Cannabis flower is still king, but how long can it hold the top spot?

It seems that at the time of writing, flowers are still the most preferred method of consumption in the cannabis market. However, relative to other products in the cannabis market, Flower has seen slower growth than these other products. To be clear: by flower we mean that consumers prefer to buy the bud and then do whatever they want with it.

Other cannabis products include oils, tinctures, pre-rolls, edibles, etc. In a recent article in MJBiz Daily, they reported on a market report from Headset, a company dedicated to understanding market trends. However, they found that flowers remained the sales king for the most part – other products such as ‘pre-rolls’ rose in popularity and outpaced the growth of flowers.

Still, flower sales rose to $5.49 billion in 2021 from $4.92 billion in 2020. However, compared to last year’s growth, flowers’ market share fell by about six percent. Pre-rolls increased about 30+%.

Additionally, we saw the cost per gram drop as more manufacturers entered the market. Cost per gram fell from $6.78 in January 2021 and ended at $5.82 in December across the six markets that Headset tracked.

In the rest of this article, we’ll examine some of the other things they found and explore the “why” behind these market trends

Why the dominance of flowers is waning

When it comes to comfort, people buy what’s easier. While a bud is a nice touch, all you need for a pre-roll is a lighter. So, out of sheer convenience, it makes sense that these items would sell more frequently than flowers. Nonetheless, flower sales will always be strong because consumers like to have weed lying around. Pre-rolls will eventually dominate simply because it will be easier for people to consume on the go without having to bring their own papers. It’s like tobacco, with the option to buy pure tobacco – most people buy pre-rolled cigarettes and pay more for them simply because of its convenience.

As other products such as beverages and edibles enter the market, we will see a subset of consumers prefer this consumption method. Similarly, disposable pens will continue to gain popularity due to convenience, higher profit margins, etc.

Immature markets like high THC

What struck Headset was that newer markets tend to favor higher THC levels as the main motive for purchase. Strains with more than 25% THC typically sell for a higher price and volume.

Mature markets liked diversity…

However, in markets like Colorado, where legal cannabis has been around for some time, consumer trends are changing. People no longer crave the highest form of THC they can find, in favor of smaller cannabinoids such as terpenes.

This change in consumer behavior will eventually become the norm for the cannabis industry, but as we can see – when the newer markets emerge, high THC levels will rule sales.

But why is it like that?

Novelty HIGH!

The main reason THC is the most important metric for new markets is that until cannabis was legal, there was no way of knowing the actual THC content of your weed. With legal weed, people now have a choice to buy quality weed.

Over time, however, too much THC can become distressing. Sometimes people don’t want to be screwed and would much rather have a buzz. If 25%+ THC is your thing, a lower THC percentage is like a beer—both are still alcohol, except one is far more potent than the other.

Similarly, over time, consumers begin to find their sweet spot and begin to adjust their consumption patterns to mimic their preferences. Therefore, metrics like taste, side effects, smell, and other minor cannabinoids become more important.

What’s next?

The only thing standing in the way of cannabis at the moment are the legal hurdles that still need to be overcome. The market is already beginning to show us how it will behave, but it cannot possibly spread its proverbial wings until federal restrictions are lifted. There’s a chance that could happen this year, but after years of reporting cannabis, I’m not so sure.

All signs point to yes, weed will be legalized across North America (Canada, US, Mexico) this year – but politicians can always find a way to screw it up. Nonetheless, once these state restrictions are lifted, we can expect the price of cannabis to continue falling as more competition kicks in. We will also see that branded products will become more important. They don’t just buy a “pre-roll”, they have a favorite brand.

While flowers will always have a good share of the market, there will be other products that will sell better simply because of brand awareness. As markets mature, we’ll also see THC’s importance receding, but it’ll still be an important metric — especially if they’re looking to cap THC limits. In the case of caps, however, there will be a domestic market that will cater to high-THC weed—considering that high-THC weed is a big seller, I doubt there will be an indefinite cap on THC. They may experiment, but the rise of a gray market will quickly remind them why we have a legal cannabis system in the first place.

Weed seems to be growing year after year and will continue to do so for the next 10-20 years as it positions itself as another commodity in society.

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