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Future Trippin'
Future Trippin'
SEA OF GREENBy Duncan Cameron, SOW Consulting LLCJuly 7, 2023
Does selling raw flower make sense?Do people really want to roll their own, or is this a symptom of where we were? When you stop to really think about it this is a strange thing. In most mature cannabis markets you can get a 1g joint for $10 or an 1/8th (3.5 grams) for $30. So for almost the same price consumers get to do the work themselves? Selling loose flower made sense when cannabis was illegal in most places in the US. It's much easier to transport and hide stuff when it's not in containers. With full scale prohibition now limited to fewer than 15 states, the clandestine nature of the trade and inherent profitability have gone away. Companies in legal states are now free to manufacture, brand and sell products openly. So why still sell loose buds?I believe the future of smokable marijuana will look a lot like the present day tobacco space. Sure there are a few people selling loose tobacco (i.e. American Spirit) but most sell you cigarettes… or vapes nowadays. The latest industry stats paint a pretty telling picture. Pre-rolls have gained a lot of traction over the last few years. Even more impressive is the trajectory of edibles, specifically gummies. On the flip side sales of raw flower have been on a consistent slide for over a decade. People want in cannabis what they want in every other product- convenience. Hell, maybe that's more to the point. They want a product. And from a producer's perspective it's very hard to brand raw material. People continue to try but the only real success story here is Cookies; and that was more about hoodies and licensing deals than buds. I still don't know who grows my corn or what type of corn it is, but I do know Kellogg's Corn Flakes. Portable, shareable and discreet. That's the new name of the game.And what about dispensaries?Another anomaly in the industry. The story of dispensaries is another chapter in the history of maturing markets. There was a time liquor was exclusively sold at speakeasies. Then it moved to package stores. Now you can go to Target and throw a bottle of Don Julio in the same cart with your new flat screen tv. Wouldn't it be nice to drop a couple gummies in there too? It's easy to see a day when that will be the case. Dispensaries insulate companies in mature markets from price fluctuations on the wholesale side if they are vertically integrated. But they are also the place where the dreaded 280E tax burden is assessed. A Catch 22 no doubt. Look no further than Colorado and California to see where this is all heading.Gummies, pre rolls and vapes will continue to usurp the old guard. As the industry matures those trying to plead the case for selling flower at a dispensary will end up on the dole next to the guy who was selling horse shoes in front of the Model T factory.
OTHER NEWS
I used to spend a lot of time training gardeners to walk around the garden and listen. We gather most information through our eyes but your ears, and nose for that matter, can tell you a lot about what is going on in the field. A compressor or contactor about to fail, a fan blade rubbing against its housing or water dripping from a pipe is information that can all be gleaned with your eyes closed.
Go science!
"Don't look where you fall, but where you slipped"