According to exclusive ASI research, promo product sales in Colorado are increasing at a faster rate than any other state in the country – up 10% in 2015. But why?
Could it be the state’s historic skilled labor shortage, which is forcing the construction industry there to advertise open positions at a breakneck pace? Maybe it’s Colorado’s friendly business climate, the lure that’s encouraged a record number of millennials to start their own companies? Or is it the steady growth of Colorado’s technology, mining and financial sectors?
Yes, it’s all of these factors – but there’s something else that’s putting the state in a unique position for gains: the legalized marijuana industry. “When a new industry starts in a state, rarely does it exceed sales of $1 billion in its first five years, yet that’s what’s happening with marijuana in Colorado,” says Nate Kucsma, ASI’s director of research. “With very strict dispensary regulations in place for TV, radio, Internet and outdoor advertising, it’s no surprise that promotional products – which don’t have these restrictions – are booming.”
An increasing number of distributors are benefitting from the marijuana rush. Troy De Baca, owner of Denver-based Troy’s Custom Tees, has won consistent orders from marijuana dispensaries, boosting his revenues. “I can vouch for the fact that the marijuana industry has helped business,” he says. “I have repeat customers who order months in advance, especially as they get ready for the Cannabis Cup – which is a local trade show that’s like the Super Bowl for pot.”
Colorado’s annual 4/20 day pro-marijuana celebrations also entice dispensaries and growers to market their brands and individual strains to a mass audience of enthusiasts. “I’ve done T-shirts and flat visor caps for 4/20 day, and I expect to get some more orders this year,” says Stan Lemonovich, vice president of AAA Wholesale Services (asi/100250).
Jay Tittman, owner of Rocky Mountain Business Products (asi/590287), has provided branded stickers, pens and lighters to help dispensaries promote their shops. He believes it’s not only event traffic that’s driving sales, but tourism, as well. “There’s a big attraction for tourists to buy a cap or a T-shirt with a dispensary’s name on it,” Tittman says. “This stuff is being merchandised extensively. It’s definitely an area we want to focus hard on.”
The economic potential of the marijuana industry in Colorado already seems limitless. Over just the next four years, analysts expect the cannabis industry will grow into a $40 billion behemoth, with Colorado as the epicenter. And, by some estimates, every dollar spent on marijuana will lead to another $3 working its way into the local economy. “In my opinion, there’s tens of millions of dollars of marketing and promotional products opportunities related to marijuana,” says Tittman. “That might be on the low end.”