710 holiday

710 no 4/20 for California cannabis operators

Published

5 months ago

July 12, 2024

The unofficial 710 “Oil Day” holiday was Wednesday, and while cannabis companies took to social media to try and drive hype around it, operators in California say it was no 4/20.

Skyler Sutton, founder and chairman of Heavy Hitters, a top player in the state’s premium vape market, told Green Market Report, that the holiday “wasn’t enough to make a blip” in sales.

“It wasn’t like one felt crazy around the warehouse or anything like that, or there was some big busyness from it,” Sutton said.

It’s a sentiment echoed by Jerred Kiloh, a 25-year veteran of cannabis retail and president of the United Cannabis Business Association. Kiloh reported that his shop, The Higher Path Dispensary in Los Angeles, saw a roughly 20% increase in revenue on 710 versus a typical midweek day – far less than the “five or six times” increase seen on 420.

He noted that most retailers in his network reported similar modest gains, with profits often flat due to discounts associated with the day.

Another issue: lack of awareness.

“I did a pop quiz at my staff the other day and three of them didn’t know it was 710 and didn’t know what it was either. And they work in the shop,” Kiloh noted.

“A cannabis holiday is on no publicly available calendars,” he added.

That doesn’t mean there wasn’t any success for cannabis operators on the relatively new holiday. Sutton noted that some brands, particularly those focused solely on concentrates, may have seen more of a boost from the day.

“I think for 710 labs, it’s probably 400% bigger than it is for, let’s just say, a raw garden or a normal customer,” he mused.

While a special holiday for extracts and concentrates hasn’t necessarily driven sales up in the general cannabis channel, what has worked, according to Kiloh, is really understanding your customers.

“The legal industry isn’t attracting that younger demographic that we’d like to, which is the one that would be buying more of the dabs,” Kiloh explained. “That 28-year-old male who dominates the high usage sort of position, that’s not the target demographic for legal cannabis. It’s sad but true.”

He posited: “When you’re paying 50% extra on taxes, why would you buy from a legal source?”

The competitive nature of the California market, with its high taxes and strict regulations, has long made it difficult to attract price-sensitive younger consumers.

Instead, Kiloh said his customers tend to be older, more loyal customers that he can reach by emphasizing sophistication and value. “When you’re in your forties, you have loyalty, you like consistency. You want to know what you’re getting into,” he said.

Kiloh said the shop “saw a 300% increase” in concentrate sales after implementing a strategy that included educating customers on the cost-effectiveness of concentrates versus traditional flower products.

However, he noted that many customers, particularly older ones, often return to flower or all-in-one vape pens after experimenting with concentrates.

“I see a lot of people; they try it, they love it, and then they come back to an easier pen,” he said.

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Author: mscannabiz.com

MScannaBIZ for all you Mississippi Cannabis News and Information.

710 holiday

California’s cannabis industry shifts 710 strategy on heels of new vape rules

Published

6 months ago

July 11, 2024

mscannabiz.com

As cannabis companies across the U.S. set up to celebrate the relatively new cannabis holiday of 710, California operators are adapting to new vape regulations and rethinking strategies for the product category, industry leaders say.

The new regulations prohibit using the term “disposable” for vape products and mandate clearer disposal instructions, in an effort to reduce e-waste and improve consumer education.

“These products were being marketed as disposables, but they’re not actually disposable in the sense that you can’t throw them in a trash can,” Laura Fogelman, vice president of communications at cannabis vape company PAX, told Green Market Report.

In particular, the new rules address safety concerns with lithium-ion batteries in vape devices, she said.

“We have seen an uptick in explosions and fires, because these batteries, when they get wet, can combust,” Fogelman explained.

On top of the rules putting somewhat of a damper on a holiday that focuses on the concentrates used in vapes, some operators are shifting their focus away from cannabis-centric holidays and leaning into other sales periods, such as the Fourth of July.

“If you go into a retailer tied to 4/20 or 710, it’s all about deals and promotions and kind of the cheapest products,” Fogelman said. “We’re trying to bring that value to consumers at other moments where we can kind of stand out a little bit more.”

All-in-one

With the new rules, operators in the state are transitioning to new terminology, with “all-in-one” replacing “disposable” for certain vape products. However, Oliver Summers, president of retail operations at United Patient Alliance in Sun Valley, voiced concerns about the impact of such moves on more diverse communities.

“It might help some people,” he said. “But again, it’s all about changing people’s vernacular. And in my neighborhood, I deal with a lot of Latin and Armenian people who don’t really speak English very well altogether. So it’s going to be something to watch over the next few weeks.”

Summers even joked about the potential confusion, saying, “We’re gonna put up a big sign that says, ‘Don’t use the word disposable.’ Yeah, that’s gonna be the new thing. I call dibs on the Etsy.” He added humorously, “You have to walk outside and then come back in again,” referencing the old practice in head shops where customers had to leave and re-enter if they used prohibited terms.

At the same time, consumer education is especially important in an environmentally conscious state such as California, where a single spark can wreck entire swaths of ecosystem.

“Consumer education is so important here,” Fogelman said. “And at the end of the day, consumer behavior shapes markets.”

Companies such as PAX have been trying to stay ahead on the sustainability front for a while. The brand has introduced products using ocean-bound plastic and obtained “plastic negative” certification, she added.

Summers said United Patient Alliance also has programs already in place, such as its existing recycling initiative, to support the new regulatory scheme.

Feeling out the market

What the new rules don’t do is address broader challenges in the California cannabis industry. Summers pointed to the usual market saturation: “Unfortunately, nowadays, you know, as we all have so much of the similar products on our shelves … it makes it a little tough to be more exciting.”

Despite challenges faced by individual operators, data from wholesale cannabis platform LeafLink suggests a robust market for concentrates heading into 710. According to firm, concentrate sales expand strongly in the lead-up to July 10, with wholesale gross merchandise volume (GMV) per day up 13% relative to the rest of the year.

This year’s 710 could be the biggest yet, as total GMV and orders of the form factor up 10-15% year-over-year, according to LeafLink’s data.

But it’s not the same old products flying off the shelf. Data shows non-distillate concentrates gaining popularity, increasing by more than 30% in the last two weeks of June compared to the same period in 2023, marking the strongest growth for any form factor.

Live resin and rosin have also grown to account for over 20% of finished concentrate sales on the marketplace, up from just 6% three years ago.

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