Hashish Vape, Pre-Roll Marketplace Soars: Canada Sees Double-Digit Expansion in Q3 2023 – Auxly Hashish Crew (OTC:CBWTF), Decibel Hashish Co (OTC:DBCCF)

Vape merchandise in Canada’s hashish sector demonstrated important year-over-year enlargement in Q3 2023, expanding through 21% and score 3rd at the back of pre-rolls at (+25%) and concentrates at (+43%).

In his newest document, Pablo Zuanic, a senior analyst at Zuanic & Mates delves into the vape, pre-rolls and hashish flower segments in Canada and sheds gentle on key marketplace developments.

Hashish Vapes: Marketplace Proportion, Gross sales, And SKU Depend In Canada

• Regardless of this enlargement, vape’s total marketplace proportion has remained rather solid, accounting for 15% of hashish gross sales, not up to in U.S. states like California and Colorado.
• The document highlights important adjustments within the Canadian vape marketplace from Q1 2021 to Q3 2023.
• Gross sales higher from C$114 million to C$207 million, a cumulative enlargement of 81%, with a quarterly compound annual enlargement fee of 6.1%.
• The selection of vape product SKUs additionally rose from 585 to 759.
• Disposables accounted for 11% of gross sales, with closed-loop methods like STIIIZY having a vital marketplace proportion within the U.S.
• The main avid gamers within the Canadian vape marketplace in Q3 2023 had been Motif Labs, preserving a 21% marketplace proportion, and Decibel Holdings (OTC:DBCCF) with 13%.
• This represents a notable shift from Q1 2021 when Tilray (NASDAQ: TLRY) and Auxly (OTC:CBWTF) had been the marketplace leaders.

Canada’s Flower And Pre-Roll Marketplace

The document additionally supplies insights into the pre-roll and flower segments. Pre-rolls, accounting for 33% of general gross sales in Canada, are considerably extra widespread than within the U.S. states.

Decibel is the main participant within the pre-roll marketplace, with a 16% proportion. The flower section in Canada displays a gradual enlargement fee, with gross sales expanding through 12.3% year-over-year in Q3 2023. On the other hand, Canada’s consistent with capita hashish intake nonetheless lags at the back of a number of U.S. states.

The main corporations within the flower section come with Tilray, VFF (VFF: NASDAQ), and Organigram (OGI: NASDAQ), with marketplace dynamics moving over the last 12 months.

Within the flower section 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.

On the other hand, when taking a look on the proforma stocks again in 1Q21 and 3Q22, the development is as follows:

• In 1Q21, Tilray had a 27.3% proforma section 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).

“Over the last one year, each Tilray and VFF have received marketplace proportion, whilst Organigram has misplaced marketplace proportion. This shift does no longer appear to be price-related, as OGI’s reasonable flower charge higher from $4.37/gram in 3Q22 to $4.95/gram in 3Q23, and Tilray’s costs additionally higher from $4.27/gram in 3Q22 to $5.35/gram in 3Q23, in step with Hifyre knowledge,” Zuanic wrote.

Rising Champion In The Infused Pre-Rolls Phase

Infused pre-rolls are using marketplace enlargement in Canada, suggesting doable 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 keeping with Hifyre, Decibel’s marketplace proportion within the pre-roll section was once 2% in 1Q21 and higher to 7% in 3Q22, attaining 16% within the present duration. By contrast, Tilray held a 39% proportion in 1Q21, which diminished 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 consistent with gram in 3Q23, towards the class reasonable of $5.65,” Zuanic endured. “For context, Tilray’s pre-roll charge is rather upper, at $4.74 consistent 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 common charge 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 methods in some U.S. states.

In the meantime, the price of hashish pre-rolls is US$4.18 consistent 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 charge consistent with gram diminished from C$18.09 to C$8.97, even if pack sizes have higher. 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 through Immo Wegmann on Unsplash.