Martket response to cannabs pre-rolls exceeded expectations in 2020.
Undeterred by the coronavirus pandemic, sales increased nearly 50% across California, Colorado, Nevada, Oregon and Washington, according to Marijuana Business Daily citing data from Headset and LeafLink. The sector became the second-fastest growing cannabis item, only behind flower (54%).
Operators say that they expect pre-rolls to continue to perform well in 2021, in line with the rest of the market.
LeafLink noted a market share increase from 6.2% to 7.5% for pre-rolls last year.
Alex Feldman, LeafLink general manager of insights and marketing services, stated that if 2020 is any indication of seasonal performance, then a slight spring dip could give way to a "potentially large increase" during the fall as post-harvest supplies arrive.
But market performance can't be isolated from the pandemic's influence, according to Headset analyst Cooper Ashley, citing how pre-rolls were dealt a blow early in the pandemic.
The five states mentioned above saw market shares drop 17% for the items, going from 10.5% in February to an 8.7% share in April.
Since then, strong month-over-month growth propelled the sector to new heights — a 10.8% market share in October.
"As we move into the warmer months of the year and as life moves back towards a post-COVID 'normal' it would make sense for pre-roll sales to increase," Ashley forecasted, also noting a shift in buying to larger package sizes.
2021's Market Surge
David Farris, VP of sales and marketing at Las Vegas' Planet 13 Holdings Inc. PLNHF, noted a shift in customer purchasing, with larger pre-roll orders becoming the norm.
Planet 13, which introduced a pre-roll line recently, has seen its buying demographic shift during the pandemic, going from 90% tourist business to almost entirely local. The pandemic also led to consumers buying pre-roll packs, as well as mixing and matching from cultivators, said Farris.
Farris credited Planet 13's extensive product choices, including its in-house brands, as a motivating factor in consumer purchasing.
The pandemic played its part as well, serving as an accelerant to an already hot market.
"The pandemic accelerated that trend as it led to more opportunities to consume with work from home arrangements and also caused conditions that likely led to increased usage," stated Louie Reformina, chief business development officer at Turning Point Brands Inc. TPB.
Strong pre-roll sales are just the beginning, according to David Bleicher, brand manager of Green Thumb Industries Inc.'s GTBIF pre-roll line Dogwalkers.
"Consumers will continue to seek unique ways to consume their flower and will demand it in convenient and single-use formats, like pre-rolls," he predicted.
Image: Blues Brothers-themed pre-rolls (launched in 2020)
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Meet the biggest cannabis industry players and make deals that will push the industry forward.
Featuring live company presentations, insider panels, and unmatched access to networking, the Benzinga Cannabis Capital Conference is where cannabis executives and entrepreneurs meet.
Join us September 13-14, 2022 at The Palmer House in Chicago, IL.