The Fastest-Growing Cannabis Products by Market

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good morning or good afternoon if you're joining us from the east coast thank you so much for taking the time out of your day to join us for yet another series of our webinar we're really excited about today's content because he hit at the core of cannabis products and dispensary marketing and we really hope that this information is beyond helpful to you as we found it really insightful today we're going to be covering the fastest growing cannabis products by market stock what your customers want to buy and in today's agenda we're going to be covering where to find the latest products insight what the recent data says about popular product categories how to maximize analytics so you can increase your revenue a little bit about myself my name is eduardo silva i'm going to be your host for today i have 18 years of sales and marketing experience and i'm really really excited to be part of this fast growing industry and helping bring some valuable insight to you our partners foot traffic is a dispensary digital advertising firm has been around for over five years now at any given point we may be assisting over 400 stores across all of north america drive revenue and profits a few housekeeping items before we get underway with our content for today if you do have those cell phones an instrumental piece of digital marketing as we love them we do ask you to silence them or just face them down on your desk for the duration of the webinar we're going to be moving through a lot of great content very quickly if you are joining us from the zoom interface do take a moment to familiarize yourself with the interface i feel like most people are fairly familiar with zoom today however we do have a q a button a little bit different than your usual use of zoom that q a button gets you access with our panelists live so if you have any questions do feel free to go ahead and ask any questions there and then finally make sure to stick around till the end of the webinar we do have some special offers for those attending the webinar today and we're going to be sharing with those with you towards the end of the webinar wonderful so so we got some of those housekeeping items underway let's talk about the industry stocking your shelves is part art part science there's that unmeasurable aspect let's call it intuition that some people have to for spotting or creating trends then there's the science of data analysis and using your resources to predict which products will do best in your store unfortunately if you are hoping to build your gut instinct by choosing the next popular cannabis brand i can't help you however if you want an overview of what's happening in the industry and the types of products that are performing well well you're in luck first up let's talk about the state of the industry in general right now 18 states have legalized recreational cannabis though they haven't all started a don't use sales over 30 states allow some form of medical marijuana now despite legalization there are of course a variety of restrictions for example in some states you can't purchase flour or edibles and some medical states limit the amount of thc in those products regardless 2020 was a huge year for cannabis with sales in california colorado massachusetts michigan nevada oregon and washington increasing 67 percent according to new frontier data total combined sales of cannabis across legal states cross the 20 billion threshold in 2020 quarterly sales across both legal medical and adult use states reached an all-time high in the first quarter 21 bringing in 5.84 billion sales for the second quarter of this year are projected to surpass 6 billion new legal markets are expected to become active in the next two years so the group projects that total legal sales will reach 43 billion by 2025. new frontier data estimates that california accounts for 26 of the legal cannabis sales in the country colorado 11 washington 7 florida 6 arizona 5 pennsylvania 5 illinois 5 oregon 5 massachusetts five michigan five and the rest of the legal states making up about 20 percent of those top ten states i just mentioned two are medical only pennsylvania and florida it will be really interesting to see how those markets grow when they legalize recreational cannabis of course you can't count out new jersey and new york which will begin rec sales over the next year so new frontier data projects that they will jump into the top 10 by 2025 as well the most recent gallup poll of 2019 shows that 12 percent of americans are active marijuana users as more states legalize we can probably expect that number to rise so who are these users according to flow hub the majority of cannabis users are millennials they make up 42 percent of medical users and 48 of recreational users that's a huge segment of the market gen xers are next they make up 23 percent of medical market and 21 of the wreck market gen z makes up 17 of both medical and rec markets while boomers account for 17 of the medical market and 13 of recreational market the silent generation which is the generation before the boomers accounts for just one percent of the market now gen z is going to keep aging up into the market so they will become a larger part of the industry within time this is crucial for understanding who you should be catering to when ordering your products as well as advertising your shop let's talk product categories flower is the iconic cannabis product of course and for many consumers it's what they are most comfortable with interestingly as a product category flower sales are growing at a slower rate than other product categories until the pandemic at that point flower sales began to outbase the growth of the product had other product categories kiwana 21 saw flour making up 50 of all cannabis sales again this is probably because it's just what people know according to statistica sales of adult use cannabis flower were valued at around 7.2 billion us dollars in the united states in 2021 this figure is expected to be more than double exceeding 15 billion dollars u.s by 2025. data from headset which is compiled from their west coast clients indicates that people like to buy their bud in eighths as that size remains remains the most popular according to the same report some of the most popular brands include include willy's reserve in colorado pacific stone in california flower one in nevada fat panda in washington and lucky lion and high productions in oregon brightfield group estimates that flower will continue to grow in popularity for medical patients they forecast that flower sales will almost double by 2025. let's be straight flour remains the most popular cannabis product other categories are growing quickly but nothing comes close to the dominance of flower if you're thinking about what type of flower to stock headset shares that hybrids make up half of the flower sales while indica and sativa make up the other half pre-rolls are technically their own category and make up about 11 percent of sales so make sure you have a good assortment of all of those as well and here's the funny tidbit for you because of cultivation side of the industry one of the biggest players in the cannabis industry isn't even cannabis at all it's scott's miracle grow you may know them if you've had to plant some seed or get some plant food recently but they are also the leading provider in hydroponics equipment for indoor growth it's been a rough couple years for vapes primarily because of unsafe vapes sold on the black market couple that with a virus that predominantly affects the respiratory system and you have some pretty good insight into why vape growth slowed over the past couple years in 2019 in the months leading up to the vape crisis headset estimated that vapes had a market share of 22 percent by january 2020 that number was down to twenty percent and it went down to nineteen percent once coveted lockdown hit now this isn't just say that the market hasn't grown vape and sales grew by 20 however that trend is still below other market growths the market for other products during the same time grew by 39 so vapes are actually a pretty diverse product category you have disposable vapes carts pods and all-in-one rechargeables the last two categories have seen the biggest hit with sales decreasing over 40 percent whereas cart sales have grown by 20.7 and disposable pans by 7.6 mj biz daily suggests that the leading sales from vapes may be because people are working from home and don't need to use discrete products they can easily enjoy their flour or whatever they choose to in their own home however as workplaces open back up and people are expected to get back in work and as restaurants theaters and concerts start opening their doors again the demand for easy to use products that are portable and discrete may increase once again to help consumers renew their love affair with vapes companies have showcased the natural products they use and keep the blame for the vaping prices on the vap on the black market retailers will need to take this a step further to ease consumer fears if you're looking at what to stock in the vape category i would lean towards carts and in particular for companies that have made clear effort showcasing their their ingredients are safe and educating consumers since those may be the brands people will feel most most comfortable shopping with as card sales began to rise once again there will be more opportunities to expand uh onto brands you may also want to carry outside of those vape carts account for almost a fifth of dispensary sales so it's a category you absolutely cannot ignore now 710 is around the corner so let's talk concentrates concentrate sales were up 40 in 2020 from 567 million dollars in 2019 to 797 million in 2020 and this is port colorado california nevada washington and oregon markets combined though they are still a relatively small segment of purchases on par with edibles and pre-rolls as markets mature more more consumers start turning to concentrate so for example according to precision extraction solutions while new markets tend to have an 80 flower to 20 percent concentrate sale breakdown those numbers shift to 65 flower and 35 concentrate as the market ages concentrates aren't for new users so maturing markets that have had legal cannabis for a while generally means consumers feel more comfortable using concentrates i've also personally noticed more consumer educating around concentrates which is really important because whereas vapes and edibles are pretty self-explanatory concentrates aren't there are a lot of different types of market types on the market and it can get somewhat confusing for someone that is new to cannabis altogether there are also more affordable concentrate vape pens on the market which have made it easier to get started with concentrates and let's be honest lots of people are tempted by those high thc percentages they want to check them out and less expensive vaporizer make it easier to do so without a huge investment some of the growth in the concentrated sector is believed to be due to the slow down in vape purchasing as some consumers have turned towards solvent-less concentrates like rosin and resin to avoid some of the additives that are found in vapes edibles have gained popularity over the past year dispensaries see them as a way to attract new customers who are reluctant to try inhalants while new formulations that focus on effects and even fast acting edibles hit the market you can expect this product category to continue to grow across the board it's not just newbies trying edibles down some regular cannabis users are also making that switch papa and barclay's chief product officer suggests this is because those who have built a tolerance to cannabis are more comfortable enjoying five milligram gummies edible sales have increased their market share in california colorado massachusetts michigan nevada oregon and washington from about 10 percent to nearly 12 percent which is outpacing the growth of other consumption methods nationwide they account for about 903 million dollars in medical marijuana sales in 2019 and brightfield group projects they will almost triple by 2025 accounting for 2.5 billion dollars of medical cannabis sales i want to take a moment here to make something clear while edibles are growing at a fast clip and potentially faster than other consumption methods they still only account for a small percentage of the market i've seen dispensaries expand their edible offerings in the news which is great but you don't want to do so to the detriment of the other product categories if you want to include more edibles on your shelves look for a variety of products so you aren't stocking a whole bunch of the same gummies or brownies otherwise you may end up with expiring products edibles are a pretty large category because it often includes capsules and tinctures so make sure you look into stocking those as well those subcategories aren't as in demand across the country and are most popular medical only states where there are people just starting out with cannabis for example cb cbd tinctures is really popular remaining really popular with individuals who are hesitant to try thc according to leaflink data analyzing analyzed by flow hub topicals decreased in sales in 2020. in january topicals accounted for 1.5 percent of sales but by december that number was just one percent they didn't provide much information or analysis on this trend though it may be due to the more people working at home and having easier access to other cannabis products that they wouldn't be able to use at while at work for example if that's the case this trend may reverse itself otherwise for most shop it doesn't seem beneficial to carry a lot of topicals unless you are a medical only state that is seeing a higher proportion of sales while topicals don't make up a large portion of the cannabis market cbd topicals are popular with 703 million dollars sold in 2019. cannabis science and technology projects that cbd topicals will be grossing 4.5 billion dollars by 2025 so it's not to be ignored now the issue with these is showing why cbd extracted from cannabis is superior to that extracted from him because cbd topicals can be purchased anywhere dispensaries have to illustrate why customers should go to a dispensary to buy it and possibly spend more so how can you do your own trend spotting first think of the data sources you already have in your hands your pos and your crm are both great sources of information and most dispensaries aren't making the most of them you should be able to access daily and even up to the minute reporting about your sales and customer behavior next take a look at free resources some sites offer free reports on latest cannabis sales trends and other industry information you should be watching mj biz daily flow hub headset statistica and even ease puts out a free report if you want use an rss feed aggregator like feedly or so you can actually easily get all of your latest industry headlines in one place just follow the different outlets you want to hear from and make it a point to check out you know your news feed fairly regularly finally consider whether you want to purchase additional data in analytics a tool like headset can be very useful for you to actually better analyze the data you're collecting and making it more actionable the last part is key we're all collecting data after all you have to send a lot of sale information to your regulatory agency but it's not always in an actionable format okay so you have your data sources and then now what so basically you want to take a look at your data in different ways and first up take a look at the past three months of your sales data by product category brand and any other filter you can actually apply are you seeing any spikes dips stagnation or other patterns compare those three months of data with the same time period for the previous year were the same things selling as well or are there new you know contenders coming into the market did you hold any sales or events that could have actually accounted for a difference keep in mind that last year things were very uncertain for a lot of people so your sales numbers may be a little hard to analyze since they won't be a true representation of what a normal time period will be take a look at trends for each of your product categories of the past 12 months and compare them to the numbers for the previous year are the trends consistent are different high sellers emerging if you can you should also look at your product sales by customer segment so if the majority of your edible sales are two millennials and they primarily shop twice a month then you can better determine how to market and how much they're potentially going to order what you stock and when to possibly uh possibly reorder be sure to also look at your customer demographics do they trend to um do they trend to the same as national data or is your customer base different it's really important to know who your customers are so that you can better pinpoint the products they want and how to reach them with targeted ads all of this data changes over time so you need to implement a process for checking this regularly in retail they're looking at product category sales daily at a minimum often they check the numbers hourly to look for opportunities and potential trends so they can capitalize on them this is a broad look at the data and then they also take a look at more granular data on a daily or weekly basis so let's say you're checking your numbers and you find that one day before people were buying more tinctures than normal maybe your local newspaper ran an informational piece about cannabis or cbd tinctures which encourage people to ask for them at your dispensary if you are regularly checking your data you would see this spike and note you shift product displays to prep your butt tenders let's talk about stagnant products your data should help you with your ordering and allow you to sell through your products more quickly for those items that are still on your shelves because you purchased them before starting your data driven ordering process consider running a sale that will appeal to your customers so that you can move that product and potentially replace it with other hotter items you can offer buy one get one deals to couple together items or encourage people to buy more of the same product this can be like buy one thc vape get a cbd vape for 50 off or buy two carts and get the third one for free we have a client who does spend uh and receive deals uh where they sell a product for a dollar once a customer hits a certain threshold with their purchase so for example spend one hundred dollars and get a brownie edible for one dollar if your state allows you can also discount the prices on those products and advertise it at a larger sale let a customer know that when the product is gone it's gone and you may find that some people were just waiting for an excuse to try these products and the sense of urgency has finally pushed them to do so i mentioned your own data from your crm and pos systems to get even more value from this data you should be using it to quarterback your advertising campaigns you're essentially looking into the customer's shopping baskets and seeing what they like to buy you know when they buy it and what they like to buy together with those products to encourage return visits make sure you are sending texts and emails based on the trends that you are actually spotting essentially you want to set up automations that trigger after certain events for example if it's been two weeks since someone has stopped by you can send them a special deal on their preferred product category as long as your crm is integrated with your email or sms platform you can have this happen automatically you can also use this data to encourage customers to try other product categories so let's say you've noticed that your new customers rely primarily on flower but customers that have been shopping with you for over a year buy more concentrates or animals you can start a drip campaign for your newer customers to help educate them about cannabis in general product types and how to use different products then offer them a deal on a new product type to encourage them to branch out you can use your crm data to start digital advertising campaigns and for example if you know that your millennial shoppers are more likely to buy topicals if they exercise you can create a special display ad campaigns that's triggered when a person within a certain age range is near a gym or a workout studio offering topicals to aid with relaxation performance or muscular recovery you can even use this data for a google ads campaign by targeting certain branded keywords that are more popular with your customer so if your customers love fat panda you can bid on that keyword as well uh with google ads to get customers with similar tastes your data can even give you insights into great keywords for your seo strategy organic traffic from search engine optimization is one of the biggest revenue drivers and your crm and pos systems hold a whole bunch of data that can help you drive even more traffic to your shop by building new landing pages and content around the most popular products categories and brands you can increase your chances of ranking for those keywords and driving more visitors to your store or your online menu so wonderful we covered quite a lot of data now we do want to make this very very easy for you to grow your customer base and increase your overall revenue now to help you navigate the digital advertising landscape and ensure you get your future deals out there we have two special promotions for those attending today's webinar first up get a free website with a six month advertising plan that includes google ads display ads and seo this plan will provide you the support you need to launch your business give your website a refresh or just supercharge your advertising and that's a 4 000 value let's get this underway and start advertising your amazing product selections and deals and you can schedule a call with our team member jason today at foot traffic dot me forward slash chat and we will walk you through these details or you can choose to get 50 off a new website um for your dispensary or a website refresh with a three-month digital advertising plan that includes google ads display ads and seo and this is valued at two thousand dollars you can schedule once again a consultation with jason our client success executive and learn more on how these services can support your goals and you can just go to foot traffic dot me forward slash chat and we'll put this in the chat window here for you i love bundling these services together because they really do work best in unison don't put all of your eggs in one basket you need to be able to diversify your advertising investment in order to get the best and largest reach also if you feel that you aren't getting the right data let's talk because we can possibly help you with that we have some great recommendations for pos systems crms and many more tools once again i want to take a moment to thank you for taking the time to speak with us today here attend our webinar and learn more about some of these industry trends we're really really excited about the potential to speak to you right after the webinar do schedule a call with us once again foot traffic dot me forward slash chat and we look forward to speaking with you ]