2023 Retailer’s Guide to a Successful 420
April marks the beginning of the highest of holidays for cannabis consumers and the dispensaries that serve them. For years, April 20th or simply 420, has been the biggest cannabis consumption and sales day of the year. Last year, the US hit a record number of cannabis sales, with more states’ legal recreational markets online on April 20 than ever before. Treez customers saw chart-busting utilization of cashless payments in 2022 as well as record number of visitors into their store.
Sales Strategy for 420
Top Selling Cannabis Products 420 2022
Discount Strategy for 420
A Comprehensive Guide to Marketing Your Dispensary for 4/20
How to Increase Dollars Earned on 4/20 Through Cashless Payments
Last Minute Checklist for 4/20 Preparations
Sales Strategy for 420
Year over year, the cannabis industry sees increases in cannabis products sales, availability, and variety. Every dispensary will be bringing their A game this 420 so we’ve collected all our insights and knowledge from years in the cannabis space to help make this 420 your most successful day possible. Bookmark this page because we’ll update it regularly leading up to 4/20/23, providing deep dives into how to zero in on ideal pricing, discounting, and budtender behavior, so you'll stay ahead of the competition.
In order to extrapolate some trends, let's first take a look at sales numbers.
- In our 420 research last year, Treez reported that the average transaction count on 420 increased by nearly 30% between 2020 and 2021.
- Sales also increased in 2022. In fact, 4/20/22 saw about 20% more shoppers than any other single day of the year and 19% more customers than dispensaries served the week prior.
For the past 3 years, consumers have been bringing home more goodies on 420 than ever before:
- The average number of items per order increased by 1.22 units between 2021 and 2022.
- Shoppers checking out via a Treez point of sale system brought an average of 4.95 SKUs of cannabis home on 4/20/22.
- People’s baskets were full and also a few more dollars valuable – the average order value in 2022 increased to $89.38.
Will customers continue to broaden their shopping horizons this year? It remains to be seen but it might be smart to think about 420 as a “sampler’s holiday”, and offer pre-built baskets or prepacks of your top 5 products for people to try and bring home.
Moving from Cash to Cashless
Cash gross receipts
- were up 23% in total sales from 2021 to 2022.
- On April 20th, 2021, 80% of the total revenue was in cash.
- On April 20th, 2022, however, we saw a noticeable decline - only 71% of total revenue was in cash.
Cashless payments, including PIN debit, Cashless ATM, ACH:
- represented 20% of sales on April 20, 2021
- represented 29% of sales on April 20, 2022.
- Cashless payments recorded soaring sales. On 4/20 2022 TreezPay saw increases of 181%, with a 206% upsurge in total number of cashless transactions during that period.
- The average order value on TreezPay was $24 higher than a cash transaction. That makes sense when you factor in all the reasons cashless payments are beneficial, like upselling opportunities, overhead cost reductions, consumer convenience and mitigated risk associated with theft.
- More than $4M was spent through cashless payments last year on 4/20/22
- Almost $16M was spent over that week on Treez platforms in cashless payments
What can you determine from this sales and payments breakdown from 4/20/22?
You can be sure that this holiday continues to be the Black Friday of the cannabis world. Regular shoppers will be buying more than their average order and casual consumers will be sure to visit to take part in the holiday. Make sure you have enough of your most popular products, that your point of sale system is working flawlessly, and you are staffed correctly on 420 to meet the market’s needs.
Market cashless payments. When people know that you offer a secure, easy, and seamless way to check out without cash, they jump at the opportunity! You’ll be making your customers happy, saving your budtender or sales associate an extra step during each transaction, and keeping your accounting clearer. That way, when the chaos of the day is done, you’re faced with orderly bookkeeping, not another battle.
Top Selling Cannabis Products 420 2022
Next let’s go deeper into the products that moved during last year’s 420 (2022), and what we can determine could be your best products going into this year. We pulled the top selling product from stores using Treez point of sale and what we found wasn’t necessarily surprising, but it was interesting!
Flower took four of the top ten spots, including number one, which went to a strain of flower - Deep Breath. Pre-rolls were a close second, with three of the top ten spots.
Do you put stock in the sativa/indica classification as a way to predict effects? Shoppers on 420 may not. We saw the majority of strains represented in the top 10 falling into the “hybrid” classification. That’s in part due to how rare a “true indica” or a “true sativa” is in cultivation. It’s also probable that your sales associates or budtenders are providing a consultative experience instead and having conversations with 420 shoppers about their desired effects and providing recommendations from there.
Edibles rounded out the rest of the top 10 products, with two gummies packs snagging #7 and #10 spots, and a 10 MG Creme Cookie Single cookie from Emerald Sky took the #8 spot.
Notably missing from the top 10 products sold in dispensaries on 4/20 last year are cartridges. It could be that, with so many varieties of carts, a single type of vape cartridge is not popular enough to break the Top 10. Are carts becoming less popular overall or does this top 10 list only tell part of the story? Maybe both. We’ll certainly be checking sales numbers post-420 to determine those trends.
What can you learn from this top 10 product assortment breakdown from 4/20/22?
Flower has the power. Daily smokers and holiday observers alike love to purchase fresh flower or opt for the convenience of prerolls over everything. You should have flower and preroll options at all major price points, in stock and in sellable locations within your POS in preparation for 420.
Make sure you have options to choose from. Novelties, like edibles that look and taste like classic creme cookies are exciting and fun, just like the 420 holiday, so stock up on and/or highlight a few of those in your 420 promotions and signage.
But of course, these numbers are aggregate - they’re taken from all sales, across all markets, to all customers. Some of the strains, brands, and products we’ve mentioned may not appeal to your customer base or even be available for you to stock! To really understand what products to have in stock for 420 in your stores, you must compare trends to your own data and analytics.
Customers on the Latest Version of Treez can access product assortment breakdowns by navigating to Retail Analytics and checking out Product Line Performance. There you can understand what moves fastest and performs best in a multitude of ways.
Sorting your product’s performance by sellable velocity, how many units of a product sold when it was in a sellable location (not in a vault, or quarantine, etc.), can show you which products are flying off the shelves on an average day. Make sure those products are stocked, especially with a high Sellable Velocity vs. low Units Remaining. Verify you have reorders of those products coming in, and on what day they’ll arrive. You’ll need the product ordered, delivered, and processed before the week of 420.
As you’re finalizing your product orders and 420 strategy, look to the numbers to guide your decisions. Part of that strategy should include being fully in stock of all the top selling products in your stores, but it also may include adding a few unique offerings to get shoppers in the holiday spirit. Be sure your shoppers know they can reduce their wait time and the need for cash by shopping online or checking out with a cashless payment type like ACH or PIN Debit.
Next time, we’ll break down discounting strategies that work and how to determine your best course of action for marking down products without eating into your margins.
Discount Strategy for 420
Next let’s break down some discounting strategies that work and how to determine your best course of action for marking down products without eating into your margins.
We analyzed almost 7500 discounts representing more than $3.5 million in sales from last year’s 420 holiday to uncover discounting trends and insights during the week of 4/20.
"By now, a lot of dispensaries have already figured out what discounts they're gonna run," said Andrew Hodshire, Retail Analytics consultant and former Retail Systems Manager at Sol Flower in Arizona. "If not, they're scrambling to do that.”
Whichever group you find yourself in, read on to gain deeper insights into discounting practices across the industry and compare it to your plans.
- The most common discount we found across all states and markets was a 25% off all store for the day of 420.
- Discounts used on 4/20 tend to only be redeemable for the day of 4/20, rather than the week leading up to the holiday or a month-long span.
- The average life of all active discounts used on 4/20/22 was 2.06 days.
- The average life of the most redeemed discounts on 4/20/22 was lower at 1.5 average days active.
The top ten redeemed discounts used within Treez’ systems:
- resulted in 8425 total redemptions
- drove more than $550,000 net sales and $120,000 in profits
- exclusively were storewide discounts, between 15% and 42%.
But did those discounts result in returning customers or profits?
The average new customer repeat rate for the top 10 redeemed discounts was almost 36%. Compare that to the rate for all discounts used in the system on 420, which was about 23%. So yes, if you’re looking to create some new, returning customers, feel empowered to create a broad discount, at a percentage that makes sense for your operation.
As far as profits go, the top 10 redeemed discounts on 4/20/22 resulted in an Average Order Profit of $15.20, compared to the average on all discounts used on 4/20/22, which was $23.39. Here we see that a discount that succeeds in creating new customers doesn’t simultaneously make as much profit. However, it should pay back over time as you have generated loyal, repeat customers as a result.
A low Average Order Profit doesn’t necessarily indicate failure in the discounting strategy. But it does make clear that a successful discount doesn’t always check every single box. That’s why pre-planning your discount strategies on your chosen metrics is vital.
Discounts can also be used to reduce the strain on your staff during busy times. When are your busiest times in general on a Thursday (when 4/20 falls this year)? That’s when your stores will be the most packed and frantic. Consider advertising an Early Bird Special discount to incentivize those who can shop earlier to do so. Hodshire also suggests incentivizing online orders through discounts as a space and time saver. "An extra 5% off or 10% off online orders, and cool, I've just cut down my line."
Hodshire recommends using Discount Analysis in the Discount Planning Dashboard of Retail Analytics within Treez to identify the right discount strategy and plan accordingly.
"Once you’ve identified what you're going to be doing discount-wise, then you can back into purchasing. 'Ok, we're running a BOGO on STIIZY cartridges? Make sure that we’re ordering that extra amount for 420 if we're gonna go hard like that.'”
Now your discounts are planned, they’re designed to hit the metrics that you’re gunning for, and your purchaser has the right reorders in, timed for delivery before 4/19. There’s one more piece of the puzzle to consider, says Andrew.
"Are you going to get credit back on these things? Under Discount Analysis in Retail Analytics, we have a Vendor Discount Credit Report. If you’re splitting a BOGO credit-wise or cost-wise with a brand, on 4/21, you can turn around and use Discount Analysis credit report to get the credit reports out to all the brands that day, and be done with it."
And just like that, you’ve designed discounts, sourced the right products, created some fantastic new customers who will return all year, and submitted for reimbursement from your brands, all before the weekend. That’s something to celebrate.
With days ticking down to the biggest holiday in the cannabis industry, it's important that retailers have a solid discounting strategy in place. The data we've analyzed shows that storewide discounts are the most commonly used and can drive significant sales and customer loyalty. But, it's important to also consider the potential impact on profit that any discount you run could have. By using tools like Discount Analysis on the Discount Planning Dashboard, you can analyze and plan your discount strategy for maximum impact on the metrics that are most important to your store’s success.
A Comprehensive Guide to Marketing Your Dispensary for 4/20
- Have you started planning? Determine your timeline and start now.
Don't wait until the last minute to plan your 4/20 marketing campaign. Determine a timeline and start executing your plan now. This will give you enough time to make adjustments and ensure that everything is in place before the holiday arrives.
- What are the goals? What is your offer? Get started with the end in mind.
What do you want to achieve with your 4/20 campaign? Are you launching a new product, running a promotion, or simply building brand awareness? Whatever your goal may be, make sure you have a clear idea of what you want to achieve before you start any marketing campaign. Incorporate your sales data from your point of sale to measure the impact of your campaign by offer, product or channel.
- Know your target audience
Who are you trying to reach? Who is your target audience? From there, determine what channels they use by referencing resources like Headset.io, Brightfield Group and other market research. Write and create the content and messaging to speak to them on those channels, and from there define the strategy that ties your marketing campaign together.
- Not all 4/20 efforts need to be executed on 4/20
You don't have to execute all your 4/20 marketing efforts on the actual day. Research CMA cited indicated that the next 10 days after 4/20 see a marked boost in sales. By spreading out your campaign, you make it more digestible for your audience. Consider leveraging existing promotions or launching new ones leading up to the holiday and even continuing afterwards as you’ll have new customers you can now market to.
- Work with a tight budget
If you have a tight budget leading up to 4/20, explore options for free or low-cost marketing tactics, like email and text message marketing. Consider running joint campaigns with a brand or other product. Define how you will measure the performance and attribution of the campaign, remembering that both dollar ROI (profits made) and non-dollar ROI (awareness, engagement) are both revelatory metrics.
- Collaborate with your local cannabis community
Get involved with your local cannabis community by conducting as many demos as possible and collaborating with other brands. This is a great way to build relationships and generate buzz leading up to 4/20.
- Leverage your existing customer base
Take advantage of your existing hype and promotions. Can your customers tag you, reshare your content, or create user-generated content? Use this to your advantage to expand your reach and build brand awareness.
- Focus on key initiatives
Don't try to reach every consumer segment in all the places they might be reachable. Instead, focus on key initiatives that will make the biggest impact. Remember, KISS: Keep It Simple and Smart!
- Develop a unique spin
If you operate in a heavily-saturated market, develop a unique spin on a proven approach that will help you stand out from the competition. This could be a new product, a unique promotion, or a creative marketing campaign.
- Honor your budtenders
Finally, don't forget to honor your budtenders for their influence on your sales and moving products. Set realistic expectations, including what products they should focus their attention on, and achievable goals, and make sure they feel appreciated for their efforts.
With these tips in mind, you'll be well on your way to planning and executing a successful 4/20 marketing campaign.
- Keep an eye out for our next learning session in the TreezHouse!
- Register for the Cannabis Marketing Summit June 21-23, 2023 here and use Treezhouse10 to save $55.
How to Increase Dollars Earned on 4/20 Through Cashless Payments
Dispensaries striving for a successful and profitable 4/20 holiday should prioritize boosting their cashless payment adoption. By offering cashless payment options and encouraging customers to use them over cash, retailers enable budtenders to upsell products, reduce transaction time, and minimize cash handling. These improvements can impact every metric that will make or break your 4/20.
When retailers implement cashless payments like TreezPay, they can see an increase in ticket values of $10-$20 per transaction compared to cash purchases. On a holiday like 4/20, the lift in Average Order Value can increase to $24 more per ticket on average.
Cashless payments make for smoother checkouts, with no fumbling for cash, no coming up short in funds and requiring a refund, and no making change.
Looking at the statistics, cashless payments utilization has increased significantly year over year, with both retailers and customers opting for card or bank account payments over messy, dangerous cash. Our data shows that, for retailers operating on Treez point of sale system, cash gross receipts increased by 23% from 2021 to 2022, with cash representing three-fourths of gross sales. Cashless payments utilization on 4/20, including PIN debit and ACH surged 9% from 2021 to 2022, representing more than $4 million day-of- and almost $16 million week-of- 4/20 sales.
So how do you increase your own dispensary’s cashless payment utilization?
- Educate your customers about the benefits for them:
Easy to purchase whatever you order
No running out of cash or paying ATM fees
Simple record of purchases
- Make sure your sales associates are offering cashless payments as an option at each transaction.
Even if the customer chooses to pay in cash, you’ve planted the seed that there’s a safer, easier, better way to shop at your store. Consider incentivizing the budtenders who are able to sell customers on trying cashless payments.
- Communicate with your customers about cashless payments even when they’re not in-store.
We’ve put together a Digital Marketing Toolkit to encourage your customers to go cashless. Through email, website copy and social media posts you can let your customers know that they can leave the cash at home.
- Consider offering discounts or promotions for customers who use cashless payments to further encourage adoption.
A small discount can be a powerful tool to incentivize customers to try cashless payments and increase your dispensary’s overall utilization.
Take these steps now to increase your dispensary's cashless payment utilization for the 4/20 holiday, and to create future cashless payments users.
Want to see how Treez can improve your success as a cannabis retailer?
Last Minute Checklist for 4/20 Preparations:
Ready for 4/20 at your dispensary? Here's a checklist of things you can do today to prepare:
- Give me a sign
You might not have time to go to a printing service, but take advantage of any screens you have available inside your retail operation. Fresh graphics will catch the eyes of customers waiting in line. Consider promoting cashless payments options - not only will you likely take home more dollars per transaction, customers will speed through the lines.
- Check off discounts
Test your discounts inside the system and make sure they're calculating as expected on the products you want to discount. Retailers on the Latest Version of Treez should go to the Current Inventory Dashboard and confirm: all the products that are applying to the discounts that you're running out on the floor? What percentage of those products are in a sellable location?
- Social hour
Send a last minute email highlighting your 4/20 offerings and post deals and offers to social media. Your customers’ inbox and social feeds will be crammed tomorrow, and you should try to stand out with strong headlines and graphics.
- Staffed up
Make sure you have enough people for your busiest hours and stores. Have reliable folks on-call for when staff inevitably calls out tomorrow. Have a plan of who to shift to where if you're short-staffed.
- Make it fun
Choose a high-energy, happy playlist so your employees and customers feel the celebratory nature of the day. Remind everyone that working 4/20 is a rite of passage in the cannabis industry, and once they get through the day with their team on their side, they've got a badge of honor.
- Acknowledge staff dedication
Say thank you to your staff in words and actions. They're making a sacrifice by working on 4/20 instead of enjoying one of the brand parties held on the holiday.
- Feed your budtenders
Take a quick poll, decide and preorder food options for lunch and dinner that will delight your budtenders, keep their energy high, and keep them close to the premises even on breaks. A well-fed crew will be more willing to help each other out during the busiest, hardest day of the year.
- Incentivize your staff
Create simple incentives, like setting an average order value for 4/20 to shoot for together. If you succeed, everyone gets a 4/20 bonus added to their check. Or maybe everyone who works their scheduled 4/20 shifts to completion gets 1.5 days off of their choosing. These incentives will motivate your staff and show them that you appreciate their hard work.
- Start thinking about replenishment and take early stock of what’s moving off the shelves.
When the dust settles, you’ll need to restock your most popular products. Use sellable velocity inside Retail Analytics to identify new stars. And return back to this blog for post-4/20 advice on how to restock.
Remember, 4/20 is one of the busiest days of the year in the cannabis industry. By preparing in advance and taking care of your staff, you'll be able to provide the best experience possible for your customers. Good luck!