What Happened After The COVID-19 Cannabis-Buying Surge? Medical Vs. Recreational Sales In The Time Of Coronavirus

By DataOwl's Dan Hirsch.

As the nation contends with the coronavirus crisis, and lockdowns that have lasted more than a month, new consumer trends are emerging within the cannabis industry that may forever reshape cannabis purchasing behavior.

We at DataOwl are able to take a detailed look at the point of sales systems of dispensary customers nationwide, and in analyzing the data have found key trends that can help us predict the new normal.

The Initial Surge 

Before COVID-19, cannabis purchases were concentrated with buying falling predictably during certain days of the week - specifically Fridays and Saturdays.

As the US began to see its first cases, states experienced revenue surges around mid-March coinciding with rolling shelter-in-place orders throughout the country as citizens rushed to purchase cannabis in advance of potential long quarantine. In the weeks that followed, recreational cannabis states, predominantly, have seen a decline in sales, while medical cannabis states are at normal or higher than pre-coronavirus sales levels. 

In contrast, during the weeks following the mid-March surge, there is decreased variation in day-to-day sales volume with a leveling of sales activity throughout the week.

Different Regulations Are Providing Different Results

Nevada had a surge in purchasing on March 18th but the next day marked the start of a dramatic plunge in sales corresponding with the closure of all casinos. Nevada has a sustained decline in sales with the absence of tourists, with revenue dropping as much as 80% below normal when compared to January and February sales. In subsequent weeks following the surge, sales remain low continuing into the beginning of April when revenue stabilizes about 65% below normal values. 

See Also: Deemed Essential, The Medicinal Cannabis Industry Is Leading During Coronavirus Outbreak

Massachusetts is another state suffering major revenue losses following a buying frenzy. Only medical cannabis was deemed essential in Massachusetts, and consequently, sales on March 23rd spiked to over 230% of normal in preparation for the closure of all recreational cannabis dispensaries. Sales revenue precipitously declines as recreational cannabis sales are halted in Massachusetts, starting mid-day March 24th and continuing currently. With the elimination of recreational cannabis in Massachusetts, sales revenue averages starting March 25th declined about 35% below normal.

Nevada and Massachusetts, states where both adult-use and medical cannabis are legal, have suffered major revenue losses from the coronavirus disruption, and during the same period, many medical states have seen increases in revenue. 

Medical States (3/23-4/11) 

States where only medical cannabis is legal, such as New York, Hawaii, Arizona, and New Mexico have realized increases in sales revenue when compared to same-day sales in January and February. In contrast, combined adult-use and medical hybrid states like California and Colorado, are experiencing decreasing cannabis sales, but the loss in sales is not as extreme as seen in Nevada and Massachusetts, also hybrid states.

Hybrid States (3/23-4/11)

Transaction Volume

Transaction Volume- Medical vs. Recreational

Transaction Value ($)- Medical vs. Recreational 

Medical and recreational use states are both seeing lighter transaction volumes and larger sales ticket sizes. 

In most medical states, the increased value of each transaction is more than making up for the limited transaction numbers resulting in higher revenue overall. Arizona transaction volumes have receded by almost 10% while the value of each transaction improved to over 27% causing overall sales revenue to increase over 15%. Similarly, New Mexico had an almost 6% reduction in transaction volumes with an increase in value per transaction up nearly 29% which resulted in revenue increasing almost 22%. 

See Also: COVID-19 Has Changed The Weed-Smoking Habits Of 70% Of US Cannabis Consumers

The number of transactions per day in Nevada has plummeted almost 85% (March 23-April 11) compared to January and February of this year and the amount spent on each transaction increased by almost 85%. The homegrown buyers are making larger purchases, but it’s not enough to offset the lack of tourist sales since revenue has fallen off by about 71% in that same period. 

What Trends Are Here To Stay? 

Consumers will always need access to cannabis, and if any lesson can be learned from this experience, it’s that the cannabis industry will likely survive due to its historic flexibility and chameleon ability to adapt to unexpected circumstances. 

Consumers are being exposed to omnichannel purchasing experiences, so for cannabis companies to survive and thrive in this new normal, they must prioritize operational efficiency, smart capital management know-how to pivot quickly with online offerings and personalized service.


Dan brings over 25 years of operations, business development, and marketing experience to the team. He has successfully launched over 50 products, closed over $1B of transactions, and led organizations both large and small through periods of rapid change. Dan has held leadership positions for companies including Time Warner, AOL, Miraval Holding, Affinity Group, American Laser Centers, and Nephroceuticals. Dan started his career as a lawyer with McKenna, Long, and Aldridge after graduating Magna Cum Laude from Boston University School of Law.

The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Lead image by Ilona Szentivanyi. Copyright: Benzinga.

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