As cannabis retailers across the US prepare for this year’s ‘Green Wednesday’ sales event, figures from Treez offer insight into the day’s potential based on last year’s performance.
Taking place on the Wednesday before Thanksgiving, Green Wednesday has emerged as the cannabis industry’s biggest moment in the Q4 holiday season in the US in recent years.
According to figures from the cannabis retail technology company, whose sales software is used in over 500 retail locations across the US, while the event does encourage a surge in customer visits, the benefit on gross margins is minimal.
Data collected from ‘hundreds of thousands of cannabis shopper visits’ in the week running up to Thanksgiving Sunday (27 November 2022), showed that average order values were between $74-$76, while average discounts on products were between 26% and 28%.
However, while footfall increases significantly on Green Wednesday and the following Black Friday, the data indicates that sales remain relatively consistent with ‘an average week’.
This suggests that although there is a shift in sales towards these days, ‘the overall impact of thanksgiving week is minimal’, as shoppers look to stock up for the long weekend and change their shopping behaviour as such.
Furthermore, the increased prevalence of discounts during these prime days trigger a decline in gross margins compared to the previous week, with margins at an average of 49% the week before Thanksgiving dropping to an average of 41-44%.
Elling Hofland, Director of Product Management at Treez, said: “As we navigate through these insights, it becomes essential to scrutinise the nuanced dynamics at play during the Thanksgiving week.
“While the initial allure of discounts is evident, the impact on gross margins prompts a reevaluation of the true economic value of Green Wednesday for the cannabis sector. In essence, Green Wednesday and Black Friday are a double-edged sword for the cannabis industry, offering high sales while compromising profitability.
“Since the number of customers shopping during the week of Thanksgiving is consistent with an average week, our suggestion for retailers is to prioritise offering discounts on items that typically face challenges in moving off the shelves. Furthermore, we advise exercising restraint when it comes to discounting your best-selling products. The rationale behind this recommendation is rooted in the understanding that popular items are already likely to be purchased at their regular price.”