Business

Canna-Tourism Could Boost Calif. Economic Recovery: Report

By Willis Jacobson
Dec 15, 2020
Photo by David Gabrić on Unsplash

Cannabis tourism in California could help the state’s overall tourism industry bounce back from the COVID-19 pandemic, according to a report released this month by the California Cannabis Tourism Association (CCTA).

The “State of Cannabis Tourism 2020” report, which was developed in partnership with multiple data firms, suggests ways canna-tourism can shift and rebound in 2021.

“Rather than wondering when tourism will ‘return to normal,’ perhaps a better question is, what will the new normal of tourism look like?” the report’s introduction states.

“We believe that the ‘new normal’ for post-COVID tourism will be a bit greener,” it later added, “and not just in terms of sustainability.”

Among the report’s findings:

  • Overall visitor spending in California in 2019 totaled nearly $145B, generating $12.2B in state and local tax revenue. The 2020 projections show a steep decline, with overall visitor spending expected to fall to $66B, with just $6.4B contributed to state and local taxes.
  • Cannabis tourism was growing prior to the pandemic, driven largely by personalized small-group experiences, outdoor activities and rural destinations. Those are expected to become more desired in overall tourism, post-COVID, which has the cannabis industry positioned to perform well.

Around 29% of all active leisure travelers – about 18% of American adults – are interested in cannabis-related activities while on vacation.

  • California is the legal-REC state these travelers are most interested in visiting, according to a survey of 1,500 such travelers. Nevada and Colorado were tied for second-place, with Alaska and Washington rounding out the top five spots. 
  • When asked what cities they were most interested in visiting, respondents listed Las Vegas, San Diego and San Francisco as the top three.
  • Interest in a cannabis travel experience is strongest among Millennials and those in Generation Z.

The report found cannabis sales trends differ between tourist and non-tourist destinations.

  • So far in 2020, stores in tourist areas have seen edibles account for about 15% of sales, while edibles account for just 11% of sales in other stores. This could be due to edibles being one of the most approachable and portable product types, which can appeal to inexperienced consumers.
  • Vape pens, the second-largest product category by sales in California this year, were sold at an almost equal rate (24%) in tourism and non-tourism areas. But all-in-one disposable vape pens, considered tourist-friendly because they’re portable and discreet, sell at a far-higher rate in tourist areas.

The report’s authors interviewed operators in the cannabis and tourism space to gauge concerns going forward. Financial recovery was the top concern, but almost all interviewees worry that psychological factors could dampen business.

  • Operators expressed concern that it will be a long time before people feel comfortable gathering in groups and participating in tourism activities, even after the distribution of a coronavirus vaccine.
  • Operators also fret that a lack of regulatory clarity regarding events, consumption lounges and other cannabis-related tourism can negatively impact the industry’s post-COVID growth.

While the overall tourism industry remains in a state of flux, canna-tourism has an opportunity to aid in recovery and carve out its own space, the report concluded.

  • “All of the data sets point to great economic and business possibilities for cannabis tourism, including interest from a wide swath of the public, proven sales data and a cadre of innovative businesses waiting to heed the call,” it stated.

Data firms Enlightn Strategies, MMGY Travel Intelligence and Headset contributed to the report.