How did April 20th, “4/20” become the unofficial national holiday for smoking weed? Did it start with high school kids who said they’d meet in the parking lot after school at 4:20pm to get high? Was it the California penal code rule number related to marijuana? The radio code used by police reporting a drug deal? These are the myths and urban legends of the origin of 4/20, but the new economic effect is very real.
Entrepreneurs across the value chain are getting ready for a busy day of purchases this April 20th. “420 is to the Marijuana industry, what Valentine’s Day is to the flower/rose business,” said Greg James, publisher of Marijuana Venture and SunGrower and Greenhouse, business magazines aimed at the industry.
Jeremy Jacobs, co-Founder of Eyechronic, a dispensary technology company that provides advertising and tools to the cannabis industry, said his traffic analytics tools “show that our partners are seeing as much as 10 times more consumers on 4/20 than the average day and they expect that this year’s 4/20 will generate more traffic than ever.”
It will be a big day in an already flourishing industry. Washington and Colorado sell about one billion dollars worth of legal cannabis per year and California expects to sell six billion dollars of weed in the first twelve months that recreational sales are fully implemented. With a host of other states also allowing marijuana sales, job growth and new tax revenues are getting pretty hard to ignore.
Many retailers are booming, and “the smart ones” are getting better at targeting the consumers they want to attract said James. “Some stores are pursuing a Costco type of strategy based on big volume and low margins, while others are targeting higher end connoisseurs,” he said.
Sally Vander Veer, President of Medicine Man, a dispensary and cultivation consulting company in Denver offers a few tips for cannabis businesses trying to meet the 4/20 rush. It’s important to be fully staffed to handle the lines she said—not just for 4/20, but for days leading up to and through the weekend. Security personnel need to know how to control crowds and maintain compliance in a friendly way. Nuts and bolts operational issues like having plenty of inventory and plenty of cash on hand to make change are also critical to a smooth experience for the retailers and customers.
4/20 also provides a natural opportunity for businesses to create promotions for their customers and partnerships with other local businesses, said Vander Veer. Medicine Man will be placing “Golden Tickets” in Westword, a local Denver magazine, that customers can redeem for in-store discounts on all types of products.
Peter Barsoom, creator of edible brand 1906, a line of marijuana-infused chocolates, said his company is increasing inventory in preparation for 4/20, and hopes to attract new customers. “4/20 tends to be a heavy flower holiday — not so much for edibles” he said. Barsoom is hoping to buck that trend with edibles that take effect in about 15-20 minutes. Consumers want effects which are predictable, consistent and fast acting he said. The company is planning to create vendor popups and will send employees to various dispensaries throughout Boulder and Denver.
4/20 looks to grow even further as states continue to loosen marijuana restrictions. New Jersey, which recently allowed medical marijuana is considering recreational use. Sales could be $850 million in 2019, spurred partially by the fact that nearby states currently only allow medical marijuana. This sales prediction comes despite laws making it illegal to transport marijuana across state lines. If the bills pass into law, current medical marijuana dispensaries could start selling adult-use marijuana within 180 days according to Steve Schain, Chair of cannabis law firm Hoban Law Group‘s New Jersey practice.