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Brandi Cervella, Business Consultant - AdaptiveHR

What Does 4/20 Day Mean for CannaBusiness Owners?

Weed’s biggest day is also the most hectic for cannabis entrepreneurs. But if it’s done right, with the right support, it can be a massive boon for business owners. The industry has seen steady three-year sales growth surrounding the unofficial holiday of 4/20 — from about $87.9 million in 2018 to $175 million in 2021, according to a Statistica report.

But 4/20 in 2022 is different from the 1970s when it likely started. The ever-changing landscape of legalization and shifting public attitudes toward usage have created a brand new world for cannabis and those who sell it. Business owners can take steps to ensure they have the right systems, staff, and stock in place to capitalize on the holiday while staying compliant.

Read on to learn more about the history of 4/20 and how cannabis business owners can make the most of their own special holiday.

What is 4/20 day, and why is it on April 20?

Not an officially recognized holiday, 4/20 is a day dedicated to the celebration of cannabis. Explanations for how the day came to be celebrated on April 20 range from the plausible to the slightly absurd.

One popular theory suggested that 420 was once the California police or penal code for weed, but California’s current Penal Code 420 refers to obstruction of entry to public lands. A widespread myth is that April 20 was Bob Marley’s birthday, but his recorded birthday is February 6. Some have also said there are 420 active chemicals in weed, but while the Cannabis Sativa plant produces as many as 380 to 400 chemicals, about 300 of them are non-cannabinoids.

A more fun possibility comes from the writer H.P. Lovecraft. His 1939 short story, written with Kenneth Sterling, “ In the Walls of Eryx,” features “curious mirage-plants” that seemed to get the narrator high at about 4:20.

The most commonly accepted story, and the one Steven Hager, former editor of the cannabis-focused publication High Times shared with the New York Times, is that a group of Californian teens smoked weed every day after school in the early 1970s at 4:20 p.m. One of the original group members told a podcast in 2017 that they met up at that time to search for a mythical stash of weed buried in a forest. They never found it, but they set the trend in motion.

Regardless of how it started, their routine caught on. More students adopted the 4:20 ritual, and the number “420” itself soon became slang for smoking cannabis. Someone noticed that 4/20 is a day on the calendar, and the holiday was born.
4/20 Day: from counterculture to corporate

4/20 Day: from counterculture to corporate

Legal weed is a multi-billion-dollar industry, and it’s only expanding. The biggest cannabis companies hold market caps of more than $3 billion. Growing weed has shifted from backyards and basements to gigantic greenhouses managed by dozens or hundreds of professional staff.

As more and more states legalize cannabis and public opinion shifts favorably in its direction, 4/20 day has grown from a small counterculture movement to a commercial behemoth in the weed world.

While just four states still maintain full bans on cannabis, 4/20 Day looks different from state to state. In California, where it’s fully legal for any adult to purchase cannabis for recreational use, pot shops openly advertise blowout deals on weed. In a state like Texas, where only CBD (a non-psychoactive component of cannabis, commonly used for relaxation) is legal, business celebrations are much more muted.

Activists pushing for legalization — either federally or in their state — also use the holiday to promote their cause. The biggest 4/20 Day celebrations feature major celebrities like Snoop Dogg and huge industry events like the Cannabis Cup.

Even in areas where cannabis isn’t legal, police often tolerate 4/20 celebrations rather than making mass arrests. Before Canada legalized weed in 2018, Vancouver played annual host to a giant illegal gathering where weed cookies and joints were sold openly in the middle of the city.

And some cannabis enthusiasts find different ways to celebrate. A Tennessee owner of a CBD and hemp owner rolled a 150-foot-long joint, containing no cannabis or marijuana, which were illegal in the state.

4/20 Day in the Business Landscape

For cannabis business owners, 4/20 Day is no simple holiday. It’s potentially the most important — and stressful — day of the year for weed entrepreneurs. Ever-changing state regulations make compliance a regular challenge for cannabis businesses. And on 4/20, they’re hoping to see a long line of customers all demanding access to top-shelf products at once.

Increased demand and doubled sales

Every industry knows its biggest shopping day. Naturally, businesses turn to holiday tie-ins as a great time to promote products and drive sales. Just as beer companies ramp up promotions around St. Patrick’s Day, cannabis outfits offer deals to consumers close to 4/20.

Mehul Patel, CEO of Chicago-based MSO PharmaCann likened marijuana sales 4/20 to beer sales during Oktoberfest, in an interview with Marijuana Business Daily. According to that same article, cannabis businesses report an estimated 30% to 50% bump in sales on and around 4/20. A Seattle-based data-analytics firm, Headset, estimates sales on the unofficial holiday typically double compared to the four weeks prior.

States that reported to Headset’s study — including California, Colorado, Michigan, Nevada, Oregon, and Washington — saw in 2021 a 183% increase in beverage sales, a 152% increase in concentrates, a 132% increase in edibles, and a 135% increase in flower sales over an average week.

Businesses should be prepared to sell more of what they typically sell during the rest of the year, and they might also look to the holiday as an opportunity to highlight new products. Savvy cannabis companies keep good track of which products sell well at their store throughout the year and plan to stock more of the popular strains and products to have on hand in April.
Businesses should also plan to have plenty of staff help ready. Foot traffic will likely increase compared to an average day. Many businesses and dispensaries plan events aimed to draw crowds, which will also require additional staffing. Raul Molina, CEO of Mint Cannabis, told the Cannabis Business Times that taking good care of employees during this time especially is a top priority.

Changing legislation and public opinion

As with the celebrations, business opportunities related to marijuana and 4/20 will likely expand in the coming years.
The Marijuana Opportunity Reinvestment and Expungement Act — or MORE Act — has passed the U.S. House of Representatives. The bill would decriminalize cannabis across the States and expunge the criminal records of many people arrested for weed-related crimes.

A Pew Research poll from 2021 found that 91 percent of American adults believe cannabis should be legalized. As many as 60 percent favor recreational weed, while 31 percent believe only medical marijuana should be legal. Just 8 percent of respondents said it should remain illegal.

Cannabis business owners are naturally among the first to learn about changing laws, but keeping up with the ins and outs can be a challenge. Ensuring compliance at every turn is key to business growth and safety, and many business owners choose to partner with established, reliable partners to ensure they can adapt and grow as the laws do.

Preparing for the future of 4/20

The cannabis business doesn’t revolve around single-day sales. Having the right systems in place to capitalize on widespread 4/20 celebrations helps businesses make the most of the holiday, but those systems drive and support business health and growth the other 364 days of the year, as well.

A smart HR partner solution can help cannabis business owners navigate the tricky, free-flowing world of cannabis laws to help them stay compliant to avoid serious penalties and turn their focus on making their business as successful as possible.
Prioritizing smart solutions specifically developed for cannabis businesses, AdaptiveHR provides a fully integrated and customized solution for risk management and payroll, human resources, employee benefits, and 401k retirement solutions. All of these services can scale easily for future growth.

Services include:

● Risk assessments and insurance claims review
● Claims advocacy/reporting
● Fully insured “pay-as-you-go” workers’ compensation coverage
● State and federal reporting
● On-site loss control study
● Hazard assessment
● On-site safety reviews
● Loss control studies
● Safety consulting services
● Online safety training
● OSHA compliance assistance

That means one single, dedicated partner with deep industry experience, cutting-edge technology, and world-class service that enables each cannabis business to pass along world-class service to its own customers every day of the year.

Give us a call today or reach out to schedule a consultation and learn how your cannabis business can benefit from AdaptiveHR.