Lounges Likely to Broaden Las Vegas Tourism Appeal

With approximately 75% of Americans living in a state with medical and/or adult-use legalization, cannabis is becoming more mainstream. This could be a factor spurring the growth of “canna-cations,” as consumers seek to maintain or increase their cannabis use when traveling. In fact, according to a recent Harris Poll, half of Millennials say that access to legal recreational cannabis is important when choosing a vacation destination.

Adult-use cannabis consumption lounges will soon be a reality in Nevada, as the state approved regulations governing the spaces in June. Las Vegas is one of the top tourist destinations in the U.S., so Sin City stands to be a major player in the canna-tourism marketplace.

In 2021, Vegas managed to attract more than 76% of visitors back to its city despite ongoing pandemic pressures, and the first quarter of 2022 saw a 66% increase in visitors year over year, according to the Las Vegas Convention and Visitors Authority (LVCVA). Many tourists are coming from locations with some form of cannabis legalization, with almost half (49%) of all domestic airline visitors coming to Las Vegas from legal adult-use states, according to LVCVA data further analyzed by Hoodie Analytics.

So, how might dispensaries fine-tune their in-store experiences to better satisfy the growing needs of tourists who are seeking cannabis as part of their travels? We examined top California tourist cities like Los Angeles and San Francisco to see how Las Vegas may start to evolve its cannabis offerings as tourism continues to rebound and consumption lounges start to launch.

Brand Assortment

Tourist-centric dispensaries, whether part of multistate operators or local brands, have an intensified need to not only maintain a consistent, reliable assortment for residents, but to also tailor their offerings to leisure and business travelers.

Multistate operators with familiar brands can offer an approachable face in a new place and be a comfort to out-of-town visitors, while local market brands can offer the excitement and exploration journey that many tourists come to Las Vegas to enjoy. Similar to craft breweries, local cannabis dispensaries can enrich a consumer’s visit by providing an experience only found in that specific market.

In Sin City, Hoodie Analytics found stores offering 18 local brands, on average, while top tourist spots in California offer a larger local market portfolio of 24 brands, on average. That’s not to say, however, that wide selection is the most important factor when determining what to stock on shelves. When analyzing brand mix and variety, dispensary considerations can include ensuring products fit the retailer’s core strategy (e.g., being known for curated, premium offerings or accessible, valuable products). Simply offering a variety of products for variety’s sake does not always translate to sales.

Product Assortment

To understand how product assortment at lounges may look in the future, Hoodie Analytics looked at 10 dispensaries with public consumption lounges across California to see how their assortments compare to Las Vegas’ approximately 50 dispensaries currently.

While flower will still be a sizable portion of assortment, prerolls (particularly singles) and edibles may start to command a larger share of product offerings in a lounge. Edibles, in particular, have an opportunity to meet the growing demand of low-dose, sessionable products, that are particularly important within a public consumption market.

One way Las Vegas cannabis retailers can broaden their edibles offerings is to further evaluate the beverage distribution within stores. While an average Sin City dispensary offers 11 cannabis beverages to customers, California tourist locations often see more than double that amount, with 23 items across a variety of brands and beverage formats. As the cannabis-infused beverage category continues to see distribution growth, there may be potential to smartly add beverage brands in lounges as Las Vegas emerges as a public consumption market.

As cannabis lounges start to roll out, Las Vegas stands to become a major destination in the canna-cation industry. By providing the right assortment of product types and brands, operators can provide a pleasurable, fun, adventure-filled experience that has become synonymous with Las Vegas.

Kelly Bernazza-Hall is senior vice president, customer services at Hoodie.