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Cannabis dispensaries across Maryland are preparing for the state's first 4/20 after the rollout of recreational cannabis, with many hoping to win over first-time customers with celebrations and special deals.
Mitch Trellis, who owns two Baltimore-area dispensaries under the Remedy brand, expects his sales numbers for the Saturday holiday to be double that of last year's 4/20 event because of the increased customer base from recreational cannabis. The day allows dispensaries to get in the public eye, which can be difficult because of the restrictions on how cannabis businesses can advertise. Many dispensaries view the day as an opportunity to find new customers who may not have been exposed to cannabis before, so are offering discounts and fun events to entice people into their stores.
“It's a one-day opportunity to try to create excitement around the industry and inform people about the market,” Trellis said.
The reason 4/20 is such an essential part of the cannabis calendar goes back to the Bay Area rock legends the Grateful Dead, who helped popularize recreational drugs. Fans of the group would call for people to use cannabis at 4:20 p.m. on April 20, birthing a traditional that is now one of the most profitable days of the year for cannabis businesses.
Ascend Wellness Holdings, a multistate operator with four locations in Maryland, has hosted special deals all month to attract customers and get people who may want to avoid the large 4/20 crowds into the dispensary. The company tends to see a 50% boost in sales compared to an average day, but Rebecca Koar, the company's vice president of investor relations and strategy, thinks that boom could be higher since the holiday falls on a Saturday this year. The company’s Crofton location will be the center for a “Cannapalooza” event from 2 p.m. to 6 p.m. with vendors and a golf simulator.
“We see more newcomers come in just to explore, especially when we host an event like Cannapalooza,” Koar said.
Ben Burnstein, a senior analyst at cannabis tech firm LeafLink who tracks the nation's cannabis market, said dispensaries tend to see a 20% to 25% sales boost in April compared to an average month. This sales growth is a crucial lifeline for dispensaries that often struggle with profitability. Maryland has higher prices for bulk cannabis compared to most states, at around $2,000 a pound, which helps insulate it from some of the issues facing other states like California, where up to 90% of cannabis businesses have not achieved profitability. Although Maryland's market is healthier than most other states, most companies are still just breaking even or making a slight profit, Burnstein said.
“The 4/20 week is when you make all of your profit as a dispensary. It contributes to a large part of your total sales,” he said.
Although Maryland cannabis sales have remained relatively steady after more than doubling in the months after the launch of recreational cannabis, there could be another revenue jump in the state's future. The state should see a second boost in sales once the new license holders from the cannabis lottery earlier this year become operational, Burnstein added. The increase in the cannabis supply and having more stores closer to where people live will likely make cannabis more attractive to customers.
