average retail prices for the week coming in -49% lower than non-holiday weeks, but this small category saw just a +0.25% boost in sales. 

Understand Your Market: Dive into local sales trends to understand what drives your consumers. A one-size-fits-all approach to promotions might not work across different states or even cities.

Embracing Product Innovation and Trends

On the product front, innovation continues to be a key driver of interest and sales. Infused pre-rolls and topicals, in particular, have captured consumers’ imaginations and wallets. 

Strategies to Consider:

Cross-Promotions: For customers interested in topicals, consider bundling them with edible products. Not only does this offer value, but it also encourages larger basket sizes. BDSA’s Basket Analytics suggests that nearly half of the consumers purchasing topicals are also picking up edibles, indicating a ripe opportunity for cross-category promotions.
Spotlight Innovation: Make innovative products like infused pre-rolls and novel disposable vape products the stars of your 4/20 promotions. Highlighting these items draws in consumers looking for the latest in cannabis consumption and elevates the shopping experience by offering something unique.
Educate Your Customers: Use social media, email campaigns, and in-store signage to educate consumers about the benefits and features of innovative products. This is especially true for high ticket items like topicals, or products containing minor cannabinoids.
Create Experiences: Consider hosting in-store events or online webinars leading up to 4/20 to showcase these products, providing hands-on experiences where possible.

Consumer Behavior Shifts and Preferences

As for consumer preferences within the cannabis market in 2023, a striking 36% of U.S. consumers point to low price as their guiding star for retailer selection, marking a +4% increase from two years prior. This signals a clear message to retailers about the evolving priorities of their customer base. 

Beyond the total market shift, clear audience distinctions emerge, shaping the direction for retail strategies and the need for audience-specific strategies.. For example, those who prefer inhalable cannabis products, price stands out as the leading factor, with 38% of this group pointing to affordability as the top driver of their retailer choice. 

Contrasting this, consumers who prefer edibles seem to navigate their choices with an eye towards convenience. The proximity and accessibility of a store emerge as primary concerns for this segment, suggesting a different set of priorities that retailers must consider. This divergence in consumer behavior emphasizes the need for a flexible approach in marketing and sales strategies, ensuring that promotions and store placements resonate with the unique preferences of each customer group.

Topical cannabis products occupy a distinct niche, and where trustworthiness in the retailer becomes paramount for the topical consumer. This emphasis on reliability and credibility points towards a deeper, perhaps more personal set of criteria guiding purchasing decisions. For retailers, this underscores the potential to cultivate loyalty and repeat business through a focus on transparency, consistent quality, and exceptional service. This is especially true for retailers catering to medical consumers who are more likely to consume and prefer topical products.

Balancing Discounts and Value for 4/20 Success

Wrapping up our examination of 4/20 in the cannabis consumer space, it’s clear that success lies in data-informed strategies paired with inventive promotions. BDSA’s insights provide the groundwork for these strategies, acting as both a guide and an inspiration for thoughtful planning. The essence of a winning 4/20 approach lies in the careful calibration of attractive discounts with genuine value.

Strategic Discounting: It’s not about slashing prices across the board; it’s about precision. By identifying high-demand products and tailoring discounts to these items, retailers can drive traffic and sales without compromising their bottom line. 

Creative Promotions and Branded Merchandise: Beyond the allure of discounts exists the untapped potential of storytelling through products. Limited, branded merchandise represents a narrative thread that weaves your brand into the fabric of your customers’ 4/20 experience. 

The Value of Long-term Brand Loyalty: Immediate sales are just the tip of the iceberg. The true measure of 4/20 success is the lasting connection forged between your brand and its customers. Consider the experience consumers have on 420 and how your retail presence or brand can be a part of that experience. This approach cultivates a community of loyal patrons who see your brand as an integral part of their cannabis journey.

The blueprint for 4/20 success is multi-faceted, blending retail savvy with the science of data-driven decision-making. This sets the stage for a 4/20 that benefits both your profit margins and your brand’s legacy. Let this 4/20 be the moment your retail strategy blossoms, rooted in insight, and blooming with innovation.

Dive deeper into the data-driven strategies that can transform your 4/20 planning from standard to stand out. Connect with us for personalized insights and expert advice calibrated to your unique retail needs.