headset Archives - Green Market Report

Adam JacksonJanuary 13, 2023
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5min11600

Nevada has officially joined the list of legacy cannabis markets facing double-digit sales slumps.

A report by data firm Headset posits that the state has likely reached its peak of consumer demand as overcrowded markets cool down from the lockdowns sales boost two years ago.

The report pointed to a nearly $100 million drop in total revenue last year, a precipitous fall after the state posted more than $800 million worth of annual sales through October 2021.

The findings come as the Sliver State tees up a statewide rollout of consumption lounges after last month announcing license winners.

Sales Per Capita Still High

Despite the price compression, however, the second smallest state market ranks toward the top of the list when it comes to cannabis sales per capita due to the “immense tourism industry,” wrote Dai Truong, managing director at Arlington Capital Advisors and author of the report “A deep dive of the Nevada cannabis market.”

Las Vegas sees roughly 40 million tourists annually and visitor volume in 2022 rose by 27% through October, according to figures released by The Nevada Cannabis Compliance Board (CCB) and the Nevada Department of Taxation (DoT).

When normalizing sales totals for population size, Nevada has the second most sales per capita behind Colorado. The 13.1% downturn in year-over-year sales sits with and behind Washington (-13.1%), Colorado (-16.2%), and Oregon (-17%).

“For context, the rest of Headset tracked markets combined have seen total sales decline 1.7% year over year,” Truong added.

And while the state shares many of the same category trends versus other markets across the country, customers seem to show a stronger preference towards flower (up 3.3%) and pre-rolls ( up 1.4%). In contrast, concentrates have 3.3% less of the total sales than the rest of the U.S. market.

Vapes Win

That same trending decline does not apply to the ever-popular vape pens category, which has grown in the state by 5.1% in the last year and has absorbed most of the void created by flower’s 8.4% drop in total sales share.

When it comes to basket size, the state had lost 12.6% of its value since October 2021, falling nearly $10 on average.

On pricing, the report pointed to the decline in average item price (AIP) sharply declining between Oct. 2021 through Oct. 2022 by 12.2%, nearly in line with the 12.7% fall in AIP for the rest of the market in that same time period.

Still, “while Nevada is experiencing pricing compression along with the rest of the market, their AIP in October of this year is 16.8% higher than the rest of the U.S.,” the report said.

The average discount has grown 7% from 12.8% to 19.8% between October 2021 and October 2022. Lower item prices and higher discounts reduce already strained margins for retailers.

Furthermore, depressed prices and growing discounts “indicate lower profits for retailers that have seen units per basket stay relatively flat over the last 12 months.”

As the race toward national brand recognition churns along, the number of brands throughout the state’s dispensaries has also stalled “and even shrunk by about 6% with 353 distinct brands capturing a sale” in 2022 so far.

A maturing market is partly to blame, in addition to other economic headwinds created by an artificial spike in demand in 2020, as the brand count increased by 40% from 270 brands to 378 between 2019 and 2020.


StaffNovember 22, 2022
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5min8730

The Daily Hit is a recap of cannabis business news for Nov. 22, 2022.

ON THE SITE

Rhode Island Green Lights Recreational Sales for Five Dispensaries

Recreational cannabis sales will kick off next month in Rhode Island for at least five existing medical dispensaries, Gov. Dan McKee announced today. In a press release, McKee said he and the state Department of Business Regulation have granted “hybrid retail licenses” to the five dispensaries, which will be able to start selling adult-use cannabis on Dec. 1. Read more here.

Oregon Governor Pardons 45,000 Cannabis Convictions

Oregon Gov. Kate Brown this week announced she’s heeding President Joe Biden’s call last month for U.S. governors to pardon low-level cannabis convictions and pardoned roughly 45,000 residents. Read more here.

New Products Drive Revenue Growth for Canadian Edibles Maker Indiva

Canadian edibles producer Indiva (TSXV: NDVA) (OTCQX: NDVAF) launched a “record number” of new products in the third quarter of 2022, which drove up revenues to year-over-year growth of 5.9%, but the company still recorded a loss of $1.9 million. Read more here.

Medical Marijuana Inc. Posts Falling Revenue, Focuses on Overseas Hemp Ventures

Medical Marijuana Inc. (OTC: MJNA) saw revenue fall in the third quarter despite cutting costs in during the period, according to financial results for the quarter ended Sept. 30. Those measures mostly benefitted margins for the company. Read more here.

Report: Cannabis Flower Prices Continue Freefall

Inflation might be getting all the headlines, but cannabis flower appears to be immune from its influence. According to data from cannabis analytics firm Headset, the most popular consumption format for cannabis has been suffering wide-scale price compressionRead more here.

IN OTHER NEWS

Etain LLC

The New York State Cannabis Control Board and the New York State Office of Cannabis Management have approved Etain LLC’s change of control request. Etain is the owner and operator of a legally licensed Registered Organization with cannabis cultivation and manufacturing facilities and retail dispensaries in the state of New York. This approval clears the path for RIV Capital Inc. (CSE: RIV) (OTC: CNPOF) to complete its previously announced acquisition of Etain and Etain IP LLC. Read more here.

Oregon

Oregon cannabis regulators approved a final rule Nov. 17 to address gaps in the regulated laboratory testing sector that have drawn licensee complaints about THC potency numbers in the competitive state environment. Under the new rule, the Oregon Liquor and Cannabis Commission may require a licensee to submit samples identified by the commission to a laboratory of the commission’s choosing to be tested in order to determine whether a licensee is in compliance with the cannabis testing. Read more here.

Société québécoise du cannabis (SQDC)

For the second quarter of its current fiscal year, the Société québécoise du cannabis (SQDC) has reported comprehensive income of $22.3 million. The SQDC is a government corporation mandated to distribute and sell cannabis in Québec with a focus on protecting customers’ health and safety. Read more here.


Joanne CachaperoJuly 7, 2022
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8min2370

Canna-tech companies were busy over the long 4th of July weekend, analyzing sales data from their various platforms for what was expected to be one of the biggest weeks of the year for cannabis retailers. In Canada, the national holiday Canada Day is celebrated on July 1, with vendors hoping for a holiday spike in sales.

Last week canna-tech company Surfside predicted that the Thursday before the 4th of July, 2022, might be the busiest day of the summer in the U.S. Their analysis also indicated that Fridays in the summer have a magic of their own and consistently saw increased sales compared to other days of the week and Fridays during other times of the year.

Pregaming the 4th

According to data analyzed by canna-tech companies Akerna Corp. and Flowhub, the Friday before the 4th of July turned out to be the big day for retail sales in the U.S. 

Akerna (NASDAQ: KERN) said that according to their data, Friday, July 1,  became the second highest-grossing sales day for 2022, with USD $106.7 million in sales. Data from Akerna’s MJ Analytics platform indicated that compared to $89.6 million in sales on the same day in 2021, this year showed a 19.1 percent sales increase. Monday, July 4th, had lower sales, which was attributed to stores being closed for the holiday. 

Data from Flowhub’s platforms said sales on Friday, July 1, were up 15 percent compared to a regular Friday. The Saturday and Sunday before 4th of July saw a five percent increase each day, while the 4th of July saw a scant two percent increase. Flowhub added that 33 percent of sales on their platforms for the holiday weekend included a discount. 

Delivery and distribution company Lantern said sales were strong before and throughout the weekend, with customers purchasing “flower, then edibles, and then vapes, (with) more customers than usual who bought drinks and pre-rolls.”

SpringBig, a company that develops customer loyalty program technology for cannabis vendors, said their platform saw a slight increase in overall sales, with $16.9 million this year, compared to $16.8 million for the same weekend last year. “The sales and loyalty redemptions numbers are almost identical between last year and this year,” they said.

Canadian Declines

Data company Headset saw declines in sales this year, specifically on Canada Day and July 4th.  

In Canada, on July 1, Headset noted an average decline in sales of 23 percent across all provinces, with Ontario experiencing the biggest drop at 29 percent. Across product categories on Canada Day, there was a decline in sales for typically popular items including “vapor pens (-27%), flower (-25%), oil (-22%), and concentrates (-19%).” The company did not have comment on what may have triggered sales to trend lower or if sales prior to Canada Day were elevated.

In the U.S., July 4th saw a 6.6 percent drop in sales, compared to the four previous Mondays. Across product categories, Headset data indicated, “Not all products fared the same with Pre-Rolls  actually seeing an increase in sales of +6% on July 4th while Topicals and Capsules (traditionally consumed in a more health and wellness setting) saw declines of -17% and -28% respectively.”

Dab Day Outlook

With medical and adult-use cannabis vendors now looking forward to July 10 – aka 7/10 or cannabis concentrate event Dab Day – it remains to be seen if the little-known cannabis holiday will grow in popularity. With looming global recession, worsening inflation and market mayhem in effect, consumers may be looking for bargains or more conservative with spending, though July typically sees higher overall sales than other months of the year.

In comparison, Headset shared insights for Dab Day 2021 with Green Market Report after last year’s holiday. Their data indicated that U.S. sales increased slightly, while 7/10 sales in Canada remained flat:

  • Total Sales Growth: On Dab Day 2021 (7/10/21) total US cannabis sales slightly increased by 3.3% over an average of the previous four Saturdays. Canadian cannabis markets experienced more or less flat sales over the same time frame with a decrease in daily sales of -0.7%.
  • Category Sales Growth: US cannabis customers showed up for ‘Dab Day’ 2021. Concentrate sales increased by 67.4%, and was the category with by far the highest sales growth on that day.  Vapor pens, which we’ve seen also get a little lift from ‘Dab Day’ in the past, increased in sales by 7.1%.  Unlike the US, ‘Dab Day’ was not as successful in Canada; concentrate sales increased by only 5.5%. 
  • Concentrate Segment Growth: In the US on Dab Day 2021, Rosin products had the strongest growth, increasing in sales by 213% over the previous four Saturdays. HTE (+153.4%) was the next most successful segment. 
  • Dab Day Discounts: Dab Day was a fantastic day for American concentrate fans to stock up on products this year. In the US the average discount on concentrates grew by a whopping 60%, rising from 16.0% during the previous four weeks to 25.6% on 7/10/2021.

Debra BorchardtApril 22, 2022
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9min3760

Several cannabis data providers have confirmed that this year’s April 20 holiday was the highest ever – in sales. Despite falling in the middle of the week, sales were determined to be significantly higher than an average Wednesday and the highest day of sales in the past four years. Perhaps because some of these states have more mature markets. shoppers were spending slightly less on average, but there were more people shopping.

Cannabis consumer product preferences are also shifting year over year as more customers are reaching for something different from traditional flower for 420. Edibles and concentrates are winning over consumers. The data providers say that this can be partially attributed to the growing maturity of both cannabis markets and the consumers within them. The East Coast is quickly becoming the hot spot of the cannabis industry as Massachusetts won the day. While online ordering continues to have fans even after the pandemic, cannabis consumers continue to love going to their brick & mortar store.

Black Market Certified 420 party in NYC Photo by Dave Allocca

 

420 Sales

Headset reported that in the US, the average cannabis store experienced 148% higher sales on 4/20 than over the previous four Wednesdays. Average discounting increased by 72%.
In Canada, the average cannabis store saw sales grow by 65% and average discounts rise by a whopping 92%.

In both countries, Headset said that sales growth was driven primarily by increases in total transaction volume. In the US, the median cannabis store saw a 107% increase in transaction volume on 4/20 in comparison to the previous four weeks. In Canada transaction volume at the median store increased by 57%. However, in the US customers purchased more per transaction on 4/20, with the median store seeing a 19% increase in average basket size. In Canada, average basket size at the median store only increased by 3%.

As usual on holidays, Headset said that beverages were the top-performing products in both countries. On 4/20 sales of Beverages grew by 110% in Canada and by 176% in the US. Pre-Rolls also performed well in both markets with 74% growth in Canada and 150% growth in the US. In Canada, Edibles were the second-best performing product category on 4/20 with 83% sales growth. Concentrates took the silver medal in the US with 155% growth.

Flowhub’s data agreed with what Headset experienced. The company said that Edibles saw a major jump in popularity in just a year, climbing 5%. Flower was also less popular this 420, while concentrates had a slight jump year over year. “It’s clear that consumers are beginning to move away from traditional products like flower and are consuming more edibles and concentrates instead. There is also a slight decrease in accessories, clones, and seeds – potentially caused by a maturity in markets, people don’t need as many accessories if they’re regularly consuming.”

Flowhub also noted that online orders made up 3% of all transactions on 420 this year, the rest were in-store. Also, more than twice as many online orders were placed on 420 in 2022 vs. 420 in 2021.

Jane Technologies reported that stores using Jane in both 2021 & 2022 saw an 11% increase in online sales. Overall Jane had ~35% growth in GMV between 2021 & 2022. Stores using Jane in both ‘21 & ‘22 saw a 34% increase in edible sales. Stores using Jane in both ‘21 & ‘22 saw a 43% increase in vape sales. Stores using Jane in both ‘21 & ‘22 saw a 22% increase in flower sales. Stores using Jane in both ‘21 & ‘22 saw a 10% increase in extract sales.

Jane said that the average cart size on 4/20 increased 15% compared to the previous four Wednesdays and overall sales on 4/20 increased 160% compared to the previous four Wednesdays.

East Coast Wins

Flowhub reported that the East Coast was recording very high average revenues per location. Flowhub wrote that “This is likely due to how new the markets are and the lack of competition. There are also likely high numbers of people driving in from out of state to purchase products in these states whereas states like California and Colorado are more mature and accustomed to cannabis. Oklahoma’s very low average sales per location can be attributed to the massive number of licenses in the state. The competition is too high for locations to haul in the same revenues as lower licensed states.”

Top-selling states according to Flowhub were as follows:
● Massachusetts had the highest average revenue per location on 420 of all Flowhub markets. The state also had the highest average basket value ($130).
● Maryland had the second-highest average revenue per location on 420 of all Flowhub markets.
● Oklahoma had the lowest average revenue per location of all Flowhub markets.
● Some states with very high sales compared to an average Wednesday:
○ Michigan’s average sales were 175% higher than an average Wednesday.
○ Maryland’s average sales were 156% higher than an average Wednesday.
○ California’s sales were 134% higher than an average Wednesday.

Jane also reported that it experienced year-over-year growth for these states: Arizona, Michigan, California, Colorado, Illinois, and Florida.
i. Arizona
1. Stores using Jane in both ‘21 & ‘22 saw a 100% increase in sales YoY.
ii. Illinois
1. Stores using Jane in both ‘21 & ‘22 saw a 54% increase in sales YoY.

iii. Pennsylvania
1. Stores using Jane in both ‘21 & ‘22 saw an 18% increase in sales YoY.
iv. Florida
1. Stores using Jane in both ‘21 & ‘22 saw a 10% increase in sales YoY.
v. Michigan
1. Stores using Jane in both ‘21 & ‘22 remained flat in sales YoY.
vi. California
1. Stores using Jane in both ‘21 & ‘22 saw a 15% decrease in sales YoY.
vii. Colorado
1. Stores using Jane in both ‘21 & ‘22 saw a 20% decrease in sales YoY.

Ordering Trends

All of these dispensaries have to place orders for inventory and Leaflink has excellent data that shows how the companies were preparing for the big day. The company said that overall, sales trended upwards in the weeks prior to 4/20 in 2022. “Sales increased week-over-week, starting on 3/27 with 6.1% growth. The next week sales grew 6.9%, and an additional 2.7% in the final full week of sales prior to 4/20. Each week set a new high watermark for total sales in LeafLink, and the week of 4/10 is now the biggest week for sales in LeafLink history.”

When it came to specific state data, Leaflink noted that the vast majority of states saw sales grow in the 30 days before 4/20 with Colorado being the only exception. States included below (CO excluded) grew by varying percentages from 14.9% in Washington to 44.3% in Massachusetts over this time period. Colorado saw sales decrease by 2.3% in the 30 days prior to 4/20 compared to the previous period.

Black Market Certified 420 party in NYC photo by Dave Allocca

 


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The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


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