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Addressing Deceleration In U.S. Cannabis Sales, Headset Says Pandemic-Driven Surge Was An Anomaly

December 28, 2021

The onset of the pandemic last year gave cannabis sales in the U.S. a temporary sugar high that’s now receding somewhat, according to new research. Cannabis market researcher Headset examined trends in the five most established recreational cannabis markets—California, Colorado, Nevada, Oregon, and Washington—which have all had adult-use sales up and running since at least 2018.

“We find that sales are slowing in legacy markets, but argue that sales are simply returning to pre-pandemic levels,” Headset noted in its report. “The remarkable growth that was seen in 2020 was unlikely to be sustained because it was achieved under the unusual circumstances of a global pandemic. Sales in 2020 should be treated as an anomaly and properly adjusted when used both for forecasting the future and measuring present growth to avoid the base problem.”

While the report considers a number of behavioral trends to account for the recent slowdown, like a general return to public venues where cannabis consumption is prohibited, perhaps its most compelling evidence is a week by week graph of cannabis sales. There was a nearly 40% drop in mid-March 2020 as pandemic lockdown began, followed by a jump to nearly 40% above the baseline that coincides with the first pandemic stimulus check going out. Labor Day 2020 provides the next big spike, followed by another that corresponds to the second stimulus check, and yet another jump to 25% above the baseline for the third check.

Sales have struggled to reach above the baseline since Memorial Day 2021 as states began cutting enhanced unemployment aid, and have dipped further since September when the federal pandemic unemployment supplement was allowed to expire. The trend is remarkably consistent across all five states considered.—Danny Sullivan

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