what’s hot and what’s not in annabis trends · 2020. 9. 1. · 2018 bds analytics |...

2018 BDS Analytics | CONFIDENTIAL

What’s Hot and What’s Not in Cannabis TrendsWhat Cannabis Product and Consumer Trends Mean for Cannabis Businesses in MichiganRoy Bingham – CEO and Co-Founder [email protected]

mailto:[email protected]


1. Match product offering with consumer demand to maximize sales, loyalty and profits2. Understand sales and growth rates of product categories and sub-categories3. Breakdown your competitive environment4. Formulate your product strategy5. Harness third party data to support sales6. Leverage detailed volume and price data to create and tweak marketing initiatives

Key Takeaways


Who…

Is This Guy Anyway?


BDS Analytics: your one source for unmatched understanding


800,000,000legal cannabis transactions

To date, BDS Analytics has processed and analyzed more than

…and adding more each month

18,000consumer survey responses


>140,000 items

>2,400 brands


Our Consumer Insights work covers US and Canada and individual States and Provinces


Our Industry Intelligence is unparalleled


What Is Happening:Canada and US (California) Dwarf All Else


6.75.4

6.8

8.2

9.911.2

2.8

7.5

11.4

14.8

17.9

20.9

0

5

10

15

20

25

2017 2018 2019 2020 2021 2022

Medical vs Adult Worldwide legal Spending (In $Billions)

Medical

Adult

What Is Happening:Adult Sales Surpass Medical For Good This Year

Source: ArcView Market Research/BDS Analytics


Legal Cannabis is…

Evolving Rapidly


The cannabis experience some might imagine…


In reality, the Consumer experience is normalized


Like other industries, Budget, Mainstream, Premium, and Luxury consumer segments exist, creating opportunities for brand differentiation

14

A Look at the Upscale Consumer…• High Income, Educated• Live in Suburbs• Enjoys Outdoors, Fine Arts• Physically Active• Personal care is VERY important—and marijuana is

essential• Consumes organic & gourmet foods• Pairs marijuana with other products• More familiar with species/strains than other

consumers• Trustworthiness matters in choosing a dispensary• Familiarity and interest across methods—inhalables,

edibles, and topicals


Brands are now everywhere


Branded products see tremendous growth—now >40% of sales

*BDS Analytics GreenEdge POS Retail Data; Colorado Retail Dollars

81%74%

68%62%

19% 26% 32% 38%

2014 2015 2016 2017

COLORADO CANNABIS RETAIL DOLLAR SALESBranded vs. Generic Products

Branded

Generic


Mood/Effect branding emerges, as Consumers’ Need States numerous, evolving throughout the time of day, mood, activity, and more

Offerings of CALM, CRUISE, CREATE, CONNECT, CHARGE

#1 Flower Brand in CA in 2017

#1 Pill/Tablet Brand #5 Edible Brandin CO in 2017


Pharma-inspired Topicals/Health/Beauty Mix-Ins

18

Specialized delivery systems. Absorption science language (transdermal, sublingual) becoming everyday consumer vocabulary


It is NOT just about THC—CBD is exploding

Non-psychoactive CBD products


State By State PerformanceGreenEdge™ sales tracking


Since Adult Use Began These Medical Markets Have Been Flat To Down

$0

$20

$40

$60

Mill

ion

s

CO Med

OR Med


While Their Adult Use Markets Have Grown Very Strongly

0

20

40

60

80

100

120

Mill

ion

s

CO Adult

OR Adult


$-

$10

$20

$30

$40

$50

$60

$70

AZ – Medical ($Millions)

And Some Medical Markets Have Grown Very Strongly In The Absence Of An Adult Use Market

AZ Medical


Which Product Categories Are Driving That Growth?GreenEdge™ sales tracking


Product Category Consumption By Category

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

Q12014

Q22014

Q32014

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

Q12017

Q22017

Q32017

Q42017

Q12018

Q22018

Mill

ion

s

Total CO Category Sales ($m)

Flower

Topicals

Pre-rolled

Edibles

Concentrates

Other


Oregon Had A Bumpier Path To A Similar Result

$-

$20

$40

$60

$80

$100

$120

$140

$160

$180

Mill

ion

s

Total OR Category Sales ($m)

by: Source:

Flower

TopicalsPre-rolled

Edibles

Concentrates

Q2 2018Q1 2015


Overall Sales By Category Is Pretty Consistent Across States

Flower43%

Concentrates30%

Edibles16%

Pre-Rolled6%

Topicals2% Other

3%

ColoradoQ2 2018 = $382m

Flower38%

Concentrates 32%

Edibles16%

Pre-Rolled8%

Topicals2%

Other4%

CaliforniaQ2 2018 = $683m

Flower41%

Concentrates28%

Edibles17%

Pre-Rolled8%

Topicals2%

Other4%

OregonQ2 2018 = $175m

by: Source:


And Arizona Q2 2018 Category Mix Shows Concentrates Already At 37%

Flower44%

Concentrates37%

Edibles11%

Pre-rolled5%

Topicals1%

Other2%

Arizona 100% = $169m

by: Source:


Concentrates: The Hottest Product Category in Cannabis

GreenEdge™ sales tracking


In CO, Concentrates Drove 40% Of Total Market Growth Over 4 Years

Q1 '14 FLOWERGROWTH

CONCENTRATESGROWTH

EDIBLESGROWTH

PRE-ROLLGROWTH

OTHER GROWTH Q1 '18

Category Drivers of growth CO Q1 ‘14 to Q1 ’18 ($M)=$371.3

$150.1

+$41+$90.6

+$61.7

+$17 +$11

by: Source:


Within Concentrates, In CO, Vape and Live Resin Have Continued Strong Growth, While Wax and Shatter Still Matter

-20% 0% 20% 40% 60% 80% 100%

Vape

Live Resin

Wax

All Other**

Shatter

Total CO Concentrates, H1 2018 vs H1 2017 % Growth

Vape49%

Shatter12%

Wax14%

Live Resin13%

All Other**12%

**All Other includes Bubble hash, Crystalline, Hash, kief, rosin

by: Source:

+54%

+25%

+85%

(1%)

(1%)

CO H1 2018Share by category


Within Concentrates, In AZ, Vape is 71% Growing at 83%

0% 20% 40% 60% 80% 100%

Vape

Live Resin

Oils

Shatter

Total AZ Concentrates, H1 2018 vs H1 2017 % Growth

Vape71%

Shatter10%

Oils6%

Live Resin5%

All Other**8%


by: Source:

+83%

+24%

+264%

+32%

AZ H1 2018Share by category


Within Concentrates, in CA, Vape’s Dominance Has Increased After Licensing

Vape87%

Shatter1%

Oils2%

Live Resin5%

Wax3%

Bubble Hash1%

Other1%


by: Source:

CA Licensed H1 2018Share by category

Vape83%

Shatter4%

Oils4%

Live Resin3%

Wax4%

Bubble Hash2%

CA Pre-Licensed H2 2017Share by category


A Taste of EdiblesGreenEdge™ sales tracking


37% CAGR for edibles in CO

Q1 '14 FLOWERGROWTH

CONCENTRATESGROWTH

EDIBLESGROWTH

PRE-ROLLGROWTH

OTHER GROWTH Q1 '18

Category Drivers of growth CO Q1 ‘14 to Q1 ’18 ($M)+25%

+37%+50%

+13%

+47% +29%

4 year CAGR

by: Source:


Within Edibles, Candy is the Star Performer

by: Source:

Beverages are flat so far at about 7%


Candy Picked Up 4 pts In CA

by: Source:


Tinctures Also Do Well In OR

by: Source:


Infused Foods Are More Popular In AZ

by: Source:


Brands and Brand ShareGreenEdge™ sales tracking


Brand Strength Across Categories - Already Top 5 Edibles Brands Have Over 40% Market Share

42% 49% 42%53%

17%

20%23%

22%

42%31% 35%

25%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

CA CO WA OR

Composition of Brand share by State % Q2 2017

The Rest

Next 5 Brands

Top 5 Brands

by: Source:


Some Brands Take The Express Route To The Top

by: Source:


Price TrendsGreenEdge™ sales tracking


Oregon Has Seen Steady Decrease In Flower Prices. Down 36% in 2 ½ Years

$-

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

$8.00

Average Retail price of flower in Oregon $ per gram

by: Source:

$4.60

$7.23 pre-tax prices


In California The Already High Prices Continued To Rise And Rose Faster After January 1, 2018

$-

$5

$10

$15

$20

$25

$30

$35

$40

$45

Average Retail prices in CA

Concentrates

Edibles

Pre-roll

Flower

by: Source:

pre-tax prices


CO – Flower (per gram) now down to $4.20

$7.07$6.62 $5.78

$5.02 $4.19$7.00

by: Source:


CO – Edibles prices have actually increased

$17.05$16.58$16.70

$15.24$13.41

$12.86

by: Source:


CO – Concentrates Down 21% in 2 ½ years

$-

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

$35.00

Average Retail price of concentrates in Colorado

by: Source:

$24.01

$30.53 pre-tax prices


What Are Cannabis Consumers Doing?BDS Analytics Consumer Insights


BDS Analytics’ On-going Consumer Research:

Adults

US, ages 21+

CAN, ages 18+

Consumer Type

ConsumptionDetails


Different Consumers present different innovation opportunities

By understanding Consumers, we can identify areas for development


Majority agree with some form of legalization

~80%of US and CAN adults agree there should be some form of legal marijuana usage

agree marijuana has medical benefits57% in CAN

64% in US88% Consumers in Med/Adult States

BDS Analytics Consumer Research: US adults 21+ and CAN adults 18+


54%in US

51%in CAN

BDS Analytics Consumer Research across TOTAL US sample of adults 21+ and TOTAL CAN sample of adults 18+

Legal Cannabis is new, Cannabis is not

The majority of adults 21+ have tried cannabis

2018 BDS Analytics | CONFIDENTIAL54

23%

38%

39%

54

Consumers™, Acceptors™, and Rejecters™

Past 6 Month Consumption Legally Available (Medical/Adult) US States: Consumers in Medical/Adult US

States & Consumers in CAN: Have consumed cannabis or cannabis products within the past six months

Acceptors: Would consider consuming cannabis or cannabis products in the future

Rejecters: Would not consider consuming cannabis or cannabis products in the future

21%

32%

47%

Past 6 Month Consumption Across Total Canada:



Men & WomenAvg Age. 40

Cannabis Consumers are Happy Campers

~50%Work

Full-time

~38% Physically

Active

~55%Enjoy

Outdoors

~30%Are

Very Social

~40%Spend More $

for Quality

~40%More Satisfied

with Life

~50%Are

Creative

~40%Like to Try New

Products

BDS Analytics Consumer Research across TOTAL US sample of adults 21+ living in states with legalized cannabis and TOTAL CAN sample of adults 18+


Music/Movies45%, US

41%, CAN

Snacks43%, US

36%, CAN

Chocolate25%, US

20%, CAN

Fine Dining18%, US

11%, CAN

Craft Beer12%, US8%, CAN

Wine11%, US7%, CAN

Cocktails12%, US8%, CAN

+

Consumers Are Pairing Cannabis With Other Activities

Exercise18%, US

12%, CAN



BASE: Past 6 month Consumers living in the United States who consume edibles n=1576C11. When using edibles [other than sublinguals under the tongue], what is your ideal THC dosage level at a time? Single response.C12. How much do you agree or disagree that…? Top 2 Box Frequency, 7-pt Scale.

About 50% of Edibles Consumers prefer dosages under 20mgs, but many are unaware of their preferred dosage

57

19%

28%

8%

14%

1%

30% Don’t know

Less than 5 mgs

5-20 mgs

21-50 mgs

More than 50 mgs

Preferred Dosage: PREFER LOWER CONCENTRATE PRODUCTS THAT ARE PORTION-CONTROLLEDTop 2 Box Frequency, 7-pt Scale. n=1576

LIKE TO NIBBLE DURING THE DAY ON HIGHER CONCENTRATE PRODUCTSTop 2 Box Frequency, 7-pt Scale. n=1576

Only use sublinguals


Use of Cannabis Impacts Other Health Categories

Have decreased OTC

medication use

Have decreased

prescription drug use

47%

Say marijuana has a role in their general personal

care and wellness

BDS Analytics Consumer Research in medical and recreationally legal states: AK, CO, CA, NV, OR, WAAdults 21+, among past six-month cannabis Consumers who have also used type of medication in past six months

40% 51%


The majority of Consumers indicate they consume cannabis to relieve pain

Base: US Level 1 and 2 States, Q1 2018

US Pain Management Consumers are past 6 month cannabis consumers who consume in order to generally relieve pain or to relieve pain of menstrual cramps or pain during menstruation using either edible, inhalable, or topical products.

58% of past 6 month Consumers are

PAIN MANAGEMENT CONSUMERS

51% of US Consumers consider marijuana their medicine vs. 39% in CAN


Leading ailments among Pain Management Consumers include both mental and physical conditions

44%

41%

37%

35%

31%

22%

22%

21%

17%

15%

12%

12%

10%

Anxiety

Back Pain

Stress

Depression

Pain

Knee or Hip Pain

Arthritis

Insomnia (unable to sleep)

Migraines

Tension headaches

Asthma

PTSD (Post Traumatic Stress Disorder)

Appetite (loss of appetite)



Pain Consumers have decreased their usage of prescription and OTC medications due to their cannabis consumption

DECREASED SAME INCREASED

PAIN CONSUMER

NON- PAIN CONSUMER

PAIN CONSUMER

NON- PAIN CONSUMER

Rx

OTC

44%25%

50%23%

12%12%

6%4%

36%56%

35%68%



Avoid Prescription Medications

Inhalables 53% 9%

Edibles 38% 8%

Topicals 35% 3%

Avoiding OTC and prescription medications is seen as a substantial benefit of cannabis consumption for Pain Consumers

PAIN CONSUMERS NON-PAIN CONSUMERS

Avoid OTC Medications

Inhalables 49% 8%

Edibles 28% 5%

Topicals 32% 10%




AND Pain Management Consumers consume cannabis differently

Inhalables Consumption by Time of Day:

15% 12% 17%23%

32%

54%

23%

6%

33% 28% 30%38%

44%

60%56%

18%

First thing inthe morning

Later in themorning

Earlyafternoon

Late afternoon Early evening Later in theevening

Before bed When I wakeup during the

nightNon-Pain Consumers Pain Consumers

Edibles-Non-Pain Consumers 7% 6% 12% 20% 26% 44% 14% 2%

Edibles-Pain Consumers 8% 9% 18% 21% 28% 31% 21% 5%

Topicals-Non-Pain Consumers 10% 11% 20% 17% 17% 29% 12% 1%

Topicals-Pain Consumers 29% 18% 14% 14% 26% 20% 37% 10%


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Join our panels – [email protected]

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Consumer Survey and Insights:

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Publications, Investor Research and Consulting:

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Investors, analysts, financial services:

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what’s hot and what’s not in annabis trends · 2020. 9. 1. · 2018 bds analytics |...

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