In two weeks recreational marijuana will be legal in California. While most recreational shops will not fling open the doors on January 1, some will. And as municipalities across the state hammer out the regulatory details for their towns and cities regarding recreational rules, more and more shops will open. If things go smoothly, it could be an epic year for California cannabis.
Examining data from cannabis market research firm BDS Analytics between March and October of this year in the Golden State reveals trends that will likely continue, at least in the short-term, once recreational marijuana sales begin. While California today is a medical state — people must have state-issued medical cards to buy marijuana — in many ways it resembles recreational states like Colorado more than medical regimes in states like Arizona or Hawaii. Among other things, sales in California already are the most robust in the nation. October alone saw $245 million in sales; by comparison, in the established combined recreational-medical marketplace in Colorado, consumers spent $121.6 million. The marketplace is already effervescent in California, and rec legalization will just heighten the fizz.
A few trends underway in California this year are worth exploring.
Probably the most interesting is the growth of vapes in the state. When we study all sales between March and October of this year, vape sales capture 16 percent of the overall market. But in October alone, vapes grabbed 19 percent of the cannabis market. The popularity of vapes just keeps on climbing in California, and vapes are also expanding the market share for the broader concentrates category, which is second only to flower for sales in California.
The rise of vapes’ market share is coming at a cost to other categories. Between March and October, flower nabbed 53 percent of all cannabis sales in California. But in October, flower’s share was down to 50 percent.
In addition, we have seen edibles rise incrementally, from a market share of 12 percent over the course of eight months but parked at 13 percent for October. And pre-rolls, too, continue to climb, from 5 percent over the course of the eight months to 6 percent in October.
These incremental changes are more stark when March sales get compared to October sales. In March in California, vapes accounted for 14 percent of sales (compared to 19 percent in October), flower represented 55 percent of sales (compared to 50 percent in October), and pre-rolls were 4 percent (compared to 6 percent).
Once recreational shops begin opening their doors during 2018, it is reasonable to anticipate the continual decline of flower’s market share, and the rise of other categories. The same trend happened in Colorado, Washington and Oregon. This doesn’t mean sales of flower decline — no, recreational legalization usually leads to boosted flower sales month after month for years. It just means flower’s piece of the ever-expanding cannabis pie slowly shrinks.
Welcome to the world of recreational marijuana, California. May you grow, and prosper.