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Thanksgiving and the Cannabis Industry
2020 was without a doubt a year for the books. With the pandemic changing every aspect of normalcy, every business was impacted whether it was good or bad. During the 2020 Thanksgiving weekend, cannabis sales saw record highs.
Many users have expressed an increase in use of cannabis products during the pandemic to help with overall health including mental health. In 2020, total cannabis sales were around $238 million during the Thanksgiving weekend alone which was nearly 14 percent above 2019’s Thanksgiving numbers. The industry has not seen sales peak that high on any given Thanksgiving weekend, and cannabis sales continue to skyrocket.
Experts anticipate seeing sales hit new highs as Thanksgiving approaches this year.With controversial talk over the vaccine, increased pandemic anxiety, and overall health questions, many people are turning to cannabis for help.
Since 2020, there have been major turns in the cannabis industry with new states opening their recreational markets as well as some states increasing their medical cannabis markets. Many more cannabis dispensaries have opened their doors, and we continue to see many more even in the past week.
As people thaw their turkeys, spend time with family and dispensaries gear up for Thanksgiving and Black Friday deals, we are going to see a huge spike in the market over the next week.
Ensure your dispensary is prepared to handle increased cash on hand, loss of inventory, cash flow management, returns, and taxes on all gross receipts. CBS and Co. can help with all of your dispensaries needs to ensure ease into this holiday season for your dispensary.
How much of a Discount Should Your Dispensary Offer on Black Friday?
Black Friday is one of the largest Holidays for retailers which includes cannabis dispensaries. Black Friday is known for the anticipation and door busting deals that customers cannot get throughout the year and many cannabis dispensaries have over the years begun to take advantage of the plethora of shoppers by offering the best deals on this day. There is also small business Saturday, which is the day after Black Friday for the smaller Mom and Pop dispensaries. One of the biggest mistakes that a dispensary can make in preparing to offer door busting deals is not taking a look at the inventory aging report. This can help you determine what you can give the biggest discounts to, and how long inventory has been sitting.
Before deciding what kind of deals to offer to your cannabis shoppers, your company must ensure that:
- A low discount can be afforded
- Older inventory must go
First, an inventory aging report will show you the length of time your inventory has been sitting. Black Friday is a great time to get rid of unsold inventory and increase profit of inventory that has been otherwise sitting. Bundling some of the unsold inventory with a better selling product can be a great way to increase sales. This can mean including it in a Buy one Get one Deal.
For discounts, the best strategy is to begin with your loyalty members. Offer better deals to customers that are a part of your mailing list or loyalty programs. This will not only increase customer retention, but can give people an incentive to join your programs. Customers that receive loyalty discounts tend to feel more valued which is great for getting them to return.
Another great strategy is to offer Buy one Get one deals or volume discounts. Volume discounts can be offering larger discounts for customers that purchase 2 or more packs of rolling paper. Be careful with volume discounts on cannabis as each customer’s limit on medical or recreational cannabis purchases differs from state to state. For some states customers are limited to 3 ounces every 30 days. So when offering volume discounts, it is best to offer it on accessories such as rolling paper or tobacco pipes.
In discounting the general rule of thumb is to start smaller and increase gradually. The best starting point is between 10-20% but on Black Friday customers can be looking for larger discounts so it is best to look at what your dispensary can afford specifically as it is not a one size fits all. It is best to talk to an accountant to see what your business can afford to do. If you do not have an inventory aging report implemented, CBS & Co. can help set it up and assess your inventory to see what you can afford to do on Black Friday. In most cases, once we see the businesses financials, we can see your most profitable days, and help implement reports that can help you set up weekly deals that help increase profits over time even past Black Friday. It is best to assess inventory weekly. To ensure the maximum sales and profit.
Reach out to CBS & Co. for help on your businesses financials before Black Friday.
Cannabis Comes to Your Coffee and Candy—But Is It Legal?
CBD comes in your coffee and candy but is it legal?
Link to story: https://on.wsj.com/2NuxiUO
Canna Business Solutions at MJ Biz Conference & Expo at Gaylord National Harbor Hotel
Please stop by and see us at Booth 239 at the upcoming MJ Biz Conference & Expo at the Gaylord National Habor Hotel from May 17 – 19, 2017.