Washington State, for example, had almost $1.5 Billion in cannabis sales last year, however sales figures have declined 6 months in a row, with the exception of a Christmas boost thanks in part to the holidays with the in-laws and New Years Eve.
What’s the Significance?:
Some analysts are claiming there’s a correlation between cannabis sales and COVID restrictions easing.
The theory is that people had more idle time at home during the lockdowns, with extra income from stimulus checks, so many of those people turned to cannabis products.
Now that lockdowns are over, the theory goes that those people are now using less cannabis.
So What Happened?:
Total Sales= $103.9
YOY Sales Growth= -7.0% (Sales growth topped 28% prior to Covid)
Avg Basket= $33.47
Basket Count= 3.1
Brand Concentration= 22%
Sales patterns were similar to other states, with declines starting right before the summer in May.
The Impact:
The prevailing theory of attributing lower sales to the end of the lockdowns might be part of the reason, however, I believe the impact of inflation can not be overstated.
The same economic factors hitting other business sectors are also affecting the cannabis industry. Cannabis sales aren’t falling just because people are trying to enjoy the outdoors, it’s also falling as inflation and gasoline prices are rising.
Inflationary Pressures:
Decreased average basket size trend continues, while the number of transactions continues to increase- indicating consumers are still going to #potshops more often, but spending less per transaction. This could mean consumers are trying to avoid higher minimum delivery requirements and opting to go to dispensaries and buying only what they need instead.
Consolidation:
Brand concentration has remained relatively steady, however, it’s anticipated that consolidation will pick up as Canadian companies and private equity and venture capitalists come into the space in anticipation of U.S. Federal legalization to snap up under-valued cannabis prospects in hopes of a legalization rally that’ll spark the next wave of cannabis stock speculation.
Show Notes:
Cannabis Market Overview March 2022
https://www.headset.io/posts/cannabis-market-overview-march-2022
Host:
Josh Kincaid, Capital Markets Analyst & host of your cannabis business podcast.
https://www.linkedin.com/in/joshkincaid/
Episode 915 The #TalkingHedge…
Your Cannabis Business Podcast.
Covering cannabis products, reviews, business news, interviews, investments, events, and more.
https://www.theTalkingHedgepodcast.com
Music Info:
Song: Beat | Keep On | 2020
Artist: Milochromatic Beats
&
Song: Dark Trap Beats Hard Rap Instrumental | Gang | 2018
Artist: LuxrayBeats
Keywords:
Hemp News, Weed News, Cannabis News, Marijuana News, Cannabis Business, Marijuana Business, Cannabis Industry News, Marijuana Industry News, Weed News 420, Talking Hedge Podcast, Cannabis Podcast, Marijuana Podcast, Business Podcast, CBD podcast, THC podcast, Cannabis Pitch Deck, Marijuana Pitch Deck, Marijuana Investment Deck, Cannabis Investment Deck, Cannabis Compliance, Cannabis Data, Cannabis Banking, Cannabis Investment, Pot Stocks, Cannabis Stocks, Weed Stocks, Marijuana Stocks, Cannabis Data, Marijuana Data, Cannabis Analytics, Marijuana Analytics, Cannabis Sales Data, Marijuana Sales Data
Josh is not an investment adviser. The Talking Hedge is long gold and silver. Listeners should always speak to their personal financial advisers. This is only entertainment.
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