In nearly every state, the trend is the same: As cannabis products are introduced to a newbie consumer market, flower sales start off strong before extracts and edibles slowly but surely start grabbing a bigger piece of the pie.
That said, flower still reigns supreme in every state. Its market share may have decreased over time, but the amount of money consumers spend on flower has increased every year. Total flower sales in 2022 were just over $14 billion, according to Statista.
That’s the good news. The bad news is a glut of flower on the West Coast (and in other mature markets like Colorado and Michigan) over the past few years has caused wholesale prices to plummet. In California, quality greenhouse and full-term sungrown pounds are selling for as little as $500. A few years ago, those same pounds fetched $1,000 to $1,500.
In many markets, companies are able to sell $50 ounces and still make a reasonable margin, although they must sell more volume to make the figures pencil out. Offering cheap flower is also a good way to lure consumers into buying other products from the same brand. When it comes to specific strains, Headset lists the top three sellers in the seven adult-use markets it tracks as Runtz, Wedding Cake, and Gelato, in that order. Brightfield more or less agrees, reporting Gelato, OG Kush, and Wedding Cake as the biggest winners on a consistent basis.
But with increased competition, price compression, and a thriving illicit market, farmers and flower brands must step up their game or get off the field.
Grant Palmer is chief executive officer at CannaCruz, a dispensary with locations in Santa Cruz and Salinas, California. He is also the CEO of Crop Circles, which produces craft flower and concentrates. Having spent many years dealing with California flower and extract companies, Palmer has no shortage of opinions about how to build brands and create products customers crave.
“It’s critical to move inventory in a timely manner,” he said. “Sitting on product just makes it older and harder to move. If you get the reputation for selling old weed, it’s not going to go well for you. Indoor growing is also more profitable if you’re selling by the eighth bag or jar rather than selling bulk. [Sales are] also much more consistent. Set a goal of moving all your product in eighth bags versus selling it bulk.”
Palmer offered a few more tips flower brands in mature markets should bear in mind.
- Focus on customer needs. If sales of a product require “educating the customer,” then—unless it’s something unquestionably unique—that product likely will fail. Most consumers in mature markets have benefited from education for years. Instead, try to figure out what customers want and can’t find. If you understand the wants of your customers and deliver the product they want at a price they like, you will be very successful.
- Don’t compare. Comparison is the thief of joy. Brands are always at their best when they stay focused on self-improvement. Brands are at their worst when they are worried about other companies doing better than they’re doing. “What other brands do is irrelevant,” Palmer said. “Focus on your business, and you’ll be fine.”
- Diversify. If you’re growing too much of a strain to sell it all by the eighth, then try switching things up: Grow more strains and offer smaller batch sizes. When selling branded products to a dispensary, make sure you have a variety of strains whenever possible. “The more the better, really,” Palmer said. “Brands that offer six or more options generally perform better than brands with only one or two options.”
- Don’t forget branding. Go into dispensaries and check out the branding for products similar to yours, then look at the branding for products a tier lower than yours. “Make sure your branding looks like the good stuff and not the stuff on the cheap shelf, but also make sure you use colors and themes that will stand out a little,” Palmer said. “You have to catch the customer’s eye to make sales.”
According to East Fork Cultivars CEO Mason Walker, the market in his state is somewhat different and therefore requires different tactics. “Because of the recent price compression, hundreds of experienced growers, and a sophisticated consumer base, Oregon has one of the most competitive markets in the country,” he said.
Although extracts, oils, and edibles have cut into the market over the past few years, flower still accounts for more than 50 percent of Oregon’s annual sales, which typically exceed $1 billion. One advantage in the state’s retail market? Most stores still allow large jars of bulk flower customers can smell before they buy.
In order to stay competitive in markets like his, Walker noted it’s important to:
- Grow great genetics. Select intriguing, in-demand varieties to cultivate. Work with a trusted nursery or seed company, or build an in-house breeding program. All of these strategies can help growers stay current with genetic offerings.
- Invest in freshness and quality retention. Investing in excellent drying, curing, and storage procedures is essential. Quality standards are quite high in a competitive market like Oregon, even for “bottom-shelf” flower.
- Monitor the market. While some growers and brands are able to dictate price points, most flower is indexed to commodity metrics. Having a strong grasp of these figures and a clear pricing strategy is vital for survival. Data services like Cannabis Benchmarks, Headset, and BDSA can help growers stay on top of market and category data so they can make informed decisions.
- Tell a story. The best-performing flower brands in Oregon have concise, compelling brand stories that include information like founder motivation, cultivation techniques, unique company-culture details, breeding intrigue, and other things passionate budtenders and consumers care about.
As founder and former CEO of Bluma Wellness and One Plant Florida, Brady Cobb has watched the Florida market almost since its inception. After Cresco Labs acquired Bluma and One Plant in 2021, Cobb’s Green Sentry Holdings acquired fourteen dispensaries and a grow from MedMen in 2022, all of which will be rebranded as Sunburn Cannabis stores this year.
He believes quality flower on the East Coast currently doesn’t compare to that on the West Coast, and this gives craft growers an opportunity to rise above the competition in newer markets. He said it’s important to have an identity as a flower company and develop strain lines that will stand out from the pack. “What we saw in Florida is all the California companies were coming in and bringing the Cookies [strains], they brought the Gelatos, all that stuff,” Cobb said. “So we are leaning into the old-school 1990s stuff with strains like Chemdog, Chem 91, Petrol Station—real gassy, burnt-rubber, punch-you-in-the-face-type weed, as opposed to those [newer] ones. And the market is eating it up.”
Another novel strategy Sunburn has found effective: running one-gram “tester” bags that allow customers to try new strains on the cheap.
“People are leery to give you an eighth order if something’s new [to them], so we created the option to have flights of grams when we have new strains drop. We’ll drop them all in grammers first,” he said. “We have three or four staples, and then with the rest of it, we let the market tell us what they want to see more of. And that’s across all the strains on a regular basis, week over week. So always keep it new, keep it fresh, and keep up with what the consumer wants.”
While there is no perfect recipe for success and strategies vary widely depending on the characteristics of the market, one thing is clear: Knowing your customers, meeting their needs, and finding innovative ways to fill unexplored niches will help you gain market share. Build a consumer-focused reputation, and the world will beat a path to your door.