LeafLink’s Data Indicates How 4/20 Impacts Marijuana Sales

It’s been dubbed “Black Friday for marijuana merchants” and “Oktoberfest and New Year’s Eve all combined into one” for recreational enthusiasts, but 4/20 celebrations start long before April 20 for wholesale cannabis distributors.

According to proprietary data from LeafLink, an e-commerce marketplace in wholesale cannabis, March sees a greater increase in volume of purchasing orders across the wholesale cannabis space than April, as distributors prepare ahead of time for the spike in consumer demand.

This March, LeafLink saw more than $29 million in orders placed on its platform. LeafLink’s Colorado retailers spent 50% more in March than they did in February, which matches the trends from 2017.

According to LeafLink CEO Ryan Smith, retailer orders placed in March were 14% larger than the average month. While most would expect that April would be the largest ordering month, nationwide order sizes were actually 24% larger in March than in April.

LeafLink’s analysis relies on data from its own platform, which is used by more than 2,000 retailers and 500 brands. The platform gives LeafLink access to compelling data about the state of retail marijuana sales. By logging buy/sell transactions between retailers and brands, LeafLink can determine where, when, and how much cannabis is being purchased, by whom, and for what kind of market.

“We compiled this study because every year, we see dispensaries stock up for 4/20 starting in March,” says Smith. “This is important because 4/20 is the apex of cannabis holidays and, every year, provides direct insight into exactly how much the industry is growing in the U.S.”

Smith believes the spike in marijuana sales each March, a full month before the 4/20 holiday, is representative of brands’ efforts to capitalize on 4/20 in a big way. It also has to do with the strict banking laws that marijuana retailers now face.

“Retailers buy in bulk because of the banking restrictions within the industry, which limit the number of purchases they can make over time—causing them to stock up in mass one month before 4/20,” Smith says. “These are financial limitations other industries simply do not have, but companies have found a way to work within the confines.”

Interest in 4/20 has been on the rise for years. Total cannabis retail sales on 4/20 exceeded $45 million last year, according to the business software company MJ Freeway. That $45 million figure marked a 10% increase from the previous year, and it’s expected to be even higher this year thanks to more flexible recreational marijuana laws and the fact that 4/20 falls on a Friday.

The unofficial holiday has become so mainstream that even tech firms are jumping in. The ride sharing app Lyft, for example, is offering free ride credits to customers in certain markets as a way to keep unsafe drivers off the roads.

Although Smith can imagine a time in the “distant future” when interest surrounding the 4/20 holiday has peaked, he says we aren’t there yet. He foresees another five to 10 years of exponential increases in retail sales during the lead up to 4/20, as more and more individuals travel to recreational states for the holiday and new products and brands continue to emerge in the marketplace.

“Our 4/20 data gives brands and retailers an inside look at the purchasing patterns of the industry, as well as consumer demand expectations,” Smith says. “Even with fierce competition among like-minded companies, the best sales in the space will, at least for the foreseeable future, continue to take place about a month ahead of the holiday.”

Stephanie Miles is a senior editor at Street Fight.