With Thanksgiving almost here, cannabis brands and retailers are gearing up for the holiday shopping season. Keen to take advantage of the influx of consumer dollars into the economy during the final weeks of the year, many businesses in the cannabis industry launch holiday promotions akin to the sales and hoopla surrounding Black Friday. However, instead of waiting for the day after Thanksgiving, many cannabis retailers focus on the day before the national day of feasting and football and have Green Wednesday promotions instead. But is the annual event a profit driver, or does the industry’s Thanksgiving week tradition pit brands against each other and become a race to the bottom?
The Green Wednesday phenomenon is an effort by the regulated cannabis industry to tap into American consumers’ long-held traditions surrounding shopping during the holiday season. For generations, the day after Thanksgiving has been the unofficial start of the gift shopping season, famously given the moniker Black Friday to honor its significance as the day many retailers first post a profit (get in the black) for the sales year. And of course, there’s also Cyber Monday to extend the shopping weekend.
Keeping with its legacy of bucking tradition, the cannabis industry set its sights on the day before Thanksgiving as its preferred launch of the holiday shopping season with Green Wednesday. Additionally, savvy marketers have recognized the opportunity that the Thanksgiving holiday weekend presents to encourage consumers to shop for more than gifts. By shopping before the big day, shoppers can put themselves on the list along with guest recipients. After all, the herb can be both a great way to enjoy the festivities and serve as a coping mechanism for the stress of family gatherings.
As the Green Wednesday tradition has taken hold with the spread of legalization, the day is seen by many as a way for cannabis brands to reach new customers and pump-up year-end sales. Michael Bologna, CEO of cannabis vaporizer hardware maker Dip Devices, says that Green Wednesday is good for the industry and helps drive sales during Thanksgiving week to outperform the volume seen in an average week.
“Green Wednesday is valuable for the cannabis industry because it reminds brands and individuals alike that cannabis is an important part of any gift or holiday tradition,” Bologna wrote in an email. “Many people use cannabis around the holidays to celebrate, share in community, or in remembrance of those who can’t be with us. Having a day during the shopping season that highlights cannabis allows us to bring those traditions to the forefront and continue to normalize cannabis while also saving people money!”
Derrell Black, general manager of Haverhill, Massachusetts dispensary Mello Cannabis agreed, adding that promotions for Green Wednesday help businesses keep pace with the competition and stay relevant with consumers.
“Many businesses run promotions during this time and participating ensures that our business remains competitive,” Black told Cannabis Now. “It allows us to stand out and attract customers who are actively seeking discounts.”
“Offering promotions during Green Wednesday is a way to engage with our customer base and it shows that Mello is responsive to seasonal trends and customer preferences,” Black added.
Green Wednesday Data Not All Rosy
Despite the enthusiasm for Green Wednesday among much of the cannabis industry, some market data suggests the event may not be all it’s cracked up to be. Analysts at retail technology company Treez say that data from last year shows that Thanksgiving week promotions are indeed a golden opportunity for consumers to stock up and seize deep discounts.
However, the data also shows that Green Wednesday may not be helping brands and retailers the way they think it is. Despite the surge in customer traffic and transactions on Green Wednesday and Black Friday, sales throughout the Wednesday-to-Sunday Thanksgiving period remain relatively consistent with an average week. Additionally, the increased prevalence of discounts during the holiday week has triggered 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% the week of the holiday.
“In essence, Green Wednesday and Black Friday are a double-edged sword for the cannabis industry, offering high sales while compromising profitability,” Elling Hofland, director of product management at Treez, said in a statement to Cannabis Now. “Since the number of customers shopping during the week of Thanksgiving is consistent with an average week, our suggestion for retailers is to prioritize offering discounts on items that typically face challenges in moving off the shelves.”
The data also suggest that instead of Green Wednesday being a day of good sales on top of what can normally be expected in a week, consumers are shifting their buying, which normally occurs primarily on the weekends, to the day before Thanksgiving. And many consumers are taking advantage of deep discounts to stock up for the long holiday weekend and beyond. Treez reports that to match the demand and enthusiasm, cannabis brands and retailers can find themselves in a race to the bottom when it comes to pricing, with severe discounting being expected and executed at dispensaries across the country. Because of this, Treez advises retailers to be thoughtful when planning their Green Wednesday promotions.
“We advise exercising restraint when it comes to discounting your best-selling products,” said Hofland. “The rationale behind this recommendation is rooted in the understanding that popular items are already likely to be purchased at their regular price.”
The Green Wednesday data from Treez analyzed hundreds of thousands of cannabis transactions at dispensaries running its retail platform and reflect averages for retailers in 13 US markets, including independent shops and chains with six or more stores. Some retailers are satisfied with their marketing efforts for the Thanksgiving weekend, with Black at Mello Cannabis reporting that sales during the week of Thanksgiving often see a notable increase compared to an average week. The company’s sales compared to the performance of the industry as a whole illustrates the value of collecting and analyzing key indicators for events and promotions such as Green Wednesday to help drive results in the future.
“We hope our extensive retail data analysis of Green Wednesday and Black Friday offers retailers and brands alike valuable insights, enabling a more strategic approach to become profitable,” said John Yang, co-founder and CEO of Treez. “Recognizing that data is the cornerstone of success, we’ve gone the extra mile to offer retailers and brands a customizable, insightful view into their holiday sales, trends and personalized recommendations for discounting and restocking.”