The start of confinement has marked a change in the average American’s spending and consumption habits. Apprehension associated with a recession and pandemic has called upon palliatives, like physical activity, meditation, or in some instances, cannabis. More than a dozen states have declared cannabis dispensaries and distributors essential businesses during the pandemic, and the industry has seen an uptick in new and regular consumers.
Modes of purchase might also be to blame for the spark in cannabis purchases- as we’ve previously discussed, like getting dinner delivered or adding new clothes to your virtual cart, people spend more when they order online. April 20th served as a perfect example of delivery’s impact on ticket size, with the average order value for online retail transactions ballooning to $70 by April 2020, a 30% increase from $54 a year prior.
Spending aside, how has the pandemic influenced the way people consume their cannabis? Recently, concentrates like dabs and vapes grew in popularity, fueling much of the industry's growth. But a fear of inhaled products has risen, spurred partly by unregulated marijuana products, a reported “vaping” illness, and a general fear of respiratory risks associated with the coronavirus. Furthermore, with consumers sharing indoor space at all times with their roommates or families, more discreet cannabis consumption has become the priority, as well as more discreet purchasing.
Taking a look at the data, edibles make up a strong percentage of average ticket sizes for delivery, but even more for retail. However, despite an increase in average ticket size in both categories, order frequencies haven’t gone up. We can look to the “stocking up effect” for that, where consumers stock up on product in fear that supply will run low and/or prices will skyrocket. With this in mind, the data suggests that new users are buying in bulk, and consuming more cannabis with fewer, higher cost purchases.
Promotions may also encourage "spend more, save more" tactics, which can drive up overall ticket sizes. No matter the cause, it's evident that the cannacurious are willing to spend a bit more to enjoy their products with discretion, long-term cost-efficiency, and convenience.
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