Green Rush: Cannabis sales are expected to surge 25% over Memorial Day weekend and demand will reach unprecedented levels over the summer.
The Washington Post via Getty ImagesBen Kovler, the founder and chief executive of Chicago-based Green Thumb Industries, a cannabis company with operations across 12 states, is getting ready to sell more weed than ever this summer.
On Wednesday, Kovler held a ribbon cutting after expanding capacity at GTI’s 250,000-square-foot production facility in Oglesby, Illinois, where his company grows high-end cannabis flower, produces pre-rolled joints, manufactures THC-infused edibles, and runs a cannabis beverage line. Right before Memorial Day weekend, as Covid-19 restrictions around the country ease and nearly half of Americans are now vaccinated, Kovler says GTI is focused on its goal to produce as much as product as possible to keep up with what will be a summer-long surge of demand.
“The Roaring Twenties is on,” says Kovler. “It’s unprecedented demand and we’re making supply—nothing fancy from us.”
Throughout the pandemic, the cannabis industry saw record levels of consumption. Americans bought $17.5 billion worth of marijuana in 2020, a 46% increase from 2019, and annual legal sales will reach $41 billion by 2025, according to Cowen. Yet, now that the economy is opening back up another demand surge is hitting the cannabis industry. “People also want to consume during high-energy good times—it’s a tidal wave of demand,” says Kovler. “The sun is out, people are seeing friends they haven’t seen for a long time coming out of the pandemic. Cannabis is evolving the American experience.”
According to a new report published by BDSA, a cannabis sales tracking and analytics firm, dispensaries across the U.S. will see “blockbuster sales” during Memorial Day weekend, which will be the start to a sales record-breaking summer. In mature markets like Colorado, which launched legal sales in 2014, holiday sales are expected to jump 25% over last year and more than 30% in newer adult-use markets like Illinois, BDSA says.
“We’re expecting this weekend to kick off an unprecedented summer of cannabis sales across markets,” says Jessica Lukas, a senior vice president at BDSA. “We’re going to see increased consumption as more people are vaccinated and ready to have a good time.”
The combination of the pandemic and the addition of new state-legal cannabis markets created a shift in America—more Americans use marijuana more frequently. “It’s become a new habit,” says Lukas. Already, more people across the U.S. are consuming marijuana this year than in 2020. About 43% of Americans in states where adult-use is legal are now using marijuana, up from 36% last year, BDSA data shows. In states like California, 45% of residents use cannabis, up from 33% in 2020. Similar trends can be seen in Massachusetts, Florida, and other states with legal programs.
When it comes to frequency, 67% of consumers who smoke or vape cannabis now consume daily. For people who prefer edibles, a form factor that helped many Americans weather the stresses of lockdown, 50% of those consumers pop gummies daily, BDSA has found.
Americans are excited to get out of the house, but cannabis delivery companies are expecting a continued surge in business. Khaled Naim, the CEO and co-founder of Onfleet, a San Francisco-based delivery management software company that powers tens of thousands of cannabis deliveries every day, says order volume has not softened.
“I expect this to be the biggest summer yet for cannabis, and other segments like alcohol,” says Naim. “Our volumes continue to grow: May will be our biggest month ever.”
Naim says consumer adoption of delivery surged during the pandemic and he now expects up to 90% of that new business to remain. “People are now used to the convenience of delivery,” he says. Cannabis order volume is already up 25% to 30% this year over 2020, says Naim.
At Doobie Nights, an experiential dispensary in Santa Rosa, California, co-founder Damon Crain is on a buying frenzy in anticipation of strong summer sales.
“We’re stocked,” says Crain. Last summer, it was hard to find flower due to increased demand and the scarcity created by the time between the late spring and fall outdoor cannabis harvests. “We’re buying as much flower as possible to prepare for the season.”
It seems like everyone is trying to have fun this summer. But Kovler says it’ll be “boring” at GTI, where he says they expect to spend significantly more than $100 million building new production facilities and ramp up new states like New York and Virginia.
“It’s not a crazy summer inside GTI—for us, it’s the summer of execution,” he says. “It’s an unsexy story.”
