Concentrate Market Declines in U.S., Grows in Canada

Concentrates, like wax, shatter or resin products are more popular in mature cannabis markets. As prices have dropped and familiarity with the product grows, this niche product is slowly finding its place on cannabis shelves and in consumers’ baskets. Headset recently did a deep dive into a new report titled, “Cannabis Concentrates” to see what was happening in the concentrate market and found big differences between Canadian consumers and U.S. consumers. There were also differences in market share in established markets versus newer markets. 

According to Headset, whose data comes directly from sellers, concentrates are the fifth highest revenue category in both the US and Canada. The report also found that younger customers spend relatively more money on concentrates demonstrating their willingness to try something new versus older consumers who want to stick with traditional flower. Men are also more likely to buy concentrates than women. Typically the effect from a concentrate is stronger and more powerful and female cannabis consumers tend to migrate towards smaller dosage products. One vape company described a dollop of wax as being equivalent to smoking 15-20 joints. 

Canadians Growing To Like Concentrates

The concentrate category is increasing in Canada, whereas it’s declining in the U.S. Headset wrote, “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.” The report also wrote, “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.” Hash is another term for concentrates and really the original term for compressing parts of the cannabis flower until it becomes a sticky residue. Still, the market in Canada seems to have plateaued at 4% of total sales and has dropped in the U.S. In Canada, Alberta has the highest market share with 4.5% of sales to Concentrates, while Ontario has the lowest at 3.6%. After hash, Canadians prefer shatter (25%), live resin (22%), and then rosin (5%). 

Chart provided by Headset

U.S. Consumers

Even though the category has grown in Canada and declined in the U.S., the American market remains larger than the Canadian market. The report said, “US cannabis state markets have higher Concentrate market share than any Canadian provincial markets. Interestingly, the US states with the highest market share in 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 Colorado and Oregon, concentrates command 12% of the market and in Arizona and Washington, it’s over 9% of the market. Illinois and Michigan both clock in at 7% of the market for concentrate purchases. Live resin is more popular in the U.S. with 34% of the market so far in 2022 followed by rosin at 12% and then shatter at 7% and hash at 2%.

Chart provided by Headset

Cheaper Too

Headset found the average equivalized (EQ) price of concentrate products in both Canada and the US had seen some serious volatility. “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).” It went on to add, “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%.” The 1 gram package size seems to be the standard in both markets. 

In Closing

The concentrate market has its own holiday it likes to celebrate that brings attention to the category. July 10 or “Oil Day” celebrates all extracts as 7/10 upside down resembles the word oil. Last year, the holiday seemed to have fizzled out as the Fourth of July grabbed all the attention for holiday sales. Still, this is a loyal consumer who is a connoisseur of the concentrate and can’t be ignored.

Debra Borchardt

Debra Borchardt is the Co-Founder, and Executive Editor of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Master's degree in Business Journalism from New York University.

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