Impact of COVID on Vape Market: A Quick Recovery and a Changing Market
The COVID pandemic has left a strong impact on all of our day-to-day lives, changing the course of peoples’ plans and lifestyle, with impacts that could carry on for years. The pandemic has impacted everyone, yet one of its largest impacts has been on the decision-making process for business-owners and investors. As the world inches forward towards the recovery stage, every business venture must carefully take account of the impact of the pandemic on their own market positioning, and understand the implications that this has for the future of the industry. The cannabis vaping industry is certainly no exception. The following overview is meant to provide a broad understanding of how the COVID pandemic has impacted the vape market since it began in Winter 2020, and the implications for those invested in the industry.
The Beginning of the Pandemic: A Brief Dip
The first stage of impacts that the COVID crisis had on cannabis vaping consumption, and cannabis consumption in general, was to cause a sharp decline in consumption for a small period of time. In particular, the time in the United States when consumption saw a strong dip coincided with the beginnings of the initial lockdown periods in many states, lasting until around the time when the public received their first stimulus cheque. For example, in four of the states with legal cannabis consumption for adults, California, Washington, Colorado and Nevada, consumption of cannabis products, cannabis consumption dropped by around 50% for the month of March, after quickly recovering to their pre-pandemic levels (Long, 2020). As people were stuck inside during the very beginning of the pandemic, their consumption habits went through a shift and the market had to adjust. However, while this quick decline was short-lived, some patterns continued to persist within the industry that extended past the initial decline.
Stimulus Cheques and the Industry Rebound
The market quickly recovered in the following months, spurred by stimulus cheques that were injected into the economy. Cannabis companies in the major US states for legal cannabis have benefited from favorable treatment from state governments, gaining designation as “essential businesses” and thereby gaining the ability to counteract the initial shock to the market (Long, 2020). Indeed, a survey has found evidence that consumption patterns may be increasing, with 53% of respondents reporting that they have increased their cannabis consumption since the beginning of the pandemic (Karakatsanis, 2020).
Moreover, this recovery has been aided by changing patterns in purchasing and consumption. In terms of purchasing habits, one major shift that has been observed is that customers have been making fewer actual purchases, each of greater basket size, potentially due to wishing to reduce their level of contact (with positive implications for e-commerce businesses in the sector). Indeed, there is evidence that consumers are in fact moving towards online purchases, with one survey finding that 39% of respondents reported purchasing their cannabis products online during the pandemic, compared to 26% before it started (Karakatsanis, 2020). It is likely that this has the potential to lead to a permanent shift in the industry, as people become accustomed to the convenience of online purchasing.
Commenting on a related trend, Tom Brooksher, CEO of Clear Cannabis, had this to say: “In general, we’re seeing strong brands – high quality products with name recognition – holding their own or even growing during the pandemic, and weaker brands struggling or potentially failing (Dorbian, 2020).” Customers are placing a higher emphasis than ever on product reliability and brand comfortability.
Finally, cannabis consumption patterns during the pandemic have taken a turn towards vaping, demonstrating the potential to lead to a lasting shift in market share towards vaping compared to other methods of consumption. According to the survey conducted by Karakatsanis (2020), the number of respondents reporting vaping as their main method of cannabis consumption rose from around 56% before the beginning of the pandemic to over 73% since the pandemic began. Cannabis users are flocking more than ever before to vape products to meet their cannabis consumption needs. The same study also gives some insight into why this is the case, finding that 20% of all respondents changed their consumption method due to health concerns. The COVID crisis has led to heightened awareness of respiratory health issues, spurring what may turn into a permanent shift towards vaporizers within the coming decade.
Into the Trends: Going Deeper
So what are further implications are there for the cannabis vaping industry, beyond the recovery of the general cannabis market and the trend towards increased vaping use as a percentage of cannabis consumption? As described previously, there is a trend towards online purchasing, demonstrating the huge potential for growth for cannabis vape e-commerce businesses. However, the trends in the industry go much deeper than a general trend towards growth.
One trend that there is starting there is a trend towards personal vaping devices rather than sharing devices between people, which is predicted by some to extend past the time of the pandemic, as there is a higher general awareness of the spread of germs and viruses. In other words, there may be a permanent shift in vaping culture away from vaping “sessions” with friends.
These changes have important implications for producers of vaping products across the industry. For example, as stated by Courtney Smith, CEO and founder of DaVinci, “We recognize the need for personal vaporizers, especially in a time when cannabis consumers are shifting from a culture of sharing devices to more individual consumption (Dorbian, 2020).” Now more than ever, the vape pen is becoming a personal accessory that is meant to fit in with each individual’s taste and style, rather than simply a method of consuming cannabis that is meant to be shared among many people.
The market has experienced great changes over the last year and a half, yet many trends remain the same. As with many economic trends that have arisen during the pandemic, the market shocks do not necessarily lead to the appearance of completely new trends, but rather have led to the acceleration of trends that have already existed before the pandemic. In any case, it is clear that the cannabis vaping industry is positioned for explosive growth over the next 5 to 10 years, as well as a trend towards personal use devices and towards higher personalization of devices. Staying ahead of trends is essential for any business, especially one in such a young and rapidly changing industry as the cannabis vaping industry. The COVID pandemic has led to enormous challenges for every business, but as the world begins to gradually go back back to normal, consumers are ready for the next big vaping brand to capture their attention and loyalty.