This post is presented by our media partner Grow Opportunity
View the full article here.
This year, 2024, marked the sixth anniversary of cannabis legalization in Canada. The cannabis industry has evolved rapidly over this time. After initial distribution challenges were overcome, the Canadian adult use market has steadily grown, buoyed by an increasing number of licensed retail stores across Canada.
With Canadian adult use sales decreasing from a year ago, through August 2024, licensed producers and brands are adapting to serving the evolving cannabis consumer. Fresh contenders are steadily entering the market, driving up the number of listings with regulated distributors, intensifying pricing pressure and setting the stage for fierce competition.
As markets mature, sales growth slows and industries are often faced with a shakeout period. Subject to slow growth, focus shifts to expense reductions, cost savings and cash flow. Bankruptcies and industry consolidation are natural symptoms of a challenging and crowded market.
Ontario (-5%) and British Columbia (-12%) lead the way with year over year sales drops, while Alberta (+5%) and Quebec (+11%) tallied increasing sales over a year ago. With different provincial mandates and regulations, the provinces and territories have varying approaches to cannabis and public safety.
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While leaders in Canadian cultivation, Quebec has taken the most cautious approach to regulating cannabis. This is exemplified by requiring consumers be 21 year of age or older, limiting edibles to 5mg per discrete unit, and opting out of the extracts category by restricting the sale of products with greater than 30 per cent THC content. The sales mix breakdown by product category has dried flower reporting at 35%, pre-rolls at 35%, concentrates and extracts at 4.8%, edibles at 4.8% and vapes at just over 16% of sales. Notably, 2024 has seen continued growth in both the pre-roll and infused pre-roll categories.
Princess Buds
Erika Bustos, owner of Princess Buds – a retailer in Stouffville, Ont., shared: “our customers are becoming more educated on cannabis overall. They now frequently ask about terpenes and the terpene percentage, but high THC does seem to still reign.”
2024 has revealed the rise of the more discerning consumer, as customers are becoming educated, expecting more from products. From packaging dates to exotic genetics, and high THC cultivars, consumers are seeking products that meet their desired effects and in their preferred product format.
“For new products, there are all-in one vapes, some are live resin while others are distillate based. Some people don’t care… with a higher THC content vape, customers are often expecting them to last longer or in the very least get them higher,” says Bustos. “As a female business owner, I understand the importance of offering a welcoming environment where customers are comfortable to ask questions.”
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“People are always looking for new products… the same thing but different. Sampling really helps us to decide if something is a good product and worth bringing into the store. If it’s a quality product and consistent, then we want to talk about it and share it with customers,” she says.
The cannabis sales game has always been built on marketing, hype, and chasing the next big thing. Successful retailers have cultivated an on-going dialogue with their customers, offering up the new drops of the week and serving up education that their regulars value. Most critically, seem to want consumers want quality cannabis and a consistent experience.
A taste of the North
Boreal Cultivation, The Northwest Territories’ only LP, was founded by a group of longtime friends and epitomizes the virtue of small business and community. “When legalization happened, it seemed like the North was a dumping ground for subpar product… so it was really important for us to grow some good weed. That’s everything to us. Ultimately, the most important thing,” says co-founder Jordan Harker.
“We are most proud of our breeding and genetics, as we’ve found a couple winners. In the Artic, our things is to find that unique smoke for the people. The best way to do that, is to create it,” he preaches. “Our main focus was supplying locally grown flower to the North…it’s a small market and the population is quite low, so we also have to supply other markets. Ontario has been buying anything that we can grow.”
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“Shouting out the growers on the label, I think is a nice touch. To recognize all of the hard work that they put in growing the flower, that the people are enjoying,” says Harker. “It only seemed right to put their name on the bag.”
With early success, Boreal is planning to increase volume while maintaining their craft approach and authenticity unique to the North.
New in concentrates from 1 Above
In 2019, cannabis 2.0 products consisting of edibles, concentrates and extracts were rolled out. The concentrates category has been steadily growing, but it is one of the remaining areas where the legacy market remains competitive.
1 Above is a new Canadian brand launching a 73u live rosin, a 2 gram “hash hole” infused pre-roll and an all-in-one rosin based vape. Chas Sibbett, founder of 1 Above, is excited about the continued evolution of the concentrates market. “We are doing a hand rolled hash hole joint. That’s going to be a two-gram joint with 1.6 grams of flower and 0.4 grams of rosin. The rosin would be in a snake right down the middle of the joint, so that when you burn it, it creates that hash hole effect. It is almost like a cigar. They smoke really smooth and have the best flavour ever,” he says.
“We are bringing to market the Juice Bar Live Rosin all-in-one vape. It is a half gram of decarbed rosin in a really high-end device. It has a glass cart with a ceramic heating element, opposed to the standard plastic with a cotton wicking heating element,” shares Sibbett. “They have been dialed specifically for rosin, so the temperature is relatively low and keeps the flavour high.”
With dabbable concentrates, proper temperature control, along with handling and storage throughout the supply chain, are all crucial to ensure that the product is delivered into the consumers’ hands as intended. “It is enlightening to show people the difference between rosin that has been kept in the fridge for six months and rosin that hasn’t been kept in the fridge for six weeks and seeing how rapid that degradation can be,” says Sibbett.
Programs such as BC’s Direct Delivery and Ontario’s Flow-Through were designed to better address these issues and get fresher product from the LPs to retail faster and more frequently.
Looking ahead, the cannabis industry will also continue to evolve with stakeholders petitioning for the allowance of consumption lounges and increased opportunities for cannabis tourism, which to date remains a largely untapped market in Canada.
This post was originally published by our media partner here.