By Jeff Bess, second-year student at the University of Washington School of Law.
As Thanksgiving 2015 approaches, the unexpected effects of state-legalized cannabis are most salient in Oregon. As bargain shoppers in the state are prepping for the Black Friday gauntlet, a group of recreational cannabis dispensaries are getting into the consumer action with deals of their own.
On Friday, November 27, more than twenty dispensaries in Oregon will host a “Green Friday” event that advertises a quarter ounce of cannabis flower sold for $20 to recreational customers over the age of 21. Despite some concern over an oversaturaturated cannabis market, the Green Friday deal represents a discount that is at home in the ecosystem of Black Friday door-buster advertisements. Green Friday deals apply to one hundred pounds of cannabis that have been distributed to participating dispensaries; once that inventory is gone, the deal is finished.
Though comprehensive data is not readily available, a review of the online menu for Bloom Portland, a popular dispensary participating in the Green Friday deal, suggests that customers may save from 56% to 75% per quarter ounce of cannabis, based on a $45 to $80 non-sale price (depending on strain). Though Oregon’s Green Friday is not the first instance of recreational cannabis retailers participating in Black Friday (a number of Colorado dispensaries offered more modest discounts in 2014) it is the most aggressive.
So, what is the takeaway for cannabis retailers, recreational users, and medical patients in Oregon and beyond?
- Get ready for Green Friday to become a “thing” in state-legal markets: With commercialization and professionalization comes service to consumerism. As conventional sales tactics continue to seep into the state-legal cannabis industry, expect to see more crossover between the kind of deals seen in recreational cannabis and other retail sectors. This means the expansion of Green Friday promotions and/or the integration such sales into the broader Black Friday landscape.
- The price of recreational cannabis in Oregon remains fluid: At least until Oregon imposes a sales tax on cannabis, there is great fluidity in the Oregon cannabis market (which, as explained above, more than meets legal demand) that benefits established players in the market. Especially as more retailers enter–and others exit–there will be increasingly intense price competition among retailers that aim to displace existing black and medical-exclusive sellers. The Green Friday promotion illustrates how market power can be leveraged by a relatively small number of players to change the market and provide lower prices to consumers.
- Take it easy–after all, it is Thanksgiving: Despite their entrée into the world of Black Friday sales, Green Friday retailers discourage the common “gotta-have-it” endurance-testing Black Friday tactics of consumers:
[A]rrive early. But not too early. Sleeping overnight on Thanksgiving night, on the sidewalk, to obtain a deeply discounted quarter isn’t the best call, on several levels. And to avoid Black Friday style bad manners, be cool. No cuts, pushing, etc. You know how to behave, so behave.
In sum, as state-legal cannabis businesses expand, expect to see more and more congruence between their marketing strategies and those of mainstream, established businesses. As the actions of Oregon dispensaries demonstrate, there is a marked willingness among stakeholders to enter the Black Friday scene on the same terms as mainstream retailers. The extent to which they are successful may set the tone for future years and provide valuable insights to cannabis businesses in less mature state-legal markets seeking to maximize profits.