Lollapalooza Gives Downtown Chicago Cannabis Stores High Touch
This story was reprinted from Crain Chicago with permission and written by John Pletz.
Amid fears that inflation elsewhere will eat away at the grass, Lollapalooza is proving a reliable player.
Lollapalooza has delivered another summer pick-me-up to downtown marijuana stores.
PharmaCann and Cresco Labs (OTC:CURLF) report record sales at their River North stores during the four-day music festival that ended Sunday. David Chiovetti, chief commercial officer of PharmaCann, which operates a store near Clark and Superior streets, said sales were up “double digits over last year.” More people entered and people spent more.
The cannabis industry is grappling with falling weed prices and fears that inflation will encourage customers to spend less or opt for cheaper products.
Cresco Labs said overall sales at its Sunnyside retail store at 436 N. Clark Street were up from a year ago and it was posting record volume. “Cost per product was down slightly from last year’s prices, but we made up for it with more transactions and more products per transaction, making it a winning festival weekend,” a doorman said. -word.
At Dispensary 33, which operates a store in the West Loop at 1152 W. Randolph and another on the North Side, a spokeswoman said, “We’ve had a nice uptick in new customers. It was a solid weekend at both stores.
Lolla has proven to be a reliable performer for marijuana stores. The boost is even more welcome this year. Cannabis stocks are in freefall, with many down 50% or more for the year, compared to a 14% drop for the S&P 500 index.
Research firm Cowen recently halved its US growth forecast, expecting sales to rise 6% this year. The steepest declines are occurring in older, less regulated markets, such as California and Colorado, where prices have fallen amid rising supply.
Illinois and Michigan, which are newer markets, continue to grow. “While price deflation has been a feature of these markets, the positive growth reflects the benefits of better foot traffic and volume purchases, which offset the headwind to revenue growth from price/ negative mix,” Cowen analysts said in a research note.
Illinois, which has relatively few stores and has yet to see many new growers begin harvesting product, has the highest wholesale pot prices in the nation, according to research firm Cannabis Benchmarks. Marijuana sells for around $3,400 a pound in Illinois. That’s down from around $4,100 in October, but it’s still triple the national average of $1,047 a pound.
Overall, Illinois cannabis sales have fallen 2% in each of the past two months and have hovered around $4.2 million a day. The state hopes for a recovery as newly licensed stores begin to open, but a noticeable impact may not occur until next year.