Cannabis Edibles: An analysis of category trends & performance

Introduction

A lot has changed for cannabis Edibles. There was once a simpler time when the Edibles category was known exclusively for pot brownies. But the category has expanded to include hundreds of brands and thousands of different products like gummies and mints, and now brownies account for less than 1% of Edible sales in the US and Canada. In this report we take a close look at the category, examining sales growth, changes in segment popularity, pricing, consumer preferences and much more. As always, there’s a lot to cover, so let’s dive in!

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Executive summary

Since our last report on the topic, Edibles have continued to grow in popularity amongst consumers in both the US and Canada. In Canada, Edibles have grown from 4% of total sales in January 2021 to 5.8% of total sales in September 2022. In the US, this category has grown from 10.7% to 12.1% of total sales in the same time period. The number of brands has also increased in both countries. Since last September, the number of Edibles brands in Canada has increased 73.7% and 4.7% in the US.

Gummies dominate the Edibles scene in both markets, making up 69.4% of all Edible sales in Canada and 73.9% of sales in the US. Chocolates also capture a significant portion of sales in the US (9.4%) and Canada (14.1%). When we look at consumer preferences for the category, we find that older age groups and Female customers have a greater affinity for Edibles than they do for other cannabis categories in both countries.

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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 noted, sales data is from ON, AB, SK, BC, markets in Canada and WA, OR, CA, AZ, CO, MI, FL, MA, NV, MD, and IL markets in the US. The following analysis reports on sales occurring from January through September 2022, unless otherwise indicated.

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Market share of Edibles in the US and Canada

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Edibles are the fourth highest grossing category by total sales and share of the market in both the US and Canada. Edibles are much more popular in the US compared to their northern neighbor. In the US Edibles make up 11.8% of total sales, 6 percentage points higher than the 5.8% we see in Canada. One reason Edibles may be less popular in Canada may be due to regulations limiting the amount of THC allowed in a package at 10mg.

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Market share of cannabis Edibles in states and provinces

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Next, let’s look at market share of Edibles in different states and provinces. Of the Canadian provinces, British Columbia shows the greatest preference for the category with 6.4% of total sales going to Edibles.

In the US, we see a greater range of market share for Edibles among the different states. Colorado has the highest share of Edibles, with 14.8% of all sales spent on the category. Arizona (9.6%) and Washington (9.1%) markets are on the lower end of Edibles market share in the US.

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Market share of cannabis Edibles over time

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Here we look at how market share of Edibles has changed over time. The popularity of Edibles are growing in both the US and Canada. In Canada, Edibles have grown from 4% of total sales in January 2021 to 5.8% of total sales in September 2022. In the US, the category has grown from 10.7% to 12.1% of total sales in the same time period.

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Sales growth of Edibles in the US & Canada

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Reflective of the broader US cannabis market, Edible sales have struggled to grow in 2022 relative to 2021. Through the first nine months of the year, Headset tracked markets in the US have increased 7.3% in total Edible sales. However, in Canada provinces have rallied for a combined 60.1% year over year increase in total Edible sales.

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Category growth in 2022

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When analyzing year over year sales growth of Edibles in different states and provinces, we can see that some markets have had more positive growth than others. For example, the Canadian provinces have experienced very strong growth so far in 2022. In the US, newer markets have posted double digit growth while legacy markets like Oregon (3.6%) or Colorado (-8.9%) have seen smaller or even negative growth in sales. This is tied very closely to overall market performance in the US, where legacy markets have seen total sales decline year over year in 2022.

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Growth of Edibles brands

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Next, let’s take a look at brands. Brand growth has been strong in Canada and it seems as if new Edible brands will continue to enter the Canadian market. Brand count has increased 73.7% since September 2021, and 43.5% so far this year.

In the US, the brand count for Edibles has increased 4.7% year over year from September 2021 to 2022. But brand count reached a peak in April 2022 and has declined 7.4% since then.

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Popular Edible products

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This graph breaks down the market share of different segments of the Edible category. Clearly, Gummies are the most popular segment of Edibles in both the US and Canada. In Canada, Gummies make up about 70% of all Edible sales. Gummies have been gaining popularity, increasing share by 4% in the last year. The Candy, Lozenge and Gum segment, which used to make up under 1% of all Edible sales, now accounts for 5.4% of all category sales through the first nine months of 2022. This growth is attributed to the success of the Jolt product line of cannabis lozenges by Edison Cannabis Co. After appearing on the market last fall, Jolt lozenges have accumulated millions in sales, accounting for 87% of total sales within the segment so far in 2022. This is due to the fact that the Edison Jolt line, sold in a 100mg pack, has found a way to circumnavigate Canada’s restrictive Edibles regulations that limit brands to 10mg of THC per package for the category. Edison’s process of rendering the product allows it to be technically considered a Concentrate, which has allowed them to gain the upper hand in this segment and meet consumer demands. We can expect Edibles to grow in popularity in Canada as brands follow Edison’s lead or Canada loosens regulations on the category.

In the US, almost three of every four Edibles sold are Gummies. This segment is also growing in the US, increasing 6% in the last year. Caramels, Chews and Taffy (9.5%) and Chocolate (9.4%) also capture significant market share, though both categories have dropped in popularity when comparing to the same period in 2021.

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Price of cannabis Edibles in Canada

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Average item price has fluctuated a lot in Canada since the beginning of 2021. While it has increased 2.2% since the beginning of last year, AIP has finished nearly where it started when comparing September to January of this year. EQ prices, which tend to be a better indicator of price, has fallen 12.6% since January 2021 and seems to be continuing to slide.

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Price of Edibles in the US

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In the US, AIP has decreased 8.7% and EQ price has decreased 13.5% since the beginning of 2022. EQ prices are falling most dramatically in Oregon (-32%) and Michigan (-26%) while prices seem to have stabilized in Washington and Colorado.

Now that we have an understanding of pricing trends of Edibles in the US and Canada, let’s explore who is purchasing these products.

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Who’s buying cannabis Edibles in Canada?

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This graph compares the proportion of total market sales in Canada by demographic group to the proportion of Edible sales attributed to each demographic group. The index compares these values. If the index for a demographic group is greater than 100, then that group spends relatively more on Edibles. If the index is lower than 100, then that group spends relatively less.

Canadian consumers show some strong preferences for the category. Consumers in the Millennial and Gen X age groups, and Male consumers in particular, contribute significantly to total Edible sales. However, older customers and Female consumers tend to purchase Edibles more frequently compared to other categories. Female consumers in Canada make up 37.4% of total sales, but account for 46% of Edible sales.

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Demographic preferences for Edibles in the US

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Consumers in the US show similar category preferences as shoppers in Canada. Here, we see an even greater affinity for Edibles from older consumers. Customers over the age of 41 typically make up 37% of total cannabis sales in the US. For Edibles, these customers capture 51.3% of sales!

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Conclusion

It’s exciting to watch a category grow in the cannabis industry. We can expect this growth to continue as brands continue to innovate and find ways to reach new customers in the space. Need help understanding how to succeed within Edibles or other cannabis categories? Headset is here to help! Sign up for a demo to learn how to identify opportunities in the industry today.

Key takeaways

• Edibles are growing in popularity in the US and Canada. In Canada edibles have grown from 4% of total sales in January 2021 to 5.8% of total sales in September 2022. Similarly in the US the category has grown from 10.7% to 12.1% in total sales in the same period.
• Total Category Sales have increased more in Canada YoY than in the US. Tracked US markets combined have increased 7.3% for total edible sales YoY. Meanwhile, the four tracked Canadian provinces have rallied for a combined 60.1% Year-over-Year (YoY) increase in total edible sales.
• Brand count has grown over the last year in both countries. In Canada, the number of brands has increased 73.7% since last September and in the US the number of brands has increased 4.7% in the same time period.
• Gummies dominate the edibles scene, although, Caramels, Chews, and Taffy as well as Chocolates have significant market share as well.
• Older age groups and Female consumers show a stronger preference towards Edibles compared to other categories. In Canada women account for 46% of category sales while in the US consumers over 41 contribute to over half of Edible sales.

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