Ben Kovler, founder and CEO of Green Thumb Industries, a Chicago-based cannabis company with operations in 12 states, is gearing up to sell more marijuana than ever this summer.
Kovler cut a ribbon Wednesday to commemorate the expansion of GTI’s 250,000-square-foot production facility in Oglesby, Illinois, where his company grows premium cannabis flower, manufactures pre-rolled joints, manufactures THC-infused edibles, and operates a cannabis beverage line. Right before Memorial Day weekend, with Covid-19 restrictions easing across the country and nearly half of Americans now vaccinated, Kovler says GTI is focused on producing enough product to meet what will be a summer-long surge in demand.
“The Roaring Twenties are still going strong,” Kovler declares. “The demand is unprecedented, and we are supplying it—nothing fancy from us.”
The cannabis industry experienced record-breaking consumption throughout the pandemic. Americans spent $17.5 billion on marijuana in 2020, a 46 percent increase over 2019, and Cowen estimates that legal marijuana sales will reach $41 billion by 2025. However, as the economy begins to recover, the cannabis industry is experiencing another demand surge. “People also want to consume during periods of high energy—a it’s tidal wave of demand,” Kovler explains. “Now that the sun is shining, people are reconnecting with friends they haven’t seen in years following the pandemic. The American experience is being transformed by cannabis.”
According to a new report published by BDSA, a cannabis sales tracking and analytics firm, Memorial Day weekend will bring “blockbuster sales” to dispensaries across the United States, kicking off a record-breaking summer of cannabis sales. Holiday sales are expected to increase 25% in mature markets such as Colorado, which legalized adult-use in 2014, and more than 30% in newer adult-use markets such as Illinois, according to BDSA.
“We anticipate that this weekend will herald the start of an unprecedented summer of cannabis sales across markets,” says Jessica Lukas, senior vice president of BDSA. “Consumption will increase as more people become vaccinated and prepared to have a good time.”
The pandemic’s combined effect with the addition of new state-legal cannabis markets sparked a cultural shift in America, with more people using marijuana more frequently. “It’s developed into a new habit,” Lukas explains. Already this year, more people in the United States are consuming marijuana than in 2020. Around 43% of Americans in states where adult use is legal now use marijuana, up from 36% last year, according to BDSA data. Residents of states such as California now use cannabis at a rate of 45 percent, up from 33 percent in 2020. Massachusetts, Florida, and other states with legal programs have seen similar trends.
On a daily basis, 67 percent of consumers who smoke or vape cannabis now do so. For those who prefer edibles, a form factor that aided many Americans during the lockdown, BDSA discovered that 50% of those consumers pop gummies daily.
Americans are eager to leave the house, but cannabis delivery companies anticipate continued growth. According to Khaled Naim, CEO and co-founder of Onfleet, a San Francisco-based delivery management software company that powers tens of thousands of cannabis deliveries daily, order volume has not dwindled.
“I anticipate this summer to be the most successful yet for cannabis and other segments such as alcohol,” Naim says. “Our volumes continue to increase: May will be our busiest month to date.”
According to Naim, consumer adoption of delivery increased significantly during the pandemic, and he now anticipates that up to 90% of new business will remain. “People have grown accustomed to convenience,” he explains. According to Naim, cannabis orders are already up 25% to 30% year over year in 2019.
Co-founder Damon Crain is on a buying spree at Doobie Nights, an experiential dispensary in Santa Rosa, California, in anticipation of a strong summer sales season.
“We are adequately stocked,” Crain states. It was difficult to find flower last summer due to increased demand and scarcity caused by the time period between the late spring and fall outdoor cannabis harvests. “To prepare for the season, we’re purchasing as much flower as possible.”
Everyone appears to be making an effort this summer to have a good time. However, Kovler asserts that it will be “boring” at GTI, where he anticipates spending significantly more than $100 million on new manufacturing facilities and expansion into new states such as New York and Virginia.
“This summer is not crazy at GTI—it is the summer of execution for us,” he explains. “This is a rather unappealing tale.”
