💨 🍪 🍻 Form Factors Forever, Friends

Last month, Hall of Flowers was packed to the gills with eager vendors (with lots of flat brim hats, naturally) describing why their value propositions are unique, and why their proprietary emulsion process or outdoor growing techniques set them apart from the competition.

What struck me, though, was the mix of form factors. There were edibles, and tinctures, and drinks; topicals, flower, vapes, extracts, oh my!

Btw, I have long assumed and written that the legal cannabis industry would ride a wave of these novel form factors, welcoming new users into the space with less intimidating products than smokable flower. And, to an extent, that’s true - who doesn’t have a Baby Boomer in the family that has tried gummies?

The representation of form factors in Santa Rosa seemed to support that theory, too - a casual observer may even go to that show and assume that vapes and beverages have surpassed flower as the category of choice, nationwide.

They’d be wrong. And I was too. 

☝️ The Flower Infatuation

Ahh, flower. The mainstay. The entry point for most of us. The dominant category.

Look at the chart above. In the US, flower has remained above 40% of sales for three years, even during the entry of legal vapes, COVID, and the proliferation of quality edibles products.

Why? Well,

• It’s the least processed category, so supply is often less of an issue

• It’s a good choice on a price-per-gram basis, so you get a lot of bang for your buck

• Older generations favor flower (which surprised me!), and they have more money

Jane’s data, from online orders across ~2,300 stores, supports this mix as well:

In terms of Canada - that number normalized from such a lofty spot because flower was all that was available. The deterioration of that trend - and its settling at ~50% - is attributable to new products entering the market.

💰 What else sells?

Although flower is the dominant category - individual brands from the vape, edible, and drink categories are shining like the sun on a summer day in Palm Springs when you haven’t put on enough SPF and you’re sitting by the pool but too lazy to get up to reapply so you sit there in your sunglasses and just take it.

(Made myself lol)

🌴 Top Brands in California (Last 30 days)

Not one flower brand.

Btw, one interesting tidbit: many, many markets - in particular those with a heavy MSO presence - are dominated by in-house, private label brands. Cresco, Rhythm, Verano, etc. Those retailer-owned brands will continue to have unbalanced influence over product evolution in cannabis, as long as they are selling in-house products out of their many distribution points. 

🧠 Random Thoughts: Vitamins

Cannabis brands have done an excellent job of addressing usage occasions - products are coming in lower doses for reasonable everyday consumption, beverage makers are aiming to take a chunk out of alcohol / social occasions, etc.

One area with little to no innovation, though, has been a consumable health and wellness product, which mimics the occasion of a daily vitamin. Where is the 1-2mg pill that we take every morning for depression, anxiety, etc., when we don’t want to eat a piece of candy or chocolate or a mint? Does it already exist? Have I missed it?

Although I am hesitant to push a pharmaceutical process, this seems like a no-brainer to bring new entrants into the fold, and quickly.

🍹 Big Noise Beverages

So much noise about cannabis beverages and their potential lately. Full disclosure, I’m a big repeat buyer of Cann - I like the taste, the dose, the alternative to alcohol. I get the value prop and other people do, too.

But beverages have a long way to go to dominate the market - their share of voice in the media is huge, and is mismatched with their share of revenue lately. I would love to see 100% distribution of cannabis beverages and a better price point - and perhaps distribution in traditional channels, someday. Then beverages will explode - and maybe give flower a run for its money.

📚 tl: dr

• Form factors have exploded over the last four years

• Flower still dominates the market, at ~40% of total revenue

• Individual brands - mostly non-flower - have a big share in non-vertical markets

• I want a low-dose cannabis vitamin

• Beverages will be a force to be reckoned with, as long as they have wider distribution and a good price pt

• It is Wednesday