BDS Analytics' Top 10 Cannabis Market Trends for 2018 (UPDATED 11/16)

Nov 16, 2018 1:17:56 PM / by BDSA

Make sure to check out our year-end recap of the Top 10 Cannabis Product Trends. Click to read.

Legalization changes everything. And in 2018, legalization of cannabis, both for medical and adult-use is playing a huge role in influencing where the industry is headed – with production, with consumption, and everything in-between. It transforms cannabis from something reminiscent of dried oregano in a plastic bag into a smorgasbord of products, complete with elaborate store displays, state-regulated testing and high-tech facilities and laboratories focused on the plant’s manifold intricacies.

Once states pivot to legal marijuana sales, trends quickly root. With more than four years of harvesting and analyzing cannabis consumer sales data — including 800,000,000+ retail transactions — as well as conducting wide-ranging consumer research, BDS Analytics offers the most in-depth analysis of this complex marketplace. Here are our Top 10 budding and burning cannabis market trends we're currently seeing in 2018.


  1. Consumers Drive Evolution

Cannabis enthusiasts cover more ground than consumers in most industries. Among other things, the industry includes customers who buy cannabis for both medical and recreational pursuits. These consumers are driving research and development, as well as product and brand proliferation.


Bloomberg ran a piece in late October affirming our position. From Bloomberg, "The industry has adapted its product offerings to the needs of targeted markets like women, who may prefer beauty and wellness products and discreet vapes. Read up.


  1. Affordability Arrives


In Colorado, California, Arizona and Oregon, prices for flower have declined, in some cases dramatically.  Concentrate prices are falling, too, in Colorado, Oregon and Arizona, although the inevitable decline has not arrived yet in California. As competition rises, prices tend to dip.

BDS Analytics' Managing Director of Industry Intelligence, Tom Adams, discusses in a 10/18 Leafly article how factors like branding, taxes, and regulations impact pricing trends. Read up.


  1. Brand Surge


Consider: In Colorado in 2014, flower captured 63 percent of all cannabis sales — and back then, all of that flower was unbranded. The branded products — concentrates, edibles and topicals — lagged far behind. But fast-forward to 2018, and flower commands just 43 percent of the market, and within flower sales some products, like Willie’s Reserve, are branded. Meanwhile, branded products like concentrates, edibles and topicals have surged. Today in Colorado, the most mature adult-use cannabis marketplace in the United States, brands are rising fast. Meanwhile, in Colorado, Oregon and Arizona the top five edibles brands in each state own more than 40 percent of the market, and the story is the same with concentrates. And individual brands have the potential to achieve explosive growth — sales for one brand in Oregon rose 19,179 percent between 2016 and 2017. Wow.

BDS Analytics' VP of Operations, Greg Shoenfeld, joins the discussion around the prowess and evolution of brands in this article featured in Seattle's The Stranger publication. The Brands Are Here to Stay!


  1. Consumers Demand Variety


Does one product dominate a market, the way Coke — not the brand Coca-Cola, but the flagship product — rules soda in the United States? Coke sales represented nearly 18 percent of the soda market in 2018. By comparison, the market share for the top-selling edibles products in Colorado, Arizona and California does not rise above 4 percent, and in Oregon it doesn’t get beyond 6.5 percent. Brands must remain highly attuned to their customers and offer a wide range of products to achieve and maintain marketplace triumph. Depending on one winning product is not enough to carry a brand.


  1. Novel Newbies

Legalization always creates consumers who are new to cannabis, and their profiles and habits stand apart. The newbie skews towards women between the ages of 25 and 44, and half say they are in the market to explore medical applications. Among edibles consumers, newbies are more likely than cannabis veterans to seek low-dose products.


Our Consumer Insights team discusses how today's cannabis Consumers are tearing down years of bong-hitting stereotypes along the way. Read up.


  1. Beyond the Bong

Consumers inhale, swallow and slather cannabis products, but as markets mature new delivery methods emerge. Sublinguals get applied beneath the tongue, and quickly lead to a buzz. Transdermals usually arrive as patches — consumers place the patch on a body part, and the THC and other cannabinoids slowly enter the bloodstream, for long-term relief. Expect to see increasingly more alternative delivery systems as industry scientists explore the plant in greater detail.


Our GreenEdge™ Retail Sales Data highlights decreasing flower sales (as a % of total sales), while overall sales of cannabis products continue to grow. What we know: consumers are looking for new methods of delivery. USA Today covers the trend in detail. Read up.


  1. Form Follows Function

Terpenes? CBD? Cannabinoids? Potent compounds pack the cannabis plant, and brands increasingly leverage them for specific applications, such as sleep, taste and energy. Product development is exploding to the benefit of the consumer.


  1. All Praise the Nibblers

Some of the top products in different states arrive with 5 milligrams or less of THC per serving. That’s considered low-dose, and the movement towards weed with less wallop is expanding. In Colorado, growth for these products hit 83 percent by the end of 2017. Meanwhile, consumer research reveals that 33 percent of cannabis consumers seek low-dose options.


Our Managing Director Tom Adams discusses in this Huff Post article how the cannabis industry has made an effort to offer lower-dose products to new consumers. Newbies to the plant can ease into the experience, at their own pace and desired effect.


  1. Marketing for Mood 


As the universe of products grows and consumers become more educated, brands pursue consumers interested in specific effects, rather than just celebrating cannabis in general. The average number of reasons consumers provide for consuming cannabis is eight — including everything from “have fun” to “manage anxiety.” This offers brands a wealth of marketing opportunities. For example, the No. 1 brands in select categories in California and Colorado market for specific effects, like sleep and energy. More and more brands offering up "moods" and "experiences" are hitting the shelves and taking up market share. The big brands are embracing  this trend as well. More to come in 2019 and beyond.


  1. Legal Leads to Luxe

The range of broad retail identities — budget, mainstream, premium and luxury — finds sound footing in legal cannabis markets. And the rise of the upscale cannabis consumer is fully flowering. They enjoy high incomes and advanced educations; live in the suburbs; enjoy the outdoors and fine arts; are physically active; personal care is extremely important for them; shop for organic and gourmet foods; pair cannabis with other products; are fluent in the language of strains and products; value dispensary relationships; and are comfortable with all of the avenues for consumption — inhalables, edibles and topicals. These are dream consumers for many kinds of brands.


For more information on top cannabis trends, check out our Top 10 Cannabis Market Trends for 2019 Webinar


Additional Resource (October 2018) : Learn how Consumers in 2018 are enjoying their cannabis. Click here. 


Our 2018 projected trends are influenced and inspired by the collective brain trust of BDS Analytics.

Research produced in 2017/2018 by our Consumer Insights Division.

POS Data powered by our GreenEdge™ Platform.

Comprehensive analyses led by our Industry Intelligence Division.


Tags: Edibles, Market Trends, Knowledge Center, Demographic and Psychographic Cannabis Research

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