Vape merchandise in Canada’s hashish sector demonstrated important year-over-year enlargement in Q3 2023, expanding via 21% and score 3rd at the back of pre-rolls at (+25%) and concentrates at (+43%).
In his newest file, Pablo Zuanic, a senior analyst at Zuanic & Friends delves into the vape, pre-rolls and hashish flower segments in Canada and sheds mild on key marketplace developments.
Hashish Vapes: Marketplace Proportion, Gross sales, And SKU Depend In Canada
- In spite of this enlargement, vape’s general marketplace proportion has remained reasonably solid, accounting for 15% of hashish gross sales, not up to in U.S. states like California and Colorado.
- The file highlights important adjustments within the Canadian vape marketplace from Q1 2021 to Q3 2023.
- Gross sales larger from C$114 million to C$207 million, a cumulative enlargement of 81%, with a quarterly compound annual enlargement charge of 6.1%.
- The collection of vape product SKUs additionally rose from 585 to 759.
- Disposables accounted for 11% of gross sales, with closed-loop programs like STIIIZY having an important marketplace proportion within the U.S.
- The main avid gamers within the Canadian vape marketplace in Q3 2023 had been Motif Labs, maintaining a 21% marketplace proportion, and Decibel Holdings DBCCF with 13%.
- This represents a notable shift from Q1 2021 when Tilray TLRY and Auxly CBWTF had been the marketplace leaders.
Canada’s Flower And Pre-Roll Marketplace
The file additionally supplies insights into the pre-roll and flower segments. Pre-rolls, accounting for 33% of general gross sales in Canada, are considerably extra standard than within the U.S. states.
Decibel is the main participant within the pre-roll marketplace, with a 16% proportion. The flower phase in Canada presentations a gentle enlargement charge, with gross sales expanding via 12.3% year-over-year in Q3 2023. Alternatively, Canada’s in keeping with capita hashish intake nonetheless lags at the back of a number of U.S. states.
The main firms within the flower phase come with Tilray, VFF NASDAQ, and Organigram NASDAQ, with marketplace dynamics moving during the last yr.
Within the flower phase for 3Q23, the leaders had been:
- Tilray with a 14.9% marketplace proportion
- VFF with a 12.4% marketplace proportion
- Organigram with an 8.8% marketplace proportion.
Alternatively, when taking a look on the proforma stocks again in 1Q21 and 3Q22, the trend is as follows:
- In 1Q21, Tilray had a 27.3% proforma phase proportion (11.9% in 3Q22).
- In 1Q21, Organigram had a 4.8% proforma flower proportion (11.5% in 3Q22).
- In 1Q21, VFF had a 7.9% proforma flower proportion (11.3% in 3Q22).
“During the last 365 days, each Tilray and VFF have won marketplace proportion, whilst Organigram has misplaced marketplace proportion. This shift does no longer appear to be price-related, as OGI’s reasonable flower payment larger from $4.37/gram in 3Q22 to $4.95/gram in 3Q23, and Tilray’s costs additionally larger from $4.27/gram in 3Q22 to $5.35/gram in 3Q23, consistent with Hifyre information,” Zuanic wrote.
Rising Champion In The Infused Pre-Rolls Phase
Infused pre-rolls are using marketplace enlargement in Canada, suggesting possible for additional enlargement.
Decibel has emerged because the marketplace chief in pre-rolls, principally in infused merchandise, overtaking Tilray, which has observed a decline from a 39% proportion in 1Q21 to twelve% now.
On Decibel’s emergence, Zuanic wrote: “In step with Hifyre, Decibel’s marketplace proportion within the pre-roll phase used to be 2% in 1Q21 and larger to 7% in 3Q22, attaining 16% within the present length. By contrast, Tilray held a 39% proportion in 1Q21, which reduced to 19% in 3Q22, and additional down to twelve% now.”
“Particularly, whilst Decibel’s vape merchandise are priced above the class reasonable, their pre-roll costs are relatively decrease, at $4.02 in keeping with gram in 3Q23, in opposition to the class reasonable of $5.65,” Zuanic endured. “For context, Tilray’s pre-roll payment is reasonably upper, at $4.74 in keeping with gram.”
This shift may point out converting shopper personal tastes and aggressive dynamics within the Canadian marketplace.
Hashish Pricing In Canada
In Canada, the typical payment of vape merchandise is considerably decrease in comparison to U.S. states. This distinction is partly attributed to the larger penetration of disposables and closed-loop programs in some U.S. states.
In the meantime, the price of hashish pre-rolls is US$4.18 in keeping with gram (down from C$6.76 in 3Q22 and C$11.45 in 1Q21), while, in U.S. states like California, Colorado, and Michigan, costs are considerably upper (US$8.54, US$7.36, and US$6.04 respectively).
The common payment in keeping with gram reduced from C$18.09 to C$8.97, even though pack sizes have larger. 510 cartridges dominate the vape marketplace, comprising over 87% of gross sales.
Caveat
Zuanic famous that Canadian LPs, regardless of diversification, have smaller home leisure gross sales when in comparison to US MSOs because of the 3-tier gadget and pricing deflation.
As an example, Tilray’s annualized home leisure gross sales of US$133 million lag at the back of the ones of 15 US MSOs in 2022, regardless of being 50% upper than its closest LP friends.
Picture via Immo Wegmann on Unsplash.
