Cannabis Flower: A look at category trends & performance

May 3, 2022
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Introduction

As we explored in our last report, Flower is the dominant category in every market. This isn’t that surprising. It is the least processed form of cannabis, and therefore often considered the most affordable product format. It is also the most versatile form of cannabis. Consumers can use it in a variety of different ways, whether it’s simply smoked, vaped, or used as an ingredient in some home-made edibles. On the other hand, Flower is also the most susceptible category to commoditization and price compression. We also see a tendency for Flower market share to start high in newer markets, and then decrease over time as the market matures. In this report, we again dive deep into Flower category performance, examining changes in market share over time, segments, pricing, demographics, and more.

Executive summary

Although Flower is the dominant category in both the US and Canada, market share is declining in both countries. From March 2019 to April 2022, Flower market share has dropped from 78.8% to 42.5% in Canada and 41% to 40.4% in the US. Regardless, Flower still captures about twice as many sales as the next highest grossing category (Pre-Rolls in Canada and Vapor Pens in the US). The price of Flower has also been decreasing in both countries. From January 2021 to March 2022, the average EQ price of Flower in the US dropped by -22% and -17% in Canada over the same time period. When we look at how different demographic groups are spending on Flower, we notice some patterns. Generally, Male customers within each age group spend proportionally more on Flower than their Female counterparts. Consumers in the Baby Boomer age group tend to spend the most on Flower, followed closely by Millennials.

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.

In this report we examine sales from Headset Insights markets. This 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. Unless otherwise indicated the time frame for all analyses is 2022 year to date as of April 19, 2022.

How does Flower compare to other cannabis categories?

Cannabis Flower trends in the US and Canada image 1: Category market share in the US and Canada

Flower has always been the dominant category by total sales volume in all cannabis markets where Flower is available for sale. As we can see here, in both Canada and the US, Flower captures roughly twice as many sales as the next highest grossing category (Pre-Rolls in Canada, and Vapor Pens in the US). Let’s next look at how this market share has evolved over time.

Market share of cannabis Flower over time

Cannabis Flower trends in the US and Canada image 2: Market share of cannabis flower over time

In this graph, we see how the market share of Flower has changed since 2019. This shows that while Flower is the dominant category in both markets, market share has been declining over time in both countries.

In Canada, Flower market share has been dropping fairly steadily since the early months of sales. In the US, Flower market share surged early in the COVID-19 pandemic, but has been dropping steadily since early 2021. Market share is now lower than pre-pandemic levels.

Market share of Flower in states & provinces

Cannabis Flower trends in the US and Canada image 3: Market share of cannabis flower in states and provinces

Now let’s break down Flower market share by individual states and provinces. Here, we can see that Ontario (47.1%) sees a significantly higher proportion of total sales to the Flower category than other Canadian provinces. In the US, there is a wide distribution of Flower market share with California (37.5%) and Colorado (38.5%) at the low end and Maryland (47.5%) and Michigan (48.9%) at the high end.

This is a slightly different picture from our last Flower report, where Nevada had the highest market share to Flower at 56.3%. Less than one year later, Nevada has a market share of 46%. In fact, every market from the previous Flower report has seen a decline in market share since last year.

Flower segments in the US & Canada

Cannabis Flower trends in the US and Canada image 4: Segment share of Flower

When we look at Flower segments and their respective shares in each country, we notice some similarities and differences. Hybrid products are the most popular in both countries. Indica Flower is much more popular than Sativa Flower in Canada, while the two are closer in sales volume in the US.

‘Popcorn’ Flower segments contribute a significant portion of sales in the US, but have not yet caught on in Canada. Ground Flower, on the other hand, is rising in popularity in Canada but isn’t seeing much in sales in the US yet.

Average EQ price of cannabis Flower in the US & Canada

Cannabis Flower trends in the US and Canada image 5: Prices of cannabis flower over time in Canada and the US

Now that we have an understanding of Flower market share, let’s explore changes in pricing. Average Equivalized (EQ) price tells us the average price per gram that customers paid for Flower. In this graph, we can see that the average price of Flower has been dropping in both the US and Canada in recent months. In Canada, EQ price was dropping steadily through 2021 whereas the decline increased in pace in the US from September.

In total, the average EQ price of Flower in the US dropped by -22% from January 2021 to March 2022. In Canada, the average EQ price of Flower dropped by -17% in the same time period.

Wallet share of Flower by demographic group

Cannabis Flower trends in the US and Canada image 6: Flower wallet share by age group and gender

Different consumer groups shop for Flower a little differently, and we can see that here. This graph shows the wallet share to the Flower category of various demographic groups defined by age and gender in the US and Canada. This means that if an average member of the group had $100 to spend on cannabis, they would have spent X% on Flower.

Here we see that within each age group, Male customers spend proportionally more on Flower than Female customers. Consumers in the Baby Boomer group tend to spend the most on Flower, followed closely by Millennials. In Canada, Gen Z customers spend only slightly more than 1/3 of their total cannabis wallet on Flower.

Package sizes of Flower in Canada

Cannabis Flower trends in the US and Canada image 7: Package sizes of cannabis flower in Canada

Here we take a closer look at package sizes in Canada. In Canada, the market opened with a sizeable proportion of sales to the 15g package size. In the US, the ‘half ounce’ package size has always been equated to 14g, not 15g.

Interestingly, the unit volume to the 15g package size has declined since early 2021 and has since been surpassed by the 14g size in Canada. There have been some sporadic sales to 30g packages in Canada since legal sales began, but in that larger sizing, the more traditional 28g size has dominated.

Conclusion

While Flower’s popularity has been declining recently, this category will likely always be the dominant form factor for consumers. But as consumers branch out and try new products, finding the right strategies in the Flower space might become more challenging. Luckily, Headset offers all the tools you need to succeed in Flower and other categories. Sign up for a demo today to learn more about how our solutions can help identify the opportunities in the market.

Key takeaways

  • Although Flower market share is declining in both the US and Canada, Flower still captures twice as many sales as the next highest grossing category (Pre-Rolls in Canada, and Vapor Pens in the US).
  • Different segments are popular in the US and Canada, but the Hybrid Flower segment is the most popular segment in both the US and Canada.
  • The price of Flower has been dropping in both countries. The average EQ price of Flower in the US dropped by -22% between January 2021 to March 2022 and -17% in Canada.
  • Male customers spend proportionally more on Flower than Female customers. Baby Boomers tend to spend the most on Flower, followed closely by Millennials.

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Category Data
Basket Trends and Analysis
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