Despite a global pandemic that’s decimated Nevada’s tourism industry, the state’s adult-use cannabis market is booming.
Increased cannabis spending among both residents of Nevada and tourists pushed adult-use sales to a new high over the summer, a welcome development for a market that saw sales plunge in the early months of the coronavirus pandemic.
“For the time being, it’s also a positive indicator for the cannabis industry as a whole, as it’s another sign that demand for cannabis grows amidst periods of economic duress.”
Adult-use cannabis sales set new records in June, July, and August, reaching $56.6 million, $70.2 million, and $75.6 million, respectively. In total, sales in the summer of 2020 outpaced summer 2019 sales by 28%, despite the number of visitors to Las Vegas – the largest cannabis market in the state by a wide margin – falling by 63%.
The data clearly shows residents of Nevada substantially increased spending on adult-use cannabis since the pandemic began. Collectively, sales of adult-use cannabis in the 14 counties outside of Clark and Washoe – where tourist-heavy cities like Las Vegas and Reno are located – hit $2.8 million in January 2020, for an average of $8.06 per resident. By August of 2020, per-resident cannabis spending in these counties nearly doubled, reaching $15.84.
The data also point to a rise in cannabis spending among tourists during the pandemic.
Based on cannabis sales data for Clark county – the county where Las Vegas is located – and the number of monthly visitors to Las Vegas, the average visitor spent approximately $12 on adult-use cannabis per month prior to the pandemic. From June through August of 2020 that figure rose to approximately $39 per visitor – more than a threefold increase.
However, that doesn’t account for the fact that residents of Las Vegas – just like residents of other counties in Nevada – likely raised their cannabis spending during the pandemic as well, meaning not all of the sales gains can be attributed to tourists.
Though the degree to which tourists have increased their cannabis spending is somewhat less clear, there is data that suggest the tourists who continue to visit Las Vegas amidst the pandemic are relatively more freewheeling. For example, in January and February of 2020, the average Las Vegas tourist spent $161 gambling on the strip. From June to August of 2020, that number rose to an average of $220 – a 37% increase. (This is according to the Las Vegas Convention and Visitors Authority.)
What remains unknown is whether the uptick in sales is driven by increased consumption among existing cannabis consumers, new consumers entering the category, or a mix of both factors. There are clues, however, that existing cannabis users are boosting consumption. Across adult-use markets – including Michigan, for example – flower’s share of sales has risen considerably, a category not generally thought of as an entry point for new consumers.