Cannabis Concentrates: An analysis of category data & trends

June 15, 2022
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Introduction

With so many types of Concentrates and ways to consume them, Concentrates are an art that appeal to a certain consumer. That might be why this category isn’t as dominant as other cannabis form factors as the fifth largest product category in both the US and Canada. But while this category doesn’t share the simplicity of Flower or the discretion of Edibles, younger consumers are exploring the category with Gen Z customers purchasing Concentrates at triple the rate of Baby Boomers. With 7/10 quickly approaching, we take a close look at the Concentrate category, examining market share trends, pricing, demographics, and segments in the US and Canada.

Executive summary

Since our last report on Concentrates, there have been some changes in this category’s performance with key differences in the US and Canadian markets. For example, since June 2021, Concentrate market share in Canada has increased from 2.9% to 3.8% of total cannabis sales. In the US, market share has decreased from 9.5% to 8.3% in the same time period. Segment preferences also vary between US and Canadian consumers. The Hash segment, for example, is quite popular in the Canadian market and captures 30% of total Concentrate sales while only accounting for 2% of sales in the US. Live Resin on the other hand, is more popular in the US with 34% of sales, but only 22% of sales in Canada.

Although there are many differences in the US and Canadian Concentrates markets, prices of Concentrates have been declining in both countries. In Canada, the EQ price of Concentrates dropped by 49% from $48.88 in January 2020 to $25.97 in May 2022. In the US, EQ price has decreased 18% from $21.86 in August 2020 to $17.85 in May 2022. When we look at the different age groups purchasing Concentrate products, we find that younger consumers purchase Concentrates more than older age groups, and Male consumers in every generation purchase more Concentrates than their Female counterparts.

Methodology

Data for this report comes from real-time sales reporting by participating cannabis retailers via their point-of-sale systems, which are linked to Headset’s business intelligence software. Headset’s data is very reliable, as it comes digitally direct from our partner retailers. However, the potential does exist for misreporting in the instance of duplicates, incorrectly classified products, inaccurate entry of products into point-of-sale systems, or even simple human error at the point of purchase. Thus, there is a slight margin of error to consider.

Unless otherwise indicated, in this report we examine sales from Headset Insights markets, which includes CA, CO, WA, NV, OR, and MI in the US and AB, ON, BC, SK in Canada. We present all data in local currency and do not make adjustments for currency fluctuations. Analyses labelled as 2022 YTD include data from January 1 to June 1 2022.

Market share of cannabis product categories

Cannabis Concentrates in the US & Canada image 1: Market share of cannabis product categories

Since our last report on Concentrates, market share to this category has increased in Canada (up from 2.9%) and decreased in the US (down from 9.5%). In Canada, Concentrates are the third best-selling ‘Cannabis 2.0’ category behind Vapor Pens and Edibles. In both countries they are the fifth highest revenue product format behind Flower, Pre-Roll, Vapor Pens, and Edibles.

Market share of cannabis Concentrates over time

Cannabis Concentrates in the US & Canada image 2: Market share of Concentrates through time

For the majority of the last several years Concentrate market share hovered right around, or just below, 10% of total sales in the US. However, after a peak in late 2020, market share to this category dropped through the first quarter of 2021 and has since stabilized between eight and nine percent.

In Canada, Concentrate market share has risen more steadily than some other ‘Cannabis 2.0’ categories. Market share to this category seems to have potentially plateaued around 4% of sales, but time will tell. There has been a slight decline in Concentrate market share in both countries over the most recent several months, which is a trend we will be keeping a close eye on through the summer.

Cannabis Concentrate market share in states & provinces

Cannabis Concentrates in the US & Canada image 3: Market share of Concentrates in states and provinces

Given what we saw in the first two graphs, it is not surprising to see that all US cannabis state markets have higher Concentrate market share than any Canadian provincial markets. Interestingly, the US states with the highest market share to this category are the oldest: Oregon, Colorado, and Washington. Massachusetts, at the low end, is the only US market with less than 5% of sales to the Concentrates category so far this year.

In Canada, Alberta has the highest market share with 4.5% of sales to Concentrates, while Ontario has the lowest at 3.6%.

Demographic preferences for Concentrate products

Cannabis Concentrates in the US & Canada image 4: Who is buying Concentrates in the US

Here we see the Concentrate wallet share of each customer demographic group in US markets so far in 2022. There is a clear and consistent pattern that as we move up in age, customers tend to choose Concentrate products relatively less. For example, customers in the Gen Z age group tend to contribute roughly triple their total cannabis spend to Concentrate products in comparison to customers in the Baby Boomer generation. Within all age groups, Male customers have significantly higher Concentrate wallet share than their Female counterparts.

Change in cannabis Concentrate pricing in the US & Canada

Cannabis Concentrates in the US & Canada image 5: Changes in Concentrate pricing in the US and Canada over time

Next, let’s explore changes in pricing. Here we can see the average equivalized (EQ) price of Concentrate products in both Canada and the US over the past two years. EQ price is the average price per gram of Concentrate products across all segments and package sizes. Clearly, there was some serious volatility in the Concentrate market during the first year of sales in Canada. We can see that the average EQ price of this category began at nearly $50 before plummeting below $30 and then climbed right back up to the high-$40s by the end of Summer 2020. Since then, the average EQ price of Concentrates in Canada has been steadily decreasing and was $25.97 in May 2022, a 49% drop since January 2020 ($48.99).

In the US, Concentrate prices have been more steady as the market is much more mature than in Canada. However there have been some shifts with a fairly steady decline in pricing since August 2020. In August 2020, the average EQ price for Concentrates in the US was $21.86. In May 2022 the average price per gram was $17.85, a decrease of 18%.

Concentrate package sizes in the US & Canada

Cannabis Concentrates in the US & Canada image 6: Concentrate package size preferences

This graph shows us the proportional unit volume to the most common package sizes of Concentrate products in both the US and Canada so far this year. We can see that 1g package sizes dominate in both markets. In the US, they account for more than 95% of all products sold. One stand out difference between the countries is the popularity of the two gram package size. In Canada nearly a third of unit volume comes from two gram products, almost entirely from the Hash segment. In the US this is not a popular package size at all.

Concentrate segment preferences in the US & Canada

Cannabis Concentrates in the US & Canada image 7: Segments of Concentrates in the US and Canada

For one final analysis of the North American Concentrates market, let’s compare some segments that have very different popularity levels in the US and Canada. This graph shows the category market share of several Concentrate segments, selected for their disparate values across international lines.

Here we can see that Hash, as mentioned in the previous slide, is very popular with Canadian Concentrate customers. In fact, it is the highest revenue Concentrate segment so far this year. In the US however, Hash only contributes 2% of all Concentrate sales. Shatter is also a clear preference of Canadian customers with 25% category share while this segment only has 7% of Concentrate sales in the US. On the other hand, Live Resin is much more popular in the US than in Canada, as is Rosin.

Conclusion

Budder or Badder, Hash or Shatter, the universe of Concentrates can be expansive and difficult to navigate without the proper insights. Luckily, Headset tools equip you with the knowledge and data you need to stay ahead of Concentrates and other cannabis categories, such as sales dashboards to keep track of sales performance, demographic insights to understand consumer landscapes across markets, and marketing tools to help you target the right customers. Sign up for a demo to learn how you can always stay competitive in the cannabis industry.

Key takeaways

  • Concentrates are the fifth highest revenue category in both the US and Canada.
  • Market share to Concentrates has steadily risen in Canada, but may be on the decline in the US.
  • Legacy US markets such as Oregon and Colorado tend to have the highest Concentrate market share in comparison to newer markets such as Massachusetts or Illinois.
  • Younger customers spend relatively more of their wallet on Concentrates. Within all age groups, Male customers are more likely to buy more Concentrates than Female customers.
  • Concentrate pricing was extremely volatile during the first year of sales in Canada but has since been steadily declining. In the US, prices have been declining since late 2020.
  • One gram products are the most popular in both countries. Canada sees a significant portion of sales to two gram Hash products, which is not a trend shared by US markets.
  • There are large discrepancies in Concentrate segment popularities between US and Canadian markets.

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