September adult use sales in Illinois surpassed $120M as $1B mark nears with YTD sales up 131% versus the same period last year.
The Illinois cannabis market is booming. Adult-use sales alone have exceeded $100M for the seventh month running, and the state is set to eclipse $1B in adult-use sales by year’s end.
“Out-of-state resident sales” nearly half of in-state total
Surrounded by states with limited (or virtually nonexistent) cannabis programs, the Land of Lincoln will continue pulling in substantial dollars from its neighbors. Wisconsin Gov. Tony Evers (D) famously expressed his feelings on the issue, saying he was tired of getting flak from Illinois Gov. JB Pritzker (D) about it: “Whenever I get with [Pritzker], he thanks me for having Wisconsinites cross the border to buy marijuana.”
But it isn’t just tourists, Hoosiers, and conventioneers getting into cannabis in Illinois. For cannabis brands outside the Land of Lincoln, a market set to blow past the $1B mark again in 2021 makes for an obvious expansion opportunity. A recent exchange with an industry-leading brand from the West Coast illustrates how new entrants are engaging with the Illinois consumer.
LOWELL SMOKES LANDS IN LOCAL DISPENSERIES
George Allen, Chairman of the Board for Lowell Farms, described how an iconic brand from California views the opportunity. Allen was kind enough to share his thoughts in a recent email exchange.
Savvy cannabis smokers in Illinois have been delighted to discover that, through a licensing arrangement with Ascend Wellness Holdings, the iconic Lowell Smokes pre-roll pack has appeared in select Illinois dispensaries. Lowell Farms announced the arrival in August and in the subsequent weeks Smokes have reached more dispensaries beyond the eight initial locations at launch.
In a recent email exchange, Lowell Farms Chairman George Allen shared the following on the company’s perspective on cannabis in Illinois and Lowell’s approach to launching its renowned Lowell Smokes brand into a new market. The comments below have been edited for clarity.
High Yield: Knowing that the IL market is big and getting bigger, apart from that – is there anything about IL that looks especially attractive?
George Allen: It is an important moment in Illinois, Cannabis is recently legal recreationally and we want to be there to share that moment with consumers. It’s a magical time of discovery and exploration and we didn’t want to miss it. We want to build and learn from that moment and make sure consumers there get to contribute to the legacy of Lowell Smokes.
HY: What are your views on the Illinois market compared to Lowell’s “home” market?
GA: Selection is far more limited than California. Illinois is an oligopoly market that tends to limit selection and make pricing less consumer-friendly.
For those seeking more information, Headset published data on this pricing issue in a recent report on the Illinois market. The data can be found in “A high-level overview of the Illinois cannabis market” available with registration on the Headset site.
HY: Based on how dispensaries operate in IL, what changes – if any – did you make to your retail strategy?
GA: The budtender is the gatekeeper and the educator. As in California, we spend a lot of time making sure they know how much we care about quality.
HY: What messaging to dispensary operators about your brand has been most effective?
GA: Quality. We don’t cut corners, ever. That is critical, it builds trust and confidence.
HY: What is it about the consumer experience in Illinois that might be the most challenging for you?
GA: It’s getting crowded and our price point is higher than some competing brands. We sell an all-flower pre-roll and this is the exception in Illinois. Once the consumer is informed and knows the difference, they wouldn’t settle for less, but it is an education process.
HY: What do you think Illinois consumers will find most interesting when your products “hit the shelf”?
GA: The brand invites the curious, even those that are not comfortable or familiar with cannabis. When you have a pack of Lowells, you had better be prepared to share.
While Lowell Farms is hardly the first to grasp the importance of educating budtenders and fostering brand advocacy, the brand brings to bear several advantages. The equity of the Lowell Smokes brand is such that local connoisseurs took note of where and when the packs would hit the shelf.
Other brands seeking a foothold in new states might not be able to demonstrate the same degree of hometown support by way of sales, but the world of social media followers and micro-communities can do just as well, if not better among younger consumers, from a strategic perspective. The brand’s status in California also lends a degree of authenticity amidst the many “store brands” that make up a significant portion of the prerolls category in Illinois.
Lastly, on an issue that any brand entering a booming market like Illinois can leverage, innovative new products (such as Lowell’s “whole flower” preroll) will draft off not only the growth of the market but also the growing sophistication of the Illinois consumer.
