Missouri dispensaries are navigating the first holiday season with legal recreational sales, and business owners expect there to be an uptick in sales despite a state-wide decline in monthly revenue.
Since the initiation of recreational-use cannabis sales in February, the industry has averaged $117.8 million overall sales per month. In November, combined medical and recreational-use cannabis sales amounted to $112.7 million, reflecting an ongoing decrease in sales since the summer.
As temperatures drop and people are staying home, many aren’t purchasing as many cannabis products, said Nicholas Rinella, CEO of Hippos Marijuana Dispensaries.
But as the holidays roll around, cannabis sales should increase, said Robin Goldstein, the director of the Cannabis Economics Group at the University of California.
As employees take time off for the holidays, Goldstein said people will have more time to relax at home and in turn, drive cannabis sales up.
The Valley, a dispensary in Farmington, has seen an increase in sales the past several weeks, said part-owner and registered pharmacist, Dan Freund.
Hippos Dispensary offered a sale the day before Thanksgiving on what’s known as “Green Wednesday.” The annual cannabis holiday has gained popularity as people return home to states where recreational cannabis use is legal and special occasion shoppers contribute to the heightened sales.
“Green Wednesday is traditionally one of the biggest days for the sales in the cannabis space and that was no different in the state of Missouri,” Rinella said.
Across Hippos’ three dispensary locations in Springfield, Columbia and Chesterfield, Rinella said the cannabis holiday brought in the second largest day of the year in traffic and sales, behind only the cannabis holiday 4/20.
Attracting customers
To attract customers this month, Hippos has launched a 12-day promotion that includes special deals on certain products leading up to Dec. 25.
“We make sure that we have a large variety for our customers because we know there's people that are going to be traveling from out of town,” Rinella said.
The Valley hosted a toy drive, where if customers brought in a packaged toy worth $15 or more, they were offered an eighth of an ounce for one penny on select brands. Freund said they had to cut the five-day drive short after two days because they were running out of product for that price point.
“We didn't know what type of response we were gonna get, and then it got to be more than we anticipated,” Freund said. “We were very, very happy with the success of it.”
The dispensary collected over 400 toys for organizations throughout the state. Freund said The Valley plans on hosting another toy drive next year.
Goldstein said one of the best ways for legal cannabis businesses to compete with the illegal market is to incorporate nice-looking packaging that would entice a customer to gift the items.
“That's their (dispensaries’) competitive advantage in the holiday season, nice looking stuff and nice looking products,” Goldstein said.
In Missouri, Rinella said the packaging regulations are so stringent, that it is difficult to get a product in a new package just for one particular season. According to a final rule that went into effect on July 30, the Division of Cannabis Regulation must “review and approve all final marijuana product designs, packaging designs and label designs prior to use.”
“It takes us somewhere around 60 days to get a package approved. It takes us probably another 100 plus days to get a product developed, that would be on the fast end,” Rinella said. “And then we have to order it for the packaging which usually takes anywhere from three to six months.”
Looking ahead
After the holiday season comes to a close, Rinella expects some customers who are taking part in dry January and consuming no alcohol to instead choose marijuana gummies, slightly lifting cannabis sales. He thinks the following months will produce slow sales until April for 4/20.
“That'll be really the kickoff to the cannabis season again,” Rinella said. “That's why you see those trends. They do become predictable.”
After a strong year of recreational sales in Missouri’s growing cannabis market, Freund expects the market to continue to cool down.
“This isn't really a new industry. We're still growing quite a bit, but the penny is not as shiny as it was a couple of years ago,” Freund said.
However, Goldstein said that dispensaries should be prepared for anything. “Cannabis sales are very unpredictable and you can't expect any pattern to repeat itself every year,” Goldstein said.
This story was originally published by the Missouri Business Alert, a fellow member of the KC Media Collective.
