Cannabis tourism could pick up as US citizens travel more domestically — here's how entrepreneurs can capitalize on the trend
Cannabis tourism, where customers seek out experiences and travel centered around marijuana, is an emerging industry that experts believe will only continue to grow post-pandemic. Colorado saw spikes in dispensary sales after March and April, outperforming past year's figures and proving that cannabis businesses can survive even the toughest economic environments. Entrepreneurs looking to capitalize on the trend should focus on market awareness and proper protocol. Michael Cohen, founder and president of The Pass, which operates out of The Berkshires, sees potential in places where cannabis is less thought off, such as outside Colorado and California. Visit Business Insider's homepage for more stories.
Cannabis tourism, or travel and experiences influenced by the legalization and use of marijuana, is a market full of promise that now finds itself in a space rife with change due to COVID-19. Yet several experts in the field believe that it will continue to show promise going forward. Particular early adopters of cannabis reform laws have already seen the benefits of a tourism market. Colorado, which passed adult-use laws in 2012, considered legal cannabis a significant part of its tourism market by 2015. That year, a report commissioned by the Colorado Tourism Office found that marijuana laws influenced nearly half of potential travelers to the state, although a revised version of the survey corrected the figure to 23% of visitors. A 2020 survey by MMGY Travel Intelligence and Enlightn Strategies of 1,5001 respondents interested in cannabis travel found interests in a range of activities, from visiting a dispensary to consuming various products. Additional experiences mentioned include CBD spa treatments, infused dining, cannabis bus parties, and guided tours. The survey went on to forecast that those interested in marijuana-related vacation activities make up 29% of all leisure travelers, with Americans comprising 18% of that pool. Alex Levine, chief development officer of Colorado's Green Dragon dispensary brand, reported that Colorado's tourism market continued growing over the years. Levine said company activity across its 15 locations in the state revealed that most cannabis tourism activity occurred in the Denver area with its guided tours, consumption buses, "bud and breakfasts," and other events. "Although there are a lot of tourists in Colorado's mountain towns, those travelers are typically not on cannabis-forward tours," Levine said, adding that many tourists still do purchase cannabis while on their trips outside of Denver. Tourism outside of Colorado is growing as well. Victor Pinho, CEO of California's Emerald Farm Tours, told Business Insider that the six months before the coronavirus pandemic saw the tour company experiencing its most substantial growth since its 2018 launch. "We were witnessing 200% growth month over month in the last six months of full operations," Pinho said. Post-COVID-19 forecasts and developments already underway While cannabis proved to be an essential industry that can weather the effects of the virus to a certain degree, its travel sector was not one to do so. "I think the real question here is when will the circumstances around COVID-19 be such that people feel comfortable returning to shared travel experiences at all," Pinho said. The tour operator believes that creating new and unique experiences that minimize COVID-19 risk are essential for tourism businesses. "Most aspiring entrepreneurs in this sector will want to craft unique tour experiences with farms and manufacturers that want to expose their products to the market," he said. While operators ponder steps to contend in the current market, dispensaries reported steady growth in several states, notably Colorado. In March and April, the state saw declines that were countered with the following three months outperforming past year's figures. The results were against the expectations of companies like Green Dragon. "Our retail sales in June reached an all-time high, with multiple stores up by more than 40% from the previous June," Levine said, crediting the state's essential status of cannabis as a prime factor. Levine added that the sales figures revealed a market in local tourism. "People want to travel to nearby areas where they can drive to versus going on a plane," he said. Travel and sales in mountain towns like Breckenridge and Telluride are performing well, according to Levine. "I predict that domestic travel will continue to be an important opportunity for the cannabis tourism sector in the coming months," he said. Tips for aspiring cannabis tourism operators The sector faces a slew of hurdles. That said, operators like Pinho and Levine see promise in their areas, as do others in markets where cannabis tourism has not yet gained a footing. Michael Cohen, founder and president of the vertically-integrated brand The Pass, operates out of The Berkshires in Western Massachusetts. Cohen said that cannabis-centric tourism hadn't reached his market. The lack of activity comes despite dispensaries serving out-of-state buyers from nearby New York and Connecticut. That said, the operator sees the sector taking shape in time. "The complementary value propositions of cannabis and The Berkshires are a beautiful and unique marriage of nature and culture," Cohen said. The growth of additional tourism markets could hinge on market awareness, with the MMGY/Enlightn survey revealing that over half of its 1,500 respondents cited only Colorado and California as legal cannabis markets. Currently, 11 states have passed adult-use laws. Besides market awareness, operators stress that any venture must be up to code. Pinho highlighted insurance and liability protection as musts for an owner, as is a trusted legal expert in drafting release forms and customer contracts. Others, like Levine, believe that operators should look beyond the novelty factor. "Cannabis tourism is definitely temporary because as more states legalize cannabis, fewer people will visit another state just to get access to legal cannabis," he said. "It's important that future entrepreneurs offer an experience that goes beyond cannabis." Levine added. "Places like Colorado will always have cannabis tourism because Colorado itself will always be a draw for tourism in general."SEE ALSO: Psychedelics will see a boom much like cannabis. Here's how entrepreneurs can stay ahead of the curve. READ MORE: The sweet spot for cannabis business opportunities is somewhere between medical and recreational — experts explain how to find it Join the conversation about this story » NOW WATCH: Why you don't see brilliantly blue fireworks
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