Expert says selfie factor likely behind Day 1 demand
Marketing professor Harold Simpkins was shocked to see the lineups outside the SQDC cannabis stores so early in the morning on Day 1 of legalization.
No one could have predicted it, he said — not the Société québécoise du cannabis, not even him.
“One of the most difficult things in business is predicting what initial sales would be,” said Simpkins, the Academic Director of the Marketing Co-op Program at Concordia University’s John Molson School of Business. “It’s rocket science to do it accurately.”
He himself has launched products and been wildly over- or underwhelmed by the demand, he said.
In the case of the SQDC, they also didn’t have much on which to base their predictions. No similar product has been launched in Canada — or any other G7 country — ever.
On a macro basis, it’s estimated Quebecers consume 180 to 200 tonnes per year.
The SQDC has contracts with suppliers to buy 60 tonnes this year. Therefore shortages are expected at some point.
“But on a micro-basis, which is Oct. 17, trying to predict how much you will sell on that particular day is a real crap shoot.”
Simpkins believes the run on the SQDC, which at one store, saw them run out of Pink Kush and oral spray and call police to disperse those left empty-handed at closing time, is due to the novelty factor.
Instead of sleeping in and calling their regular suppliers, large numbers lined up to be the first people at the first cannabis stores on the first day the legal variety was available.
“Here I am with a selfie at 7 a.m.” Simpkins said. “We’ll call it the novelty factor and maybe they wanted the bragging rights that go along with being among the first.”
Simpkins wondered what it was like when Denver sold its first grams of recreational marijuana, on Jan. 1, 2014.
According to media reports, it was pandemonium. Lines snaked around buildings, well after 8 a.m. when stores opened. Dispensary owners pleaded with the media to stay calm. One man and his son drove from Georgia and camped overnight in their van outside a store to be among the first in line.
The first person to legally purchase pot was an Iraq war veteran who suffered from PTSD, reports revealed. He paid $40 (U.S.) for 3.5 grams, plus $10.46 in sales tax.
As for whether demand persisted beyond first days, the Colorado Department of Revenue said the first few months of legal recreational marijuana in Colorado were somewhat sluggish, as customers continued to buy more medical marijuana. But by the end of the year, recreational marijuana sales had surpassed medical marijuana sales. Then in 2015, the marijuana market grew by almost 50 per cent, then 30 per cent in 2016, and 15 per cent in 2017.
Simpkins believes that in Quebec, where medical dispensaries are few and far between, sales will be “very very robust.”
“Will the fact that it’s now legal and available, and the quality is guaranteed and consistent, increase the number of users and usages? Will a casual user use more because of this? That would have a tremendous impact on demand,” Simpkins said.
He could not explain the gender imbalance seen in front of cannabis stores, where roughly 10 men lined up for every woman. But he quoted one woman’s theory:
“She thought women smoked as much as men, but it was the men going out to do the shopping,” Simpkins said. “It’s virgin territory.”