HT>New Report Examines Pre-roll Industry Growth

[RSS-feed]

Custom Cones USA partnered with cannabis data company Headset to publish a white paper about product popularity among its customers. Entitled “The State of the Pre-Roll Industry,” the report explores multiple facets of pre-rolls, from rising sales growth to generation interest and methods of creation, packing, and more. “This white paper demonstrates the continued growth of the pre-roll industry and its potential to become the #1 largest product category within the cannabis industry,” said CEO and co-founder of Custom Cones USA, Harrison Bard. “We thank our partners at Headset for collaborating on the white paper to provide a wealth of information that people can trust to make informed business decisions in our evolving marketplace.”

The data for this report was collected from more than 300 “recreational cannabis producers, medical cannabis producers, hemp producers, plant processors, vertically integrated brands, cannabis brand agencies, dispensaries, and multi-state operators.”

In comparing year over year category sales growth in the U.S. and Canada between November 2021-2022, the white paper explains which product types are increasing or decreasing in popularity. “…[P]re-rolls, edibles, drinks, vapes, and oil saw an increase in market share, and tinctures, capsules, and topicals saw their market share shrink,” the paper explains. “The big takeaway from this data is that ‘recreational’ categories (flower, pre-rolls, and vapes) are driving the market, while ‘wellness’ categories (tinctures, capsules, and topicals) are shrinking.”

Year over year segment growth, infused pre-rolls grew in Canada by 1,426%, mixed strain pre-rolls by 440%, and disposable vapes at 160%. In the U.S., mixed strain pre-rolls rose by 63%, disposable vape pens by 60%, and infused pre-rolls by 22%. The white paper cites potency as an important factor when consumers are choosing which product to purchase, since infused pre-rolls are more potent than standard pre-rolls, as well as the advancement of pre-roll machinery which can keep prices low and potency remains high.

The paper also addresses an interesting trend showing the price compression of cannabis products in all categories (beverages, concentrates, edibles, pre-rolls, and vape pens are trending downward in the U.S., and all prices are also decreasing in Canada in all categories except pre-rolls. “In other words, if you are in the business of selling cannabis, and you are worried about declining margins, pre-rolls are a category you should be expanding into to maintain and boost profitability.”

Custom Cones USA added that 58.4% of companies confirm that they produce or sell infused pre-rolls, and the white paper explained a correlation between the decrease in price for regular pre-rolls and an increase in price for infused pre-rolls. Multi-packs of pre-rolls are also on the rise, with an estimated 400% growth since 2021 in multi-packs with at least two to five grams.

While different generations of adults lean toward specific types of cannabis products, pre-rolls remain fairly consistent among all generations, with baby boomers at 12.8%, Generation X at 13.6%, millennials at 14.5%, and Generation Z at 14.4%.

Specifically in the Canada cannabis industry, pre-rolls are on a roll. About 50% of cannabis companies are less than three years old, compared to 18.9% that are four to five years old, and 20.5% that are six to seven years old. The white paper notes that the industry, and specifically pre-roll businesses, are maturing. However, there are projections about how the industry will adjust and change over time, with questions about if Canada businesses will expand into the U.S., or how new cannabis markets in the U.S. will be able to produce pre-rolls at the same rate as businesses in mature markets.

For cannabis businesses seeking to expand, the white paper also notes that businesses should consider how many pre-rolls they can produce monthly, which machines or methods other brands are using to pack pre-rolls, whether or not they weigh pre-rolls before packaging, and the average size of a pre-roll in grams.

In conclusion, the white paper identifies pre-rolls as a trend that will continue to rise. “After examining the data, we fully expect the pre-roll trends to continue, so much so that we believe pre-rolls will overtake flower as the largest selling product category by 2030,” the white paper projected. “They are the most convenient way to consume flower—just add fire, and the rise of infused pre-rolls and multi-packs will continue to push the market forward. So, it’s not a stretch to think that, as the quality of pre-rolls continues to rise, pre-rolls will start to overtake the flower category.”

The post New Report Examines Pre-roll Industry Growth appeared first on High Times.

View the full article