LATEST ALERTS
The answer is not quite clear. A lot of companies reported no drop or even increases in sales compared to the previous year. There could be several reasons for this. Firstly, all cannabinoid-related products are still part of a growing industry. Increases from a low base are not surprising and it is difficult to calculate if increases would have been bigger in a non-affected year.
This is also due to the confusing nature of the sales of CBD and other cannabis products. Cannabis itself was labelled an essential business in many US states – meaning it was not as affected by forced closures as pure CBD companies. For those, the complicated nature of the numerous retail channels most used made it difficult to establish just how much was lost to various closure of businesses deemed non-essential.
Those with a large or expanding online presence most likely suffered less or even saw increases in online sales cover losses through other means. Meanwhile, a number of companies said they used the entire month of April to hold online 4/20 sales this year as it was 2020.
For the companies that did report smaller 4/20 weekend sales compared to previous years, businesses could of course be more reliant on bricks-and-mortar sales through channels deemed to be non-essential in many jurisdictions. But reports from online service providers showed depressed sales even through e-commerce channels. Meanwhile, one Canadian cannabis firm had an unexpectedly high result from the weekend that was primarily driven by its brick-and-mortar outlets.
There are potential reasons for mixed results beyond social distancing tamping down appetite or driving sales to online providers. Such businesses could of course be starting from a more established position – meaning year-on-year general sector growth had less of an impact. The 20th falling on a Monday instead of a Saturday may also have played a role.
Feel free to submit your questions for our next blog post*
*Under CBD-Intel’s editorial discretion
