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420 Retail Guide: How to Succeed on Marijuana’s Big Holiday

19 March 2021  |  20 min read

420 weed day

For cannabis dispensaries, April 20th is the day.

420 is the biggest day of the year for most marijuana retailers, both recreational and medical. But as the second 420 of the pandemic, cannabis consumers will again be celebrating the holiday a bit differently this year.

420 2021 falls on a Tuesday, so expect for busy spikes to start in the days prior to the actual holiday. Also prepare for increased competition. In all legal markets, you need to work extra hard to win the attention of consumers. Your loyal customers will come to you, but there's a huge cohort of new customers who will have a major impact on 420 revenues.

Every retailer will have discounts, innovative product bundles, and other attractions to bring customers into their store. Your ability to not only match their offers, but outpace them in marketing coverage, in-store experience, and preparation may play the biggest role in your success on 420.

      A look back at 420 2020 cannabis sales

      Landing two months into a global pandemic, 420 2020 was atypical. People were sheltering at home, and there were many unknowns about whether dispensaries would be shut down.

      An early-to-mid March spike was attributed to panic buying, then a dip as new laws were sorted out and strict stay-at-home covered much of the country. The actual day of 420 was down, but the days before and after were strong.

      2020 nationwide cannabis sales data for 420

      While 420 has seen impressive growth for years, 2020 was a bit of a bust, and was the first year in Flowhub history that 420 wasn't the biggest sales day of the year. The weekend of March 13th, 2020 actually performed 5% better than 420 for our customers.

      Here's how 420 2020 performed:

      Recreational sales were down (compared to 2019):

      • Average sales per location was down 14%
      • Colorado was down 36%
      • California was neutral, up 2%
      • Oregon was slightly up, at 8% growth

      Medical sales were strong:

      • Average sales per location was up 5.5%
      • Colorado was especially strong with a 32% increase

      What happened?

      We believe two things impacted 420 2020. One, consumers were obtaining medical cards for fear of recreational being shut down, and two, people were stocking up in the weeks before 420 rather than shopping day-of.

      Michael hanson Michael Hanson, Director of Data Science at Flowhub

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      420 outcomes for 2018 and 2019:

      2018: Total Colorado sales topped $9.1 million during 420 2018, representing an over 40% jump from the 2016 holiday.

      2019: April 20th, 2019 fell on a Saturday, a traditionally high sales day for dispensaries. Data from Flowhub shows a 7% increase in total sales compared to 2018, and more than 30% growth over 420 2017.

      And it wasn't just a high day, it was a high weekend. Compared to 420 weekend in 2018, sales and transactions grew 22% with a 20% increase in check-ins from 4/19-4/21/2019.

      Expectations for 420 2021

      1. Expect a busy weekend pre-420 again this year, starting on Friday, April 16. The 2021 holiday lands on a Tuesday, a traditionally slower day of the week. You may see Friday and Saturday sales actually beating 420.

      2. Order ahead (and delivery where permitted) will be game-changers for 420 this year. Customers may still be nervous about visiting a busy store, so offering additional ways to shop will positively impact your bottom line.

      3. Cannabis businesses will offer many discounts as always. But you should also focus on promotions that bring in new customers, increase basket size, and upsell on new products. It's not just about increasing customers, it's about increasing the value of each customer.

      4. The most successful dispensaries will start planning and promotions early. You'll need to capture those pre-event shoppers, and communicate early enough so those shoppers know where, when, and how to take advantage of your holiday offerings.

      In the following sections, you'll learn key strategies to prepare for 420 holiday retail challenges and maximize your business impact.

      1. Start your 420 promotions early

      Having a big sales day on April 20th is important, but it’s not everything. Retailers that truly take advantage of the holiday know that sales for 420 actually start weeks in advance.

      Regulars, medical patients, and others (myself included), may want to avoid the crowds and hoopla associated with the holiday itself and opt to pick up their products a week or two in advance. They know to stock up early, but will still be expecting to benefit from 420 specials and discounts — don't disappoint!

      420-cannabis

      Additionally, the 420 holiday attracts a lot of occasional users, who may only buy marijuana products once or twice per year, as well as brand new consumers looking to participate for the first time.

      You may see smaller sale amounts on 420 since the holiday attracts many occasional users, who may only buy marijuana products once or twice per year, as well as brand new consumers looking to participate for the first time.

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      In order to design and execute a strong marketing strategy, you need to get your 420 offerings in front of your customers as reliably as possible through high-engagement channels such as in-store advertising, online menus, word-of-mouth promotion, email, SMS, and social media.

      2. Create targeted specials

      Specials or discounts is a common tactic for dispensaries, but offering one-sized-fits-all discounts may not bring the expected outcome.

      Segmentation is a way to custom tailor the offers and messages that your customers receive. Start promoting in the weeks leading up to a holiday to maximize interest, keep your customers engaged with your brand, and improve word-of-mouth marketing.

      Your customers are more likely to be interested in your products when the offers you present are personalized based on information you already know and data that you have previously collected.

      Segmentation goes beyond the standard grouping of medical vs. recreational customers. Consider creating targeted 420 specials and pricing specifically for:

      • Loyal customers
      • First-time customers
      • Prior, low-frequency customers
      • Locals
      • Veterans
      • Employees
      • Friends & family
      • Military
      • Senior citizens
      • VIP (e.g. customers who have reached a spend threshold
      • Category of products purchased (e.g. flower, edibles, concentrates, pre-rolls)

      Segmentation offers many benefits, and allows you to be more efficient with your time, money, and resources by grouping similar audiences together rather than targeting individuals one by one.

      It also gives you the ability to:

      • Match your offerings to the specific needs of a customer group. If a customer traditionally purchases edibles, informing them about discounts on edibles during the 420 holiday period will make them more likely to buy from you.
      • Improve the reach of your word-of-mouth marketing. A customer that typically buys concentrates, likely hangs out with people that also buy concentrates.
      • Improve your understanding of your customer base as a whole. Offer products that appeal to your customer segments at your store specifically, not just what products are selling the best in the competitive marketplace.
      • Identify opportunities for upselling. A customer that traditionally buys flower can be upsold a greater quantity, higher quality strains, or other related offerings that can increase your average order value.
      • Understand what your customers can afford. By tracking average spend data you can discern how much disposable income certain segments might have available and use that information to offer higher priced products and improve your average order value during the 420 holiday retail period.
      • Consider "special" or exclusive offerings for your VIPs or loyal customers. To honor your existing customer base, and keep them loyal, focus on exclusivity, like offering an early access sale, swag, or additional savings.
      • Offer post-holiday specials to highly-targeted segments, like people who work at dispensaries. Taking an example from restaurants/bars, an "industry" discount can help to increase your market share with your local dispensary employees. You can offer as a one-time, post-420 discount, or a recurring deal.

      It’s not just about getting your products and offers in front of your audience, segmentation allows you to make sure that you are putting the right offer in front of the right audience. As an example, you could offer a “first-timers pack” or “420 virgin kit” that includes flower, a pipe, and a lighter to give new consumers a straightforward option.

      Get creative and have fun with your specials! It's 420, so why not play up the party?

      Dispensary best practice: When launching new 420 specials, always complete a few successful test transactions before the big day.

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      Once you’ve identified your target audience and compelling offers, be sure to build and test your specials on your point-of-sale software before you begin advertising. You don’t want to end up in a situation where the customer presents a coupon sent to them via SMS but it doesn’t work when they try to check out!

      It is our best practice recommendation to always complete successful test transactions when launching new specials to ensure a seamless customer shopping experience.

      3. Launch an omnichannel campaign

      "Omnichannel" sounds like a scary, all-encompassing superhuman concept but it's simply a cross-channel communication strategy where all messages are cohesive and integrated.

      Today’s retail customers are less channel-specific than customers in years past. They don’t mind, and in many ways expect, you to connect with them through multiple channels. They want to learn what 420 special discounts and events are happening through channels they already use like social media, text, and email weeks beforehand.

      Consumers average nearly six touchpoints with a company before buying a product.

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      Fifteen years ago, only 7% of customers used more than four touch-points with a company before buying a product. Today, consumers average nearly six touch-points. More than 50% of customers use more than four.

      Businesses that adopt omnichannel strategies achieve 91% higher customer retention rates year-over-year. However, 55% of companies have no cross-channel strategy in place.

      Retail cannabis stores should explore and test a range of different ways to get in touch with and inform customers in the weeks leading up to 420, including:

      • Email. It's the most common way for a retail store to reach out to customers before a big sale. Building demand through an email campaign with several touches weeks before, leading up to, the day of, and even after helps to keep you top-of-mind without overstaying your welcome.
      • Text message. SMS message open rates beat email by more than 4x! Additionally, response rates are nearly 7.5x higher than email. That's why text marketing should be a part of your 420 strategy. At the minimum, a text to promote your offers on the first day of deals would be appropriate. However, remember that text messages are seen as more of an interruption than emails and should be used more sparingly. Need a way to send email or SMS? Check out our cannabis partners.
      • Signage and TV menus. The biggest deals and discounts should be readily apparent to any visitor that enters your store. Every section should have a headline deal that you push to get customers through the door, along with a range of other offerings that you can use to upsell customers. Leverage strategically-placed printed menus or tablets as well as digital signage to help display 420 specials prominently.
      • In-store promotions. In-store promotion and social-distanced events (like free food, live music, giveaways, free swag, or community and charity activities) give customers an additional reason to choose your store on the big holiday. Even extended store hours on 420 can help boost your sales. Flowhub data shows 2 PM - 6 PM as the busiest time of day on April 20 by number of transactions. But if you stay open later than the dispensary across the street, consumers in a pinch will default to you.
      • Cross-promote with vendors. Vendors offering a shiny deal for the holiday? Work together to promote the offering in your own store. Set up a table for demos and give out free, non-medicated samples. Collaborating to spread the word about great prices and holiday-specific offerings works to your mutual benefit.
      • Leverage your loyalty program (if your state allows). For those that can provide enticing incentives, loyalty programs are a great way to increase average order value, customer return rates, and overall customer satisfaction. Flowhub’s point-of-sale software offers a built-in loyalty program with a rewards system, purchase history, and redeemable points for discounts and perks. To turn new customers into repeat visitors, sign them up for your loyalty program on 420.
      • Encourage word-of-mouth promotion. Excellent word-of-mouth promotion can make or break your 420 holiday retail outcomes. Train your staff to encourage customers to tell their friends about holiday deals and generate social interest as a cost-free way to promote your store. Friends don’t let friends miss out on dank deals, after all! Use creative tactics to increase word of mouth promotion. For example, "The password DankDealz = 20% off when mentioned on 420, tell your friends!"
      • Social media. Today seven in ten U.S. adults use social media. Younger audiences have an even larger presence. Instagram provides a simple and accessible way to get attention-grabbing products in front of your target audience. Make sure to share and tease 420 deals in the weeks leading up to the holiday. Improve visibility by using popular hashtags like #420, #cannabis, #stoner, #weed, #cannabiscommunity, #marijuana, #hightimes plus your location to target people in your area. Since Instagram (and Facebook), are more risky channels for cannabis, focus your efforts across platforms. Considered the most cannabis-friendly, Twitter and LinkedIn are growing for the industry.
      • Website and online menus. There is no better tool for informing your customers about the deals that you have to offer than your website and popular online live menus like Leafly, Leafbuyer, Wikileaf, iheartjane, or Olla. As you approach the day, launching a 420 deals page can help your customers separate your typical offerings from the deals that you are offering specifically for the holiday.

      A well-rounded, cross-channel approach can help you make 420 a defining success in your company’s history and set a new standard for future April’s as well.

      4. Find upsell opportunities

      420 brings a lot of occasional and first-time users into stores. Many just want to dabble and that often leads to smaller quantity and lower-priced purchases.

      The holiday also brings many active users in, often looking to branch out into new product categories. Your ability to upsell all customers will be critical to the overall revenue that you can produce day-of.

      First, make sure that all of your advertised deals are flanked by equally-enticing deals of a higher-priced product, located nearby or in the same display case as your headlining deal. Then, your floor staff can inform customers about the higher-quality product.

      Occasional users may be willing to spend a few extra bucks for a better experience — but you need your staff give them a nudge in that direction, otherwise most will stick with the original deal that caught their attention.

      Then, with the proliferation of new types of cannabis products, the 420 holiday is a great time to encourage customers to try something new, like edibles, beverages, or concentrates. Consider a discount to encourage additional product categories.

      420 dispensary shopping

      Additionally, you can help to increase your average order value by upselling accessories that can help them to enjoy the product. Selling pipes, bongs, rolling papers, lighters, or other smoking devices to a person that buys flower can help to increase average order value and ensure your customers have the best possible experience. A roach clip could help improve the experience for pre-roll buyers.

      Incentivize a higher volume of purchases and cart sizes by:

      • Offer an enticing freebie with purchase. Promote a doorbuster deal for free food, a t-shirt, or some other product to anyone who makes a purchase. Dispensaries should tread carefully since many state laws prohibit giving away cannabis for free. Typically, you can get around this by bundling products together at discounted prices. Erring on the safe side here. Buy something, get a slice of pizza for free? Yes, please.
      • Get staff excited. Encourage sales associates to interact with every customer, especially those who are visiting with friends or spectators with no intention of making a purchase. There’s a good chance these folks will be in good spirits for the holiday and are prime conversion opportunities, particularly if you are running relevant specials for first-time customers! Add some friendly competition into the mix by rewarding your top-selling 420 budtender with a special bonus or prize. (However, be aware of which incentives for budtenders are legal in your state.)
      • Provide flexible payment options. Make sure your ATM machine is stocked and working. The more convenient ways you allow customers to pay, the easier it is to complete transactions. Consider offering payment processing for dispensaries and start accepting cards at your store to increase conversions and spend.
      • Prioritize loyalty program signup. With more people moving through your store, many of them new, now is a great time to encourage loyalty program sign-ups. This will also help get those new shoppers back into your store after the holiday.

      5. Stock up on inventory

      Now is the time to ensure you have enough product on hand for the big day, and weeks preceding it as well. You don’t want to run out of a product that you have spent money advertising and you can’t have customers coming into your store to buy a specific deal only to learn it isn’t available.

      Review your internal data to evaluate what inventory you need to stock up on. Flowhub’s Executive Dashboard and sales reports allow you to easily learn what products are most and least popular, purchasing trends at each of your dispensary locations, which specials tend to be used most frequently, and more.

      420 top selling products

      Pro tip: Add top selling products and items on sale as “Featured Items” in Flowhub to make them easily searchable and more sellable.

      According to our own data, the 420 product category market share still leans heavily toward flower products, but concentrates and edibles remain highly sought after and beverages are emerging. Nearly 150,000 pre-rolls were sold on 420 weekend in 2019!

      Every dispensary has a unique customer base with their own unique preferences. However, understanding overall market trends can help you to know what deals to prioritize in your marketing and dispensary inventory management leading up to the 420 holiday.

      We predict top selling items on 420 will be instant-use products that are friendly to new consumers — think flower, edibles, pre-rolls, and cartridges. Make sure these are well-stocked and highly visible.

      420 Prediction: Top selling items will be instant-use products friendly to new consumers such as flower, edibles, pre-rolls, and cartridges.

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      While you’re at it, be sure to take advantage of Flowhub’s Par Level Report to confidently set product pars, know the minimum quantity of inventory you should always have on hand, and never experience stock-outs in your store again.

      6. Plan for security, compliance, and logistics

      The 420 holiday means a lot of hustle and bustle in most recreational marijuana markets. Retailers must be prepared for long lines, handling customer wait times, and providing more assistance to less experienced consumers who need help selecting the right products.

      Your challenge will be to stay compliant despite the busyness of the day. Throughout last 420 weekend, of all Flowhub customers using the check in app, 98% of ID cards were successfully checked in (the remainder were underage, expired, or suspicious IDs).

      Increased store traffic will present new challenges for your staff and security teams, but the potential upside for sales can be compounded by having a game plan and creating a streamlined check in to check out experience.

      Preparing for these hurdles now will help to ensure that your 420 is successful. Make sure that you have backup plans in the event that things go wrong.

      • Are you prepared to accept online orders? Now is the time to decide on an order ahead vendor, get it integrated with your POS, and train/hire staff.
      • What if the WiFi goes down? (If you need backup internet connectivity, Flowhub's mobile Nug scanner doubles as a Wifi hotspot so you can keep your lines moving.)
      • How will your security team handle the larger crowds in the store?
      • Will you need to bring on additional staff on the holiday to ensure a safe and positive experience for your customers?
      • Do you need additional terminals in your store to accommodate more shoppers? If you're doing orders ahead and/or delivery, plan for where those orders are fulfilled, assuming an influx of those orders.
      • How do you ensure you don’t oversell cannabis? Or that you verify the age of every person who shops at your store? What other compliance and marijuana laws should you be wary of? Go through our cannabis compliance checklist to find out.
      • What will you do if the line gets long or the store gets too crowded? (Hint: try our mobile Nug dispensary check in app with ID scanner and queue management. Cookies Melrose loves it!)

      Preparing for these eventualities will put your team in a position to deal with problems as they arise. Above all, make sure that you have a reliable point-of-sale solution. You can’t have dozens of customers in your store and no way to check them out!

      We go to great lengths to protect our customers against technical failures and keep their dispensaries and retail stores running smoothly. Not only that, our knowledgeable product support team has a 95% call answer rate and is available to help every day of the week, 365 days per year.

      7. Collect data to learn and improve your business

      The data that you collect on 420 has the potential to be more valuable than the actual revenue that you generate.

      On 420 (and in the weeks leading up to it), you’ll have many customers enter your store for the first time. You’ll have the opportunity to expand your customer databases, collect new data on returning customers, and use this data to bolster future campaigns.

      Make sure you have data collection architecture in place before April 20th. Set a goal for Key Performance Indicators like:

      • Customer conversion rate
      • Average wait times
      • Percentage of new vs existing customers
      • Total sales
      • Total transactions
      • Average order value

      420 recommendation: Track KPIs such as customer conversion rates, average wait times, percentage of new vs existing customers, total sales, total transactions, and average order value.

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      You can collect and analyze all this data and more with our cannabis POS, including Customer Source. If you aren’t tracking customer sources, this is a great opportunity to start measuring how specific marketing channels (like Instagram, word of mouth, or Leafly) impact sales.

      After the 420 holiday, most stores will inevitably have sold more of some products and less of other products than estimated. This means overages and shortages — you’ll need to quickly move certain products to make room for others, which means more discounts and opportunities to increase revenue even after the big day.

      Leveraging data that you collected on 420 can help you to quickly move excess inventory and grow relationships with first-time customers through post-holiday discounts, giving you a great reason to make a quick second connection and attract repeat customers.

      Light up your 420 strategy

      As the biggest holiday in the cannabis industry, April 20th, and the weeks surrounding it, present a huge opportunity for dispensaries, but it also some risks.

      You must have a solid marketing strategy in place, deploying weeks in advance of the holiday or else you'll get lost in the noise and lose business to the increasingly crowded competition.

      Retailers must also have the right systems in place to provide peace of mind and reliability during the most important business day of the year.

      Flowhub's point-of-sale and inventory management solutions can help cannabis retailers to prepare for and execute a successful 420 holiday.

      “Love this POS. It hasn’t crashed on us once yet, even on 420.”

      Vincent Lidie - Starbuds, CO

      Ready to learn more about how Flowhub empower dispensaries? Watch a demo.

      Happy 420!

      Anne Fleshman

      Anne Fleshman

      Anne joined Flowhub in 2018 to support the legalization movement and help cannabis businesses grow. Prior to Flowhub, Anne took Autopilot from startup to scale up and received her BA in Peace and Conflict Studies from UC Berkeley. Connect with Anne on LinkedIn.

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