All over the world, COVID-19 has led to record high job losses causing individuals to tighten on budgets wisely which ultimately means that cannabis consumers will be cutting down on purchasing cannabis and its products. Dispensaries are already offering big discounts and are attempting to launch new product sizes in hopes of retaining customers. Cannabis businesses need to figure out how to continue attracting customers who are cost-conscious during this recession.
A recession is an economic term that refers to a decline in economic activity. A recession lasts a few months and the effects can be seen in GDP, income, employment, production, and wholesale-retail sales. For the cannabis industry, this means letting go of employees, reduction in income, adjusting production to accommodate the times as well as sacrifices in selling prices such as the huge discounts.
Cresco, a cannabis business, has released a product line called ‘High Supply’ amidst the pandemic. This line is set to run at 20% cheaper than their flagship line and includes pre-rolled jays containing half an ounce as opposed to the usual one ounce.
Prior to the COVID-19 pandemic, cannabis retailers were trying to attract consumers who are curious about cannabis as well as regular consumers. Due to the recession caused by the pandemic, cannabis retailers are now only focusing on the individuals who consider cannabis as essential by giving them more bang for their buck.
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In order to sustain the legal cannabis market, keeping those loyal consumers is crucial. As retailers come out with more value, discounts, or specials, it prevents customers from getting their cannabis from illicit markets, which undercuts the price of the more regulated and licensed products and retails. This is because cannabis in the illicit markets is not subject to added expenses for taxes and testing.
Unfortunately, this means that cannabis businesses selling the premium, ‘fine wine’ version of cannabis also need to adapt their prices in order to keep those loyal and regular consumers in the legal and licensed markets.
Lightshade’s Marketing Director Lisa Gee has an ongoing deal for consumable cannabis buds (the flower) which is offered at nearly half the price that was offered before the recession. Lisa Gee explains that the deals and discounts are aimed more at connecting with the shopper profiles which are concerned with the price for value as well as that are motivated by promotions. When consumers find a product they like, can afford it, and consider to be of good value, they tend to stay loyal to that brand.
In order for cannabis businesses to take minimal damage from the recession, they would need to adjust their operations and costs to appeal to the public and regular consumers in order to make the cut in the restricted budgets of the people. Cannabis consumers can expect to find more products with a lower quantity and lower potency in this time of uncertainty. This does not mean that high quality and premium cannabis is going away, it just means that we need to adjust our expectations for what is to be sold at what price as well as the availability of the products.
Consumers can often get upset when they’re unable to get what they usually do, but times like these, cause for more patience and understanding as every chain in the cannabis industry is affected. Remember to try and support your local cannabis businesses by taking advantage of their discounts and specials. After all, we’re all part of one big cannabis community.
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