LeafLink Archives - Green Market Report

Debra BorchardtApril 22, 2022
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9min22670

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

 


StaffMarch 12, 2022
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9min15370

LEAFLINK

CLAIRE MOLONEY – SENIOR REGIONAL DIRECTOR, EAST, LEAFLINK

 

What is your proudest accomplishment in the cannabis industry?

Of course, it has been a very special journey as the first hire of LeafLink to be a part of our growth from the beginning: I still fondly remember celebrating the very first order on our marketplace back in 2016 (shoutout to Infinite Wellness in Colorado!), and now we have over 10,000 brands and retailers doing nearly $5B in orders on our much more robust supply chain platform. There are so many big team wins and contributions that have gone into that.

 

If I had to pick one thing, though, it would be that I’m proud of the amazing team of nearly 300 people (and counting) that LeafLink has built. I genuinely enjoy working with my fellow LeafLinkers – they are some of the smartest, most passionate people I’ve ever met. We really don’t have anyone simply clocking in and clocking out here, because everyone is so dedicated to building a product and an experience that will shape this industry for the better.

 

Do you feel that the cannabis industry has more opportunity for female-identifying people than other industries?

Yes, I do. Regulators, especially in states like NY and MA, have been extremely intentional in designing inclusive regulations that give more access to people of color, women, veterans, and other underrepresented groups. Because of this, we’re seeing more female-founded companies and commitments to hiring women than we might in other traditional industries. Of course, there is always more work to be done here, and I’m excited to see the industry keep pushing itself in a more equitable direction.

 

Do you feel you have to work twice as hard as male colleagues or do you think the industry has moved past that?

I think two key things make cannabis a great industry for women: the amount of opportunity and the awareness surrounding bias of all kinds (gender, race, sexual identity, and more). The birth of cannabis during this specific time period is unique, because there has been a global shift in how people are thinking about equality, and the cannabis community is really embracing that in how we think about moving this illicit industry to a regulated one, and making sure we do that thoughtfully.

 

However, I don’t think the work is anywhere near done. I do think women still need to work harder than their male colleagues do to prove that they are deserving of the same opportunities. There are still systemic biases that persist that create barriers for us (and for many other underrepresented groups). But, I think we should all be encouraged by the progress we’re making: every step forward we’re taking, no matter how small, is a step the women who follow us won’t need to take when they go for that promotion, that coveted initiative, that leadership position. On a personal note, every extra hour I spend perfecting presentations, crafting decks, or preparing for client meetings might just show someone in that room how powerful a woman at work can be, and that might be another hour a future woman won’t have to spend. I find that extremely motivating. 

 

What was your biggest challenge in business and how did you overcome it?

 

My personal biggest challenge was learning how to get comfortable with constant change at a rapidly growing startup. As an early hire, you wear many hats – but over time, as the team grows, you inevitably need to give away your responsibilities as new, experienced colleagues join the company. At first, I was nervous about what giving away parts of my job would mean for my own future at LeafLink. Now that it’s happened so many times, I’ve learned that giving away my responsibilities is one of the most powerful things I can do for my own career, because it’s given me the chance to seize new initiatives or to spend more time on what I’m good at. Now, I jump at the opportunity to give away parts of my job to new hires (P.S. we’re hiring!)

 

What has you or your company done to help give more opportunities for women?

LeafLink has made diversity in hiring a key initiative and our Talent team reports on how we’re doing compared to our goals during our Town Halls. We spend extra time hiring to ensure we can interview diverse panels of candidates, especially for leadership positions. We partner with a number of groups, such as Women Who Code, to try to increase the number of candidates identifying as female in our pipeline. 

 

In addition to that, we have a Women’s ERG that meets monthly to foster a deeper connection across women at LeafLink. We have a buddy program within that group where women meet 1:1 to discuss the opportunities and challenges in their chosen career path. This has built a real internal community that can discuss ways to improve LeafLink for women, and it has surfaced new ideas and initiatives that we can take on to continue to make LeafLink a great place for women to work. 

 

What are your personal goals for 2022?

My personal goal in 2022 is to make a real impact in the upcoming adult use market in New York. I was born and raised in New York, I went to a state-funded college in New York, and I’ve worked in New York City for the last decade. I’ve spent the last 6 years launching LeafLink in states across the country, and I finally get the chance to launch it here – it’s truly coming full circle. I am so inspired by the regulators and community in New York, because I have witnessed their serious dedication to making our market the most diverse and inclusive in the country. Whether it’s bringing LeafLink’s technology to this market to help entrepreneurs rapidly scale their new businesses or simply lending advice to prospective licensees based on my years of experience in the industry – I want to do my part in making New York the best cannabis market in the world.

 


StaffFebruary 4, 2022
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4min8540

LeafLink

Dennis Williams / Director of Content and Brand

Dennis Williams is the Director of Content & Brand at LeafLink. He’s focused on leading content strategy to support the decision makers in cannabis of today and tomorrow. He works alongside our business lines at LeafLink, our clients, and our partners to continue growing our community of brands, retailers, and operators. Dennis is a former two-time Linkedin Top Voice and has a track record in crafting digital content to drive strategic growth in B2B industries.

When did you formally enter the cannabis space?

I formally entered the cannabis space in the summer of 2021.

What made you decide to work in the cannabis industry?

I believe everyone in this industry is an advocate for the redefinition of cannabis just by the nature of our work. The opportunity to have that impact through technology is what continues to excite me each and every day.

As the cannabis industry continues to develop, so many more sectors of jobs will begin to emerge, and I’m passionate about being a part of this change.

Do you feel there is more opportunity for Black Americans in the cannabis industry versus a more traditional industry? Yes or no and why?

The opportunity for black men and women in cannabis is growing but there is still work to be done to create space for representation across each division of the cannabis industry.

Legal cannabis is scaling quickly across the nation, and I’m excited to see how black men and women can assume new roles of leadership.

What is your personal goal for 2022?

My personal goal is to offer a platform to as many minority cannabis business founders and social equity license owners as I possibly can. There’s a lack of enablement for smaller entities and minority owners, and this constantly developing industry doesn’t leave many historical experiences to help navigate and forecast for what’s to come.

As a technology-first wholesale cannabis organization member, I’m in a position to elevate the voices of the industry that are doing positive and meaningful work. Having this level of impact through the elevation of others is where I truly see myself making a difference.


StaffFebruary 2, 2022
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5min14510

LeafLink

Jess Hollins / Senior Regional Director

Jess Hollins brings years of business operations and strategy consulting experience to her role as a Senior Regional Director at LeafLink where she oversees the go-to-market strategy across the Mountain West and Midwest regions. Jess works closely with all of the business lines at LeafLink (Insights and Marketing services, Payments, Logistics) to ensure that LeafLink is continually evolving our offerings to solve our customers’ problems in any given market. Prior to LeafLink, Jess was a Director of Business Operations at National Veterinary Associates and worked as a consulting manager at Bain & Company in their energy and private equity practices.

When did you formally enter the cannabis space?

My formal entrance into the space came in the spring of 2021 when I joined LeafLink.  I was still living in Canada when cannabis was federally legalized and almost made the pivot into the space at that point, but wasn’t fully swayed until I moved to California.

What made you decide to work in the cannabis industry?

The idea of helping shape the way an entire industry is set up was inspiring to me. I saw cannabis tech as a way to merge the skill set I’ve developed over the years with an industry that’s still in its nascent stages in a lot of ways.

Since cannabis was made federally legal in Canada in 2018, I’ve been passionate about Black people having a significant share of the wealth created in this space.  Whether that was me personally or helping uplift others that were carving out their own space.

Do you feel there is more opportunity for Black Americans in the cannabis industry versus a more traditional industry? Yes or no and why?

While I’ve been surprised at how progressive and forward-thinking the industry is as a whole, I still believe that there is a lot of room for growth here. I think governing bodies, public and private companies, are all establishing the “rules” with social equity in mind, which makes me optimistic that that will result in more representation than there would have been otherwise. Like most other industries, I still believe it’s easier for those with an established reputation and easy access to capital to develop a stronghold in the space and push those that don’t meet that criteria to the fringes.  I’m glad to see organizations actively fighting against that outcome.

What is the most successful social equity effort in your opinion? Can be a charity or company program. 

It’s hard for me to play favorites, but I’ve loved keeping tabs on all of the various initiatives different states and companies are establishing. Whether it’s donating time and expertise to help social equity license holders establish their business or working to expunge the records of those with cannabis-related offenses – it’s all necessary and all positive to me.

What is your personal goal for 2022?

My personal goal for 2022 now that I’m starting to get my feet under me regarding the industry, is to provide as much support as possible to social equity founders and small businesses.  With my background and the space that I occupy at a company like LeafLink, I want to give my time and brainpower to help carve out as much space (and wealth) as possible for Black owners.  I’m also excited to start participating in more industry events and deepen my relationships with other Black leaders in the industry.


Debra BorchardtJanuary 6, 2022
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10min15890

Cannabis data providers have weighed in on the 2021 holiday sales for dispensaries with some surprising results. The data included the Thanksgiving holiday and then tracked sales through to the end of Christmas. Most agreed that sales increased in 2021 despite the resurgence of the new Covid fear with the variant Omicron. Consumers upped their cannabis shopping throughout the month of December causing Christmas week comparisons to be less strong than in the past. Still, sales remained elevated leading up to Christmas in both the Canadian and U.S. markets.

Increased Sales

Headset said that its data showed that Canada saw a rise in sales of more than 26% while the US saw an increase of 17% during the holiday month. Headset reported that in Canada, sales were up by 8.9% versus the previous four Fridays. In the US, sales increased by 6.0%. In Canada, Saskatchewan had the largest increase in sales, up 12% over the previous four Fridays. In the US, Michigan had the strongest showing with a 13.7% increase in total sales. 

LeafLink is a wholesale cannabis platform and as such has visibility into orders that licensed retailers place from the brands they carry. In December, sales through LeafLink increased by 6.8% when compared to the average growth rate over the prior three months – signaling that the holiday season positively impacted sales this year. 

Cannabis delivery company Lantern said it saw consumers start stocking up their holiday stashes earlier this season. Specifically the company noted that sales started to increase the second weekend of December with a +56% increase in daily order volume. “That trend continued through December, a +26% lift in order volume and +7% increase in AOV the week before Christmas, peaking the day before Christmas Eve with a +51% lift compared to our daily average. Lantern reported a +110% lift in order volume the three days before New Year’s Eve vs. three days prior, peaking three days before NYE with a +56% lift in daily order volume.

Springbig reported that starting from a week before Christmas and going into New Year’s Day, it saw (excluding Christmas day) $276 million in total sales with a daily average gross of $20.82mm. This was an 11% increase over the same period last year.In terms of how big the increase was, as compared to normal days of the year, we see that last year had a roughly 50% increase over normal while this year we only saw 21%. This could be due to the major Covid outbreak that has occurred recently. Another hint that this may be the cause is the fact that last year Jan 1st saw $15 million in sales while this year only saw $13 million.”

Flower Power

While some of the ingestible categories got big lifts, flower continues to command the market. Leaflink said that flower was the most popular category, making up around 32% of sales through LeafLink in the month prior to the holidays. Cartridges were the second most popular, at around 24% market share. Leaflink said that both were relatively consistent with the previous month, showing that buyers did not significantly change their purchase habits into different categories for the holiday season. The most popular Flower subcategory in the month leading up to the holidays in 2021 was Packaged Flower at 15% of sales, and the second most popular was Bulk Flower at 14.7%.

Jushi (OTC: JUSHF) also reported that Flower remains the number one category leader in demand and interest from patients and consumers. “However, we saw an aggressive uptick trend in disposable and edible sales in 2021,” said the company. 

Discreet products were also big winners. Perhaps consumers wanted to have their cannabis but not be obvious about it when visiting friends and relatives. Lantern said, “What’s interesting about our trending products in Boston for the holiday season, was that our most popular products were discreet and designed to share – predominantly edibles, drinkables, and pre-rolls (typically flower products are our best-sellers). Similarly in Detroit, pre-rolls were our most popular holiday product (party-ready for individual sharing and more discreet).” 

Headset’s data seemed to agree. Their data from Canada showed that the categories that saw the largest sales increase on New Year’s Eve were: Tincture & Sublingual (+30%), Concentrates (+23%), and Beverages (+21%). In the US, the categories with the largest sales response were: Beverages (+18%), Flower (+8.5%), and Concentrates (+7.8%).

Jane Technologies noted that edibles online sales were up over 10% in December 2021 compared to the previous three months and topicals online sales were up over 9% in December 2021 compared to the previous three months. They noted that Airo Black Mamba Specialty Pod online sales were up over 290% in December 2021 compared to the previous three months and Incredibles Cookies & Cream 100mg chocolate online sales were up over 200% in December 2021 compared to the previous three months

Christmas Coupons

With so many shoppers, it was a wonder why anyone would offer a discount, but then people love a bargain. Plus competition is heating up in some markets. Flowhub said that dispensaries were discounting for the holidays, but the discounts themselves weren’t huge.

Flowhub reported the following discount data:

  • Typical Day = 18% of transactions include a discount 
  • Christmas Eve = 39% of transactions included a discount 
  • Christmas Day = 40% of transactions included a discount 
  • New Years Eve = 39% of transactions included a discount 
  • New Years Day = 38% of transactions included a discount
  • Across the Christmas and New Years’ holidays, the average discount amount stayed consistent at $5.00 off their total amount. 

Headset’s discount data found a modest increase in discounting on New Year’s Eve in both Canadian and US cannabis markets. Noting that tThe average discount in Canada on New Year’s Eve was 4.0%, up by about 10% over an average of the previous four Fridays(3.6%). The average discount in the US on New Year’s Eve was 21.1%, up by about 13% over the previous four Fridays (18.6%).

Cali Sober

After all that holiday drinking, many people look at January as a month to sober up and give their bodies a break from all that alcohol. Lantern said, “As we head into the new year, we’re seeing consumers really embrace “Dry January” with our record-best Monday, +29% lift in daily order volume.”

 

 


Debra BorchardtDecember 7, 2021
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13min51821

Wholesale cannabis prices have fallen this year and the impact was felt by several companies and in particular – those in California. Cannabis Benchmarks data shows that California’s Spot prices have been on a freefall since June. Cannabis Benchmarks said that prices have dropped by as much as 30% this year. Plus, as outdoor harvests have ended that product is hitting dispensary shelves, which could cause prices to go even lower. 

Leafly’s Cannabis Harvest Report said that in the 11 legal adult-use US states, cannabis supports 13,042 licensed farms that annually harvest 2,278 metric tons of marijuana or more than 5 million pounds of weed. The wholesale cannabis crop brings in $6.2 billion annually, ranking it as the fifth most valuable crop in the United States. Only corn, soybeans, hay, and wheat bring in more money to American farmers. The report also stated that legal cannabis is the single most valuable agricultural crop in Alaska, Colorado, Massachusetts, Nevada, and Oregon, but remains completely uncounted and ignored by state agriculture officials. 

Alex Feldman General Manager, Insights & Marketing Services at LeafLink said, “California prices are still depressed as of early December due to a number of factors. Growing conditions were more favorable this year compared to last, new entrants came into the market anticipating a post-pandemic recovery, and there is continued downward pressure from the black market.” 

Too Much Marijuana

Although demand for freshly-harvested material could help steady price initially, as has been the case in some previous years, the rumblings in California have suggested that an early harvest price bump may not be in the cards this year due to inventory hangover from 2020 and this summer’s light-deprivation crops swamping the market.

Jonathan Rubin, Founder and CEO of Cannabis Benchmarks said that in addition to California, Oregon and Colorado were also seeing a significant drop in wholesale flower prices. “For the West Coast states, there was a significant amount of inventory that remained unsold deep into this year from a big outdoor harvest in 2020. In California, it seems that 2020 and 2021’s harvests were similarly robust. Additionally, cultivators that had spent previous years getting through the state’s stringent licensing process came online and started producing this year, including larger light deprivation operations outside of northern California, and generated a surge of supply beginning this summer, which caused prices to start to fall ahead of the autumn crop.”

In addition to California, Rubin said that in Oregon it seems that growers took record-breaking demand during the first summer of the Covid pandemic as a signal to ramp up production. “Even before the fall harvest, from roughly January through August this year, indoor and light deprivation growers were bringing in harvests that were a good bit larger than in 2020. Regarding the fall outdoor harvest this year, recent data from Oregon shows that outdoor growers have harvested about 55% more wet weight than they did in 2020, a huge increase in output,” he added. With regards to Colorado Rubin said that cultivators also ramped up production in 2020. “Data from the state MED shows that licensed growers in Colorado produced 40% more flower in 2020 than was purchased by adult-use consumers and medical patients, leaving a large inventory overhang,” said Rubin.

Low Prices Hurting Companies

Cannabis companies began to inform investors about the impact of the low prices during the last earnings season. Some were pretty upfront about the situation, while others just dropped hints. 

TPCO also known as The Parent Company (OTC: GRAMF) was one of the companies to deliver sobering news to investors. It reported that sales in the third quarter dropped by 26.7 % from the second-quarter revenue of approximately $54.2 million and blamed the decline on a decrease in bulk wholesale flower and bulk wholesale oil prices during the third quarter.  Wholesale revenue fell to $26.9 million versus $42.3 million in the second quarter and this was attributed to the decrease in whole flower pricing during the quarter. TPCO said that the charge was based on the softening of the California cannabis market. The company also insisted that the challenges it faced were not unique and that the entire California market was experiencing these issues, however, few other companies announced taking a $570 million charge during the quarter. 

Similarly, Harborside (OTC: HBORF) said it was withdrawing its previous revenue guidance for 2021. A variety of reasons were given including a decline in wholesale pricing for bulk products in the California market and the beginning of a commoditization decrease in wholesale revenues as a result of a decline in wholesale pricing for bulk products in the California market. Harborside also said that the California retail market was experiencing a softening in consumer demand. Operationally, the company said it implemented a change in its harvest procedures which delayed flower production in the third quarter of 2021 to allow for the adoption of a perpetual harvest schedule beginning in the fourth quarter. 

Glass House Brands (OTC: GLASF) CEO Kyle Kazan said during its recent earnings announcement that the California wholesale market faced considerable pricing challenges, as a result of overproduction in the third quarter. “While we expect the weakness in pricing to persist in the near term, we have proven the strength of our efficient operating model and the ability of our team to navigate a rapidly changing industry,” he said. The company reported that wholesale biomass revenue fell 18% despite a more than doubling of unit volume sales as flower wholesale prices fell by 48%, negatively impacting revenue by $4.1 million. Glass House also said it no longer expects to achieve the 2021 and 2022 revenue and profitability targets it had previously announced. The company now expects fourth-quarter revenues to be flat to down slightly compared to the third quarter in 2021 revenues of $17.2M. Kazan seemed to take the challenge in stride saying, “In Q3, our revenue (and that of everyone else of size in our market), took a hit from the significant drop in California’s wholesale flower pricing, and we think the difficult pricing environment will stick around for a while. “

Columbia Care (OTC: CCHWF) opted to just drop hints saying during its earnings announcement that there were some “wholesale pricing dynamics in some markets, such as California and Pennsylvania, and competitive market share dynamics in Florida.” After reading the other company comments, Col-Care’s soft pedal is really downplaying the situation. 

Slowing Sales

Of course, no one wants to suggest that sales could be maturing in some states. Rubin also said Cannabis Benchmarks noted that the expanded production coincided with slowing sales after the initial pandemic boom in 2020. “Beginning this spring and summer, sales began to plateau and then began to decline in late summer, continuing into the autumn and early winter. So in contrast to 2020 when demand was spiking and sales were breaking records in many legal cannabis markets, that has slowed in the second half of 2021 and recent month’s sales in the states under discussion are down year-on-year.” That statement agrees with Harborside’s assessment. 

Higher Energy Prices

Not only are these companies facing slowing sales, too much inventory, and falling prices, but they are also getting squeezed by higher energy costs, Granted if you’re an outside grower in California, you likely encounter water pressures. The recent Consumer Price Index (CPI) for all items jumped 0.9% in October and there were notable increases in the energy and energy services (utilities) sectors. Energy prices rose 4.8% in October with gasoline up 6.1%, fuel oil up 12.3%, and electricity up 1.8% on the month.

Indoor growers rely heavily on electricity to run lights and massive HVAC systems. They are known to be energy hogs. Over the past 12 months, the CPI reports that overall energy prices have risen 30%, with energy commodities, gasoline, and fuel oil, up 49.6% and 59.1%, respectively. Energy services (utilities) are up 11.2% year-on-year. 

In Closing

The question will be who can weather this storm of low prices, high energy costs, and slowing demand in legal dispensaries? LeafLink’s Feldman noted, “We’ve seen wholesale bulk flower pricing declines through October in key states including Michigan, Oregon, Colorado, and Arizona, but are seeing the trend improve as early December average prices in three of the four states are increasing, with the exception of Colorado.” So there could be light at the end of the tunnel. 

However, some cannabis industry vultures say they are already circling to look for those smaller players who are in distress and don’t have the reserves to ride this out. The larger companies can cut costs in the challenging states while relying on sales in states where wholesale prices have stayed steady. These dynamics are just part of the overall portfolio in a larger company. The California-only companies will see the crushing need for diversification. 

Kazan concluded, “To us, that’s not all bad news — the best strategy for weathering commoditization is producing the highest quality product at the lowest cost, and that’s basically a description of Glass House Brands’ strategy. In other words, we’re ready. Price compression is expected in every evolving industry and it makes strong companies stronger, though it unfortunately also removes others from the playing field. We’ve been preparing for this for a long time, and we think these market conditions will see the best-in-class companies thrive.


Debra BorchardtSeptember 8, 2021
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9min24630

Cannabis consumers flocked to dispensaries on the Friday of this past Labor Day weekend resulting in the third-largest day for cannabis sales in 2021. Unfortunately, that was the only good news for cannabis retail. Overall, sales dropped in 2021 versus 2020 for the last weekend of summer. Analytics firms Headset and Flowhub both reported that sales dropped for the regions they cover. While  LeafLink the B2B wholesale e-commerce marketplace company saw an early jump in orders for the holiday, orders seemed to taper off as the weekend got closer.

Headset

According to cannabis data and analytics company Headset, Labor Day weekend (Friday 9/3 through Monday 9/6) actually saw a slight decrease (-3.2%) in average daily sales in comparison to the previous four weekends. On a positive note, though on Friday 9/3/21 alone, we see a different story. Sales on September 3rd, 2021 were up 10.3% over the previous four Fridays and drove this day to be the third-largest day of total US cannabis sales so far this year. All data for the US is from the following markets: CA, CO, MI, NV, OR, PA, WA.

Beverages For The Win

Headset said that for the full holiday weekend, the only categories to see sales growth over the previous four weekends were Beverages (+8.4%) and Edibles (+4.2%). “When we look at only Friday, September 3rd instead, all categories saw positive growth with Edibles (+15.1%), Capsules (+13.3%), and Vapor Pens (+11.2%). The category with the lowest sales lift was Concentrate with +2.8% growth over the previous four Fridays.”

Coupon Clippers

Dispensaries must’ve had an inkling that sales might be down because there was a slight increase in discounting over the entire holiday weekend. Headset said that the average discount over Labor Day Weekend 2021 was 13.7%, up from 12.3% over the previous four weekends – a relative increase of 11.8%. While Friday, September 3rd was the highest sales day of the weekend, Labor Day itself (Monday 9/6) had the highest average discounts of 15.1%, up 27% over the previous four Mondays. 

LeafLink 

On the wholesale side of the business, it seems dispensaries were planning ahead for a busy holiday. LeafLink said that sales increased 4.33% during the month leading up to the 2021 Labor Day holiday versus a 2.39% increase across the same period in 2020. Leaflink also said that the most significant GMV (gross merchandise value) percentage increase came during the week of 8/15, increasing 4.5% over the previous. Sales then leveled off for the rest of the weeks leading up to Labor Day.

Leaflink outlined the category demand as follows for the holiday:

  • Flower remained the most popular category in the month leading up to Labor Day, driving 36.33% of GMV compared to 35% of GMV in the month prior to Labor Day 2020 and 35.37% in the previous month. 
  • The second most popular product category leading up to Labor Day 2021 was Cartridges, which made up 22.29% of GMV (about a 1% increase over the previous month). This is a slight drop over 2020 when Cartridges made up 24% of GMV in the month before Labor Day. 
  • Flower saw significant growth during the week of 8/15, increasing 23% in GMV compared to the week before then grew another 9.9% in the following week. This could signify an increase in dispensaries stocking up on Flower in advance of Labor Day 2021. 
  • Packaged Flower was the most popular subcategory, making up 17.47% of total GMV in the month before Labor Day, with Bulk Flower coming in second at 16.29%

The most popular products in the month leading up to Labor Day in 2021 were: Slurricane Packaged Flower – MUV (FL) 

Gelato Cake Packaged Flower – District Cannabis (MD) 

Wedding Cake Packaged Flower – Pacific Stone (CA) 

Blueberry Indica Gummies – MUV (FL) 

Moon Rocks Concentrates – UBaked (MI) 

The most popular Cartridges in the month leading up to Labor Day 2021 were: Biscotti – Platinum Vape (MI) 

Sour Jack – MUV (FL) 

Double Bear Honey Cart – Terrapin (PA) 

Pink Lemonade – MUV (FL) 

Pie Driver – Platinum Vape (MI) 

Flowhub 

Flowhub provides point-of-sale, inventory, and other dispensary analytics. That company found that on average, Labor Day normally outperforms the typical Monday by 17-27%. Unfortunately, Flowhub’s data agreed with Headset as this year’s Labor Day 2021 was right on par with (actually slightly less than) a typical Monday. Flowhub said that there didn’t appear to be any holiday bumps in sales or transactions for Labor Day Monday and sales dropped by 9% versus the 2020 holiday.

Maybe the pandemic lockdowns of 2020 caused consumers to buy more last year? Labor Day’s Monday 2020 sales increased around 10% versus 2019. Just one year later as more people were able to get out and return to a less restrictive lifestyle, Labor Day weekend sales dropped 35% compared to 2020. On average, Labor Day weekend outperforms the typical (median) weekend by 15-21%. Flowhub said that Labor Day weekend 2021 sales were 27% less than sales on a typical summer weekend.


Julie AitchesonSeptember 3, 2021
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It’s that time of the month again when cannabis industry wholesale marketplace LeafLink releases LeafLink Insights Flash—a roundup of data-driven insights regarding category sales, state-by-state performance, and pricing analysis designed to help businesses identify new opportunities and accelerate growth. Every month brings its own set of highlights that point to important trends, market shifts, and recommendations for what it all means for businesses. This time it could be that the category winner flower is losing its market share power.

The August 2021 Insights Flash yielded some key takeaways, including the fact that the wholesale cannabis industry grew by 43% in July 2021 YoY (Year over Year), with top-performing brands like Item 9 Labs, Jeeter, Spectra, Platinum Vape, CannaPunch, and LTRMN leading the charge. Average sales per seller grew 1% year over year, with the average spend per buyer increasing 6%. But all was not rosy for cannabis’s most popular consumable. Flower took a hit this summer, seeing the largest drop in platform market share from June 2021 to July 2021. Despite a 6% dip in sales and a .74% drop in market share, flower held its dominant position for the month of July with 36% of GMV. Pre-rolls saw the largest increase during July, gaining .84 percentage points month over month and making it the first time the category led in share growth since 2020.

Within the US, Nevada gained the top spot as the fastest-growing state in Gross Merchandise Value (i.e., the volume of goods sold via customer-to-customer or e-commerce platforms), with a 25% increase in GMV compared to the same period a year ago. LeafLink gathers market-specific information and conducts comparative analyses for key states each month, with Alaska, Oregon, California, Arizona, Colorado, and Michigan joining Nevada for inclusion in the data collection. This analysis showed, among other things, that although Nevada retailers in the 2nd quintile spent 27% more than those in the same quintile in Alaska, the difference in the order of frequency ends up making this group of retailers worth 171% more on a monthly basis in Alaska.

LeafLink’s Insight Flash also charts consumer trends to create a visual representation of the competitiveness of seven categories of cannabis products (flower, cartridges, pre-rolls, topicals, accessories, concentrates, and edibles/ingestibles). This information, which this month demonstrated that (for the first time) a single state (Nevada) had both the most and least competitive categories. Ingestibles in Nevada made up 14% of sales while being sold by 54% of brands in the state. Flower made up 36% of sales while being sold by 26% of brands. This type of data helps industry professionals to position themselves to capitalize on where the market is headed based on current trends, as well as painting an overall picture of the cannabis industry’s current overall trajectory.


StaffAugust 17, 2021
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As the cannabis industry continues to demand respect from the rest of the corporate world, Inc. Magazine has stepped forward to acknowledge growing companies. Inc. just published its list of 5,000 of the fastest-growing private companies in the U.S.

Mattio Communications

MATTIO Communications, one of the longest-running and largest cannabis marketing services firms, ranked No. 190 on its annual Inc. 5000 list, the most prestigious ranking of the nation’s fastest-growing private companies. The company has grown 2,244% helping it to rank so highly. Mattio Communications said it will be featured in the September issue of Inc. when it hits newsstands on August 20th.

“Since MATTIO started, we have grown our client base to over 50 companies in every vertical across the cannabis industry across the U.S. and Canada,” said Rosie Mattio, Founder and CEO of MATTIO Communications. “Our team is especially proud to be recognized as one of the only PR firms ever featured on the Inc. 5000 list, and our tremendous growth over the past three years reflects the abundance of opportunities available in the nascent cannabis industry.”

Mattio Communications is an industry-leading strategic marketing firm focused on cannabis, lifestyle and emerging markets. The company’s roster of clients is a who’s who in the cannabis industry. MATTIO provides end-to-end marketing services, including media and investor relations, crisis communication, content creation, social media, SEO and experiential marketing. We have firms in New YorkLos Angeles and Toronto.

“The 2021 Inc. 5000 list feels like one of the most important rosters of companies ever compiled,” says Scott Omelianuk, editor-in-chief of Inc. “Building one of the fastest-growing companies in America in any year is a remarkable achievement. Building one in the crisis we’ve lived through is just plain amazing. This kind of accomplishment comes with hard work, smart pivots, great leadership, and the help of a whole lot of people.”

LeafLink

In addition to Mattio making the list, cannabis online marketplace LeafLink also clocked in at number 204 after growing 2,144%. LeafLink. LeafLink is currently logging $3 Billion of annualized Gross Merchandise Value (GMV).  LeafLink’s marketplace makes up an estimated 32% of U.S. wholesale cannabis commerce. Currently, LeafLink serves 27 markets across the U.S. and Canada with offices in New York City, Los Angeles, and Toronto. In December, LeafLink closed on a $40 million Series C investment round, led by Founders Fund. Additional participants include Thrive Capital, Nosara Capital, and Lerer Hippeau. This company said that this latest round of investment brings its venture funding to over $90 million and marks Founders Fund’s largest technology investment in the cannabis space.


StaffDecember 10, 2020
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 Cannabis wholesale marketplace operator LeafLink has closed on a $40 million Series C investment round, led by Founders Fund. Additional participants include Thrive Capital, Nosara Capital, and Lerer Hippeau. This company said that this latest round of investment brings its venture funding to over $90 million and marks Founders Fund’s largest technology investment in the cannabis space.

The proceeds will be used to expand in current markets by bringing on new brands and retailers, as well as capitalizing on new markets that legalized cannabis following the 2020 election. LeafLink said it will also continue to expand its offerings around payments, delivery, and data & analytics.

“This fundraising round is monumental for a technology company like LeafLink as we continue to define a space that shows no signs of slowing down,” said Ryan G. Smith, Co-founder and CEO of LeafLink. “We’re honored to partner with Founders Fund as we scale our marketplace technology across the growing cannabis industry. Our eyes are set on bringing efficiency and innovation to the supply chain and we’re excited for cannabis to serve as a model for more legacy industries in the future.”  

With the latest round of funding, LeafLink said it will continue to accelerate growth beyond its current $3 Billion of annualized Gross Merchandise Value (GMV).  LeafLink’s marketplace makes up an estimated 32% of U.S. wholesale cannabis commerce. Currently, LeafLink serves 27 markets across the U.S. and Canada with offices in New York City, Los Angeles, and Toronto.

“We invested in LeafLink because the team is merging best practices from e-commerce marketplaces with B2B technology to streamline an entire industry’s supply chain and operations,” said Napoleon Ta, Partner at Founders Fund. “We’re excited to make our largest investment in the cannabis space to date in LeafLink.”

LeafLink’s fundraising is notable since it is a private company. According to Viridian Capital Advisors, most of the cannabis capital that has been raised in 2020 has come from publicly traded companies. Of the 280 deals happening so far in 2020, only 49 have been private company raises, while the other 231 have come from public companies.

 


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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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