It is no secret that many mature U.S. cannabis markets are experiencing stagnant or declining year-over-year sales. For example, the median store in Washington processed more than 8,500 transactions in March 2021 but fewer than 7,500 in February 2022. Nearby, the average basket size at the median Colorado store was $59.73 in July 2021 but fell to $55.21 one year later. Despite these trends, some cannabis brands are finding a way to overcome negative shifts and find success.
The transaction volume and average basket size at the median store in Colorado may have dropped by at least 8 percent from July 2021 through July 2022. However, consumers are still showing up to support a trio of innovative vapor pen and concentrate brands. Lazercat Cannabis, a concentrate and vapor pen brand, has increased sales by more than 160 percent since August 2021. Magnitude, an Infusiasm brand, began calling Colorado home in 2020 and performed reasonably well through 2021 with more than $500,000 in monthly sales before hitting a rough patch in the final quarter last year. This year, Magnitude has bounced back and generated $1.5 million in monthly sales through August. Like Magnitude, Sano Gardens is also new to the Centennial State. Less than 12 months after entering the market, the premium cannabis brand has generated $800,000 in monthly sales and become the 15th-ranked brand in the state’s vapor pens category.
The success of Lazercat Cannabis, Magnitude, and Sano Gardens highlights an intriguing trend among consumers in Colorado and other mature markets. While overall sales are declining in most categories, these brands are all experiencing success in the vapor pen category. Similarly, California and Washington have each experienced positive growth within the vapor pen category over the last two years. Of the four other major product categories, only beverages have experienced positive growth from July 2020 through July 2022. Other brands interested in entering these mature markets should look to diversify their product offerings to include infused beverages or vapor pens to maximize their growth potential.
Moving from Washington to Colorado, there are a pair of brands mirroring Sano Gardens, Lazercat Cannabis, and Magnitude’s ability to beat the odds. The Evergreen State may have experienced a 14-percent drop in total sales from July 2021 through July 2022, but WYLD found a way to work around this negative shift. The multistate operator brought its award-winning formula to Washington in January and was able to log $1.6 million in total sales by August. Led by its incredibly popular THC/CBN 2:1 Indica Elderberry Gummies 10-Pack, the socially-responsible cannabis brand has accounted for 14 percent of edible sales within the state of Washington this year.
WYLD is not the only brand to overcome negative shifts in Washington’s cannabis market. Passion Flower may not be new to the state’s cannabis landscape, but it has emerged as a new leader across several categories. Offering products in the flower, vapor pen, concentrates, pre-roll, and beverage categories, the Fairwinds brand accounted for $550K in retail sales through August. The brand’s success runs contrary to the overall success of the state’s marketplace, which has experienced declines of at least 14 percent in the concentrates, flower, tincture, and sublingual categories from July 2021 through July 2022.
The success of WYLD and Passion Flower expands beyond the framework of a single category. However, the two brands are similar in the way they operate. Passion Flower is guided by its three core values—quality, community, and education. Meanwhile, WYLD has made a substantial effort to address the war on drugs, develop social justice initiatives, reduce its environmental footprint, and improve the health and wellness of its consumers. In an age when customers are more aware of the corporate social responsibility (CSR) initiatives a company supports, cannabis brands must remain committed to addressing the issues their consumers care about.
As shown by WYLD, Passion Flower, Sano Gardens, Magnitude, and Lazercat Cannabis, success within the industry is achievable even when overall sales trends may not be in their favor. Other companies can take key pieces of these brands’ success and begin working toward a better future. Tough times may last, but innovative cannabis companies that plan for the future and think outside of the box will last even longer.
Cy Scott is cofounder and chief executive officer at Headset Inc., which turns retail data into real-time market insights. Previously, he co-founded cannabis information network Leafly, obtained Kelly Blue Book’s first patent, and assisted TEN: The Enthusiast Network in transitioning publications including MotorTrend and Automobile from print to digital.