As the cannabis industry continues to become increasingly competitive, retailers are actively seeking effective ways to drive traffic, sales, and customer engagement. With the maturation of existing cannabis markets, retailers are expanding their offerings, resulting in customers becoming more particular with their purchasing decisions and power. This poses two important questions for cannabis retailers – what will excite customers, and what will increase sales?
A revealing pre-roll study conducted in 2023, by the experts at Custom Cones USA and Headset, found that pre-rolls have consistently proven to be the best way for stores to increase sales and pique customer interest. The study presents a compelling prediction that pre-rolls are on track to surpass flower and emerge as the dominant product segment in cannabis retail by 2023. But how is this transformation unfolding?
The maturation of individual cannabis markets typically triggers a decline in retail prices over time. However, the pre-roll category defies this norm as it has been proven to be the fastest-growing product segment, with the least amount of price compression. This phenomenon is due to the creation and rising popularity of customizable, designer, and infused pre-rolls that have been shown to increase in price over time. This demonstrates that as long as brands continue to innovate and expand their pre-roll offerings, customers will increasingly value more premium offerings, allowing standard pre-roll offerings to maintain their stability in pricing.
Despite rapid changes in the industry, pre-rolls continue to be accessible, customizable, and exciting to customers. By offering an array of pre-roll options, customers can easily venture into new products or strains without breaking the bank. For retailers, the reliability of consistent pre-roll sales positions this category as a financially stable category for innovation.
For cannabis retailers grappling with concerns about dwindling profit margins, venturing into the pre-roll market is one of the best categories to boost profitability. This couldn’t be more true than in the Canadian market, where prices are dropping in categories across the board, with the notable exception of pre-rolls. Infused pre-rolls in Canada have become so popular that they drive up the average cost of the category. Breakthroughs in manufacturing innovations have enabled Canadian companies to sell classically rolled and infused pre-rolls at an accessible price point for customers and continue to expand options for more potent and top shelf pre-roll products.
As the US cannabis industry forges ahead and additional states embrace the legalization of adult-use cannabis, the quintessential cannabis consumer is increasingly drawn to fast-acting, high potency products. This paradigm shift is reflected in sales data showing demand for recreational cannabis products dictating market dynamics, surpassing the influence of medical products. Over the past year, customer interest and demand for pre-rolls, flower, and vapes, has consistently risen, while interest in tinctures, capsules, and topicals has shrunk. Amid the array of pre-roll options, many adult-use customers turn to pre-rolls as a way to find their perfect blend of convenience and enjoyment. Luckily, pre-rolls are the best way for many customers to decide what is the right high for them. The spectrum of available pre-roll products includes single-strain pre-rolls, mixed-strain pre-rolls, and the increasingly favored infused pre-rolls, which all are gaining traction with the expansion of adult-use markets.
- The classic pre-roll is a single strain pre-roll, perfect for customers looking for the most convenient way to consume one specific flower strain. It is the most accessible and affordable way to try a new strain.
Mixed Strain Pre-Rolls
- Mixed strain pre-rolls combine multiple strains of cannabis into a single joint, offering consumers a blend of different flavors, aromas, and effects to create a unique smoking experience. Mixed strain pre-rolls offer a variety and diverse strains, catering to the evolving preferences of cannabis enthusiasts who seek customized experiences.
- Infused pre-rolls are the fastest growing product on the market and a favorite of connoisseurs. Crafted by fusing flowers with potent concentrates such as wax, oil, and diamonds, infused pre-rolls stand as the pinnacle of potency in the pre-roll segment. This trend mirrors the growing allure of high potency products in recreational markets. Beyond their popularity surge, advancements in production techniques render these pre-rolls more accessible and budget-friendly for suppliers, thereby amplifying their overall appeal.
Although flower continues to reign supreme as the top product category, it’s not surprising that pre-rolls, its close and ready-to-smoke cousin is the fastest-growing product segment. Pre-rolls have become a driving force as they retain their wallet share throughout different demographics, they have the least amount of price compression and are the most customizable product segment.