Flower is the largest category for cannabis products on the U.S. cannabis market. However, its influence is slowly waning as the shift in demand for adult-use products grows.
Recent sales figures from Headset, a research institute based in Oregon, reveal that the prices for flower are dropping in Colorado, California, Michigan, Oregon, Nevada and Washington state. Data shows that the price per gram of flower dropped in the six states by 14%. In January, the flower fetched around $6.78 per gram, dropping to $5.82 in December. The market share in those six states grew from about $5 billion in 2020 to almost $5.5 billion in 2021.
However, the overall market share for flowers fell. According to Cooper Ashley, the senior data analyst at Headset, the 11.5% rise in flower sales was lower than the 18% increase in overall marijuana sales. By contrast, pre-rolls experienced about a 39% increase with sales figures revealing that the market share grew from about $1 billion in 2020 to $1.4 billion in 2021. Within the same period, the share for edibles increased by 20.4% going from about $1.1 billion to $1.4 billion.
As more products arrive in the markets and growers develop their facilities, the overall prices for flower continue to decrease. The cannabis flower was the third product to experience the slowest growth after tinctures and sublinguals, which decreased by 7.5%, and topicals, which increased by 2.5%.
The buying habits of consumers have shifted in the more established markets. Marijuana retailers report that there is less attention for potency but more of the plant’s terpenes and the other minor cannabinoids. Moreover, the consumer purchases of the cannabis flower vary across the markets. According to Ethos Cannabis, a marijuana production company based in Philadelphia, the buying habits of consumers in the East Coast are influenced by the THC concentration. Ethos Cannabis VP Mike Bibbey said that potency is the primary reason that drives purchases. He said that the most popular flowers are the ones with 25% or higher THC concentrations.
As the market matures, consumers become more knowledgeable and are able to differentiate between products. According to Falcon Brands, a California-based cannabis company, mature markets attract more competition, which makes quality a decision driver. According to the company’s CEO, Steve Gutterman, high-quality flowers are not affected by the drop in prices because consumers will be willing to pay more for terpene and cannabinoid content. He predicts that high-quality flower will cost almost $2,000 a pound, which is slightly lower than in 2021.
The demand for flower with high potency is seen in Canada. According to cannabis company Cannara Biotech, flower with as high as 30% THC “fly off the shelves” with the prices falling from C$2 a gram to C$1.
Sector players such as Cannabis Strategic Ventures Inc. (OTC: NUGS) are aware of these changes in customer preferences, and the industry is seeing a burst of innovation aimed at addressing those evolving customer needs.
NOTE TO INVESTORS: The latest news and updates relating to Cannabis Strategic Ventures Inc. (OTC: NUGS) are available in the company’s newsroom at http://cnw.fm/NUGS
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