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Trends in the Concentrate Market – Cannabis News, Lifestyle

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Cannabis concentrates are likely the best bang for your buck, and trends in the concentrate market indicate this. Concentrates rank fifth in the most extensive product category. Although not nearly as popular as cannabis flower, among young consumers, concentrates are three times more prevalent than among older adults. As well, males tend to buy concentrates more than females.

Concentrate market share in Canada has increased from 2.9% to 3.8% of total cannabis sales. Since June 2021, the opposite has occurred in the United States. Over the same period, concentrate market share decreased from 9.5% to 8.3%.

Hash is the most popular concentrate in Canada, capturing 30% of the market, compared to 2% in the US. Live Resin is more predominant in the US, with 34% of concentrate sales, compared to 22% in Canada.

In Canada, the price of concentrates has dropped significantly, from an average of $48.88 in January 2020 to $25.97 in May 2022. That’s a decrease of 49%. Compared to the US, the price decreased 18%, from $21.86 in August 2020 to $17.85 in May 2022.

Overall Market Share

Trends in the Concentrate Market

Concentrate market share has increased in Canada (up from 2.9%) and the US (down from 9.5%).

Canadians have made concentrates a top-selling category behind vape pens and edibles. In the US and Canada, concentrates are the fifth highest-selling product behind flower, pre-rolls, vape pens and edibles.

The concentrate market typically hovers around 10% of total cannabis sales in the US. However, its peak was in late 2020. Since then, concentrate market share in the US has dropped, stabilizing at around eight and nine percent.

Trends in the Concentrate Market

In Canada, the concentrate market has risen steadily since the government legalized additional cannabis products in 2019. Concentrate market share has plateaued at around 4% of sales, but it’s still too early to discern long-term trends. Whether the slight decline in the concentrate market for both countries is a result of short-term trends or longer-term structural problems remains to be seen.

Trends in the Concentrate Market

Given this data, it’s clear the US concentrate market share is higher than it is for Canadian markets. The US states where concentrates enjoy a significant market share are also the states that legalized cannabis early. They are Oregon, Colorado, and Washington.

Alberta has the highest market share in Canada, with 4.5%, with Ontario at the low end, 3.6%.

Demographics of the Concentrate Market

Trends in the Concentrate Market

Concentrates are more popular among younger consumers than older ones. The Generation Z age group purchase concentrates triple the rate of consumers in the Baby Boomer generation.

Males also contribute more to the concentrate market share than females.

Pricing in the Concentrate Market

Trends in the Concentrate Market

There was a lot of volatility in the concentrate market during Canada’s first year of legal concentrate sales. The average price started at $50 before dropping to below $30. And then, it climbed back up to the $40 range by the end of summer 2020. Since then, the price of concentrates in Canada has been steadily dropping to its current average price of $25.97. Between January 2020 and May 2022, a price decrease of 49%.

In the US, concentrate prices have remained relatively stable. However, even here, concentrate prices have been declining since the summer of 2020. The average price in August 2020 was $21.86, compared to May 2022’s $17.85, a decrease of 18%.

Concentrate Package Sizes

The 1-gram package size is the most popular in both US and Canadian markets. In the US, 1-gram concentrates account for 95% of all concentrate sales. In Canada, one-third of concentrate sales come from two-gram package products. However, these two-gram products are almost entirely hash.

Hash is not nearly as popular in the US.

Consumer Preferences in Concentrate Market

As mentioned, hash is far more prevalent among Canadians than Americans. In Canada, hash dominates concentrate sales. Hash only contributes 2% of all concentrate sales compared to the US.

Shatter is also popular among Canadians, taking 25% of all concentrate sales. In the US, shatter only accounts for 7% of concentrated sales. In the US, live resin and rosin are far more popular than in Canada.

Whether these trends hold remains to be seen. The concentrate market in Canada is still relatively new, and federal regulations keep THC content artificially low. However, one cannot calculate how this impacts consumer decisions to purchase or forego concentrates.





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Amending the Cannabis Act – Cannabis News, Lifestyle

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Amending the Cannabis Act? The Canadian government says they will review and amend it as soon as possible. But the deadline to begin the review is eight months passed. Scheduled for October 2021, Health Canada won’t comment on when the review will occur, only that any amending will come from a “credible, evidence-driven process.”

Health Canada also said the review could take up to 18 months. The latest federal budget promised a cannabis industry roundtable, but no details have been released. However, some remain skeptical that meetings between government bureaucrats and industry insiders will do anything except help out the larger producers at the expense of the smaller craft companies.

Forward Regulatory Plan

Amending the Cannabis Act

But will a review and amendment of the Cannabis Act work out in everyone’s favour? So far, the federal government plans to update the Cannabis Act through some regulatory changes that Health Canada will be taking the lead on.

These regulatory changes include:

  • Cutting back on regulatory paperwork “to simplify and reduce requirements related to record keeping, reporting and notifications, and to provide more flexibility in meeting certain requirements related to matters such as antimicrobial treatment.”
  • Amending the regulations to “facilitate cannabis research for non-therapeutic purposes.”
  • Increasing the possession limit for cannabis beverages (no indication of raising the THC limit or abandoning it altogether).
  • Allowing the sale of certain health products containing cannabis without a prescription
  • Amending Cannabis Act regulations to “restrict the production, sale, promotion, packaging, or labelling of inhaled cannabis extracts with certain flavors, other than the flavor of cannabis.”

Health Canada says these changes are unlikely to be ready until the end of the year.

Buying cannabis health products without a prescription is a step in the right direction. But the typical attitude of Health Canada bureaucrats is that public health and safety trump your personal autonomy. So the agency will now be targeting cannabis producers promoting terpene profiles that they’ve decided are not “flavors of cannabis.”

Why Bother Amending the Cannabis Act?

Why bother amending the Cannabis Act when the government should scrap it altogether? The entire Liberal Legalization scheme has insulted the Western legal tradition of free markets and the rule of law. 

All they needed to do was remove cannabis from the Criminal Code. We already have laws on the books that facilitate peaceful associations. Tort and criminal law provide security, while contract, property, and commercial law facilitate cooperation and exchange. Politics doesn’t need to enter the picture. Politicians certainly don’t need to draft new legislation and create roles for their already inflated taxpayer-funded bureaucracy.

The three major hurdles for small craft producers are:

  1. Barriers to entry because of the high costs of bureaucracy
  2. Arbitrary rules on some products, such as THC limits on edibles and capsules
  3. How the LPs can tap equity markets and starve out their competition who are malnourished because,
  4. Excise taxes ensure Canada won’t ever have a middle-class of cannabis producers.

Will an industry roundtable consisting of large producers and government bureaucrats solve these issues? Or will they only address the excise tax since even the larger producers send half their revenue to Ottawa?

Time will tell, but LPs and bureaucrats seem to think the roundtable will be a cure-all.

I have my doubts. If you want some insight into what this “cannabis industry table” is going to be about, look at who supports it. If you want some insight into what amending the Cannabis Act will look like, take a gander at everything else this government has (or hasn’t) done.

A true, small L, classical liberal cannabis market won’t occur until Justin’s Liberals are out of power.





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Aurora Cannabis laying off 12% of its workforce – Cannabis News, Lifestyle

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Aurora Cannabis announced it is laying off 12% of its workforce as the company reorganizes.

A spokesperson said, “Today we delivered against that commitment as we announce a corporate reorganization that will allow Aurora to operate as a leaner, more agile, and future-focused company, fit for success in the evolving global cannabis industry.”

Aurora is embarking on a $90 million cost savings project.

Aurora Cannabis is laying off 12% of its workforce

Aurora Cannabis is laying off 12% of its workforce

The Edmonton-based company confirmed the layoffs to The Canadian Press. They did not provide details.

The cuts are part of an effort to streamline Aurora into a profitable company.

Spokesperson Kate Hillyar said the company identified cost savings in their third-quarter earnings as the key to profitability. Aurora Cannabis announced net losses of $1 billion in its third quarter.

Like many of Canada’s large licensed producers, Aurora has never made a profit.

The company’s third-quarter financial and operational results saw a 17% sequential decrease in revenue to $50.4 million.

“If you take a look at the top players in Canada, take a look at where their stock prices are compared to where their all-time highs were, and we’re taking a look at losses 99 cents on the dollar,” says Nawan Butt, Portfolio Manager at Purpose Investments. “It’s all to the determent of the equity holder for the LPs. And I’m surprised more equity holders aren’t appalled at some of the decisions management have taken.”

Bad Year for Aurora

Aurora Cannabis laying off 12% of its workforce isn’t the only bad news. Earlier this year, they announced the closure of three greenhouses. One of these places is Aurora Sky in Edmonton, employing 13 percent of the workforce.

Initially hyped as a pioneer in cannabis growing technology, Aurora Sky is now closing. If this doesn’t demonstrate the bursting Canadian cannabis bubble, then what does?

Still, some might say Aurora is reaping what they sowed when they speculated. When they gleefully watched the Canadian cannabis stock prices climb to nonsensical proportions. They once claimed they’d supply a third of the country with its cannabis. They bought up every small niche company in sight. Built more greenhouses while the legacy market was in a supply glut.

All to the determent of the equity holders. The company was never selling cannabis, according to one anonymous insider. “They were always just selling equity.”

Now Aurora Cannabis is finding that it must start selling cannabis people are willing to buy.





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Canadian Cannabis Sales for April 2022 – Cannabis News, Lifestyle

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Statistics Canada has released cannabis sales figures for April 2022. Canadian cannabis sales increased by 3.7% from the previous month to C$372.4 million.

Compared to April 2021, sales are up 25.8%.

Canadian Cannabis Sales: Details

Canadian Cannabis Sales

Statistics Canada cites an increasing number of retail stores and falling flower prices for the boost. We can break down Canadian cannabis sales data province-by-province.

Ontario, the largest province in population, increased sales by 4% from the previous month and up 53% from April 2021.

Alberta, the second-largest province, was up 2% from March and 10% from the previous year.

Despite its restrictive retail model (and striking workers), Quebec was up 18% from March. But, true to form, it only increased 3% of sales from 2021.

Interestingly, British Columbia was down 6% from March and up only 21% from April 2021. Reasons for this may include the proliferation of grey-market shops on Indian Reserves. As well as the popularity and consumer loyalty to BC Bud, of which only a handful hold federal licences. The rest of them remain underground four years after legalization.

Comparing Alberta and Ontario

Canadian Cannabis Sales

Examining Ontario and Alberta offers insights into Canadian cannabis sales.

Ontario began legalization with higher sales than Alberta, with the two provinces equally matched in late 2019. However, since the summer of 2020, Ontario‘s cannabis sales have increased almost exponentially.

This increase in sales corresponds to the drop in cannabis prices. Over the past year, the average unit price has decreased by 13.2%, while the number of units sold continues to trend upward. Since April 2022, the market has amassed $165 million in total sales. And as total sales increase, the prices of cannabis products decrease.

Potential Problems with Canadian Cannabis Sales

Canadian Cannabis Sales

Canadian cannabis sales may be trending upward, but competition impacts each store’s revenue. As Ontario has demonstrated, in 2020, the average revenue per store declined from C$100k in average weekly sales to C$20k in 2022. So while Canadian cannabis sales remain strong in Ontario, average revenues have declined for individual retailers.

The average retailer saw negative growth in April 2021, down -3.7% compared to April 2020. Examining April 2022 Canadian cannabis sales, the average Ontario store is now down -14% in revenue.

Toronto Cannabis Stores Consolidate

In response, cannabis retail stores are now consolidating. Consolidation is apparent in Toronto, where, since 2021, cannabis stores have doubled, with roughly 300 in operation in April 2022.

Superette has bought Canoe for $5 million and has acquired Dimes Cannabis.

Dutch Love has closed its doors. Owned by the Donnelly Group, a spokesperson said the company no longer sees the Toronto market as viable due to the saturation of cannabis stores.

It’s a buyer’s market for Canadian cannabis sales.





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