Cannabis CBD/THC Industry

Part
01
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Part
01

Cannabis CBD/THC Competitors, Part 1

In rows 3-8, columns C-E of the attached spreadsheet, we have provided an analysis of the Lifted, Planet of the Vapes, and Smoke Cartel in terms of their products, competitive advantage, weaknesses, and marketing. Below is a summary of our findings as presented in the attached spreadsheet.

LIFTED

With its headquarters in Toronto, Ontario, Lifted has been connecting its customers and retailers with ancillary cannabis products since 2018. Since then, it has been serving regions that speak English, French, German, Italian, and Dutch. The company offers one of the most extensive supplies of portable and desktop vaporizers. Some of these vaporizers use conduction heating systems; others use convection, and some a bit of both. Lifted sells only to adults that are up to the age of 21.

PLANET OF THE VAPES

The US-based company, Planet of the Vapes, was founded in 2010. It has its headquarters in Santa Teresa, Puntarenas, Costa Rica. Planet of the Vapes ships to several countries including Israel, Poland, Morocco, the US, and Japan. The company sells several portable and desktop vaporizers, and parts & accessories. It is the official reseller of top brands such as Boundless, Arizer, and Flowermate. Planet of the Vapes sells only to adults that are 18 years and older.

SMOKE CARTEL

Smoke Cartel has been in existence since 2013 and has its headquarters in Savannah, Georgia. It is one of the top sources for smoking accessories in the world. Also, the company has won the High Times Cannabis Cup Best Award and has been featured on Forbes. Smoke Cartel is available 24/7 with the best smoking gear for its customers. It sells only to adults from the age of 21 and older.
Part
02
of three
Part
02

Cannabis CBD/THC Competitors, Part 2

In the attached spreadsheet, we have provided the requested information on Lifted CBD, CBD Marketplace, and Eaze Wellness. While we were able to determine most of the requested information by leveraging different pages on each company's website, we were unable to determine the target market for all three companies, although we were able to determine the demographics of visitors to the Eaze Wellness website. Lifted CBD is a relatively new CBD marketplace, having been founded in 2019. The company's "Terms and Conditions" page indicates the company is domiciled in Delaware. CBD Marketplace was founded in 2018 by Comprehensive Business Developers, LLC. The company is headquartered in Aventura, Florida, and ships to all 50 states in the United States. Eaze Wellness was founded in 2018 by Eaze and is headquartered in San Francisco, California. Before starting Eaze Wellness, Eaze had been delivering a variety of products to consumers in California.

Methodology

For the most part, we leveraged company websites in order to provide relevant information on the requested data and information. Although these answers are not directly provided, we have made educated guesses and inference from the available information. Our research shows that CBD marketplaces are relatively new, and this reflected in the quantity and quality of information available, especially from third-party websites. That said, we were unable to provide the target market for all three companies.

To determine the target market of each company, we started our research by searching for marketing materials from the three companies on credible advertising databases such as Moat but found no information on the three brands. Our research on each company's website already revealed no tangible results. Our next strategy was to go through each company's social media pages to see if any clear theme jumps out or if they posted pictures of a specific kind of group using their products. What we found on these social media pages were generic images, that does in no way provide any insight.

We then tried to see the kind of audience each website was attracting to at least it does serve as proxy and insight into each company's customers. Similar Web only had demographic data for Eaze Well (screenshot available here). We reckon that the reason for no demographic data on Similar Web is because the traffic to Lifted CBD and CBD Marketplace is not sufficient to build a demographic profile.

We also conducted a press search on each company to see if there were any noteworthy news, press coverage, and quotes from company founder(s) or leadership that provided insights into the target market for each company. Regrettably, only Eaze Wellness had any tangible press coverage. However, the available press coverage did not provide any target market insights. One of the reasons for the availability of information on the target market of each company is that marketplaces typically target a broad audience since they host a variety of products.


Part
03
of three
Part
03

Cannabis CBD / THC Competitors, Purchasing Habits

In reference to our findings, the most popular types of products U.S. consumers are purchasing from the Cannabis CBD/THC industry include gummies, flowers, live resin, vapes, CBD tinctures, cannabis beverages, and chocolate. Further details on our research strategy and findings follows below.

METHODOLOGY

In our search for the most popular types of products that U.S. consumers in the cannabis CBD/THC industry are purchasing, we started by searching for market research reports and studies, industry news articles, and press releases that contained insights into the research requirements. With this strategy, we leveraged sources that included PRNewswire, Green Entrepreneur, Market Watch, Markets and Markets, Forbes, Statista among others in our search for relevant information. From the information that was available in trusted industry resources, we were able to understand that the consumer product purchasing trends in the U.S. cannabis CBD/THC industry are difficult to identify because of a number of reasons i.e. cannabis use is illegal federally, cannabis transactions rely heavily on cash due to federal restrictions making it very difficult to track sales, and the industry is still young meaning estimates on trends can vary because only a few years of data is available. Consequently, we relied heavily on the consumer purchasing trends information from States that have legalized the use of cannabis in the United States such as California, Colorado, Michigan, and Oregon. From the insights that we were able to derive from the industry research reports, studies, and articles, we were able to fully answer the research question. All the popular consumer product purchasing trends that we identified have been backed up by hard data as specified by the research criteria.

MOST POPULAR TYPES OF PRODUCTS CONSUMERS ARE PURCHASING FROM THE CANNABIS CBD/THC INDUSTRY IN THE U.S.

In the United States cannabis industry, there are many variables that make tracking product sales difficult. These variables include the fact that cannabis is still federally illegal meaning the available consumption methods and data are regional and the industry is still relatively young meaning statistics within the industry vary with the availability of only a few years of data. Additionally, the industry relies heavily on cash because of federal restrictions making it very difficult to track sales within the industry, especially "since normal business considerations like opening a bank account are not the same for weed businesses."

When Colorado legalized adult-use of cannabis in 2014, the product that fully dominated the market was flowers with more than 60% of sales while other products like concentrates, edibles, and topicals were still far behind. Five years later, the situation in the United States has changed as many more states enjoy legalized adult-use of cannabis, including California which is the most populated state in the U.S.

With this change, the market also changed and it is currently looking very different. Flower dominance has diminished and consumer preferences have evolved drastically. The sale of CBD-rich products is also growing while prices are dropping. In essence, the market is very volatile and fascinating.

1. GUMMIES

Cannabis edibles are a very popular method of ingestion. In 2018, edibles sales reached over $1 billion and the sales are predicted to grow to $4.1 billion by 2022. In Colorado, gummies have been the most popular edible products since 2016 and sales increased by 53% between 2017 and 2018. Additionally, according to data from POS system Flowhub, the sales of infused gummies in Colorado increased by 43% during the Valentines Day Weekend in 2019 as compared to the sales from 2018.

According to BDS Analytics, "gummies are the most popular form of edible cannabis in the market." This can be seen from the fact that gummies represent 27% of all edibles products in California dwarfing products like chocolate bars - 7% and baked goods - 10%.

2. FLOWERS

Although the market share of flowers has been dropping as the trend is moving away from flower and towards a cleaner, more convenient, non-smokable forms of ingestion, flowers still hold the largest market share in the cannabis industry of the United States. This evident from Statista's 2016 analysis that discovered flowers accounted for an impressive 54.21% of the cannabis product market in the U.S. In the same year, edibles, concentrates, vapes, pre-roll, and non-cannabis accessories accounted for 15.56%, 15.50%, 7.5%, 4.26%, and 3.42% respectively. With an assumption that market share is directly proportional to consumer demand and purchasing trends, we concluded that flowers are still a popular product for U.S. consumers within the cannabis CBD/THS industry.

3. LIVE RESIN

Live resin is a type of high-THC cannabis concentrate that is made by freezing the cannabis plant so as to preserve the terpenes that give cannabis its flavor. Generally, live resin is more psychoactive than the other ingestion products as it gives a better "high" experience. During the 2017-2018 period, resin sales increased by around 66% in Colorado and 128% in Oregon and although live resin accounts for a smaller market share than vapes, the product now represents 13% of all concentrate sales in Colorado and this is expected to grow further in 2019.

4. VAPES

For the first time, vapes became more popular than flower in California. This was evident from the fact that vape sales increased by 69% by the end of the first quarter of 2018, "making vapes the fastest growing high-THC cannabis products in California."

Generally speaking, cannabis oils of all types are currently a booming market. According to the first quarter data, CBD vape sales grew by an impressive 105.5%. This increase was driven by the fact that consumers are choosing cannabis oil over flower because it offers a cleaner, more convenient experience. Additionally, the current boom in CBD is expected to continue in 2019 resulting in the creation of an even bigger recreational and medical vape market.

5. CBD TINCTURES

Tinctures feature among the most popular CBD cannabis products because of their versatility. CBD tinctures are classified under CBD oil and they can be added into virtually any food or drink or taken as is. This versatility increased the sales of CBD tinctures by 111.5% between the first quarter of 2017 and the first quarter of 2018.

After the passage of the Farm Bill, extracting CBD from hemp became federally legal but still remained closely regulated. This development means that 2019 will become an even bigger period for CBD tinctures and other high-cannabidiol cannabis products. In reference to Brightfield Group, the CBD market is projected to be worth around $22 billion by 2022.

The sale of tinctures reached $17.45 million in October 2018 while the sales of CBD-rich products reached $13.9 million. This is nearly 80% of the tincture market. In addition, CBD-rich tinctures represent 81% of the tincture market in California.

6. CANNABIS BEVERAGES

In 2018, cannabis beverages were on the receiving end of a good amount of press. When the adult-use states where "year-over-year comparisons are useful are examined - for example, Colorado and Oregon, but not California, which last year was a medical state — growth for beverages is solid, at 37%."

What is being witnessed in the beverage market is the proliferation of products that are beyond large bottles of liquid as powdered drinks, shots, and tea, for example, continue to make inroads into cannabis markets. In California, the sale of tea is fast rising and chipping away at the market share of the broad category of "drinks" while in Colorado, "water-soluble powders are expanding, and diminishing liquid drinks’ market share." In Oregon, cannabis product consumers favor shots more and now sales of shots are nearly on par with drinks in the state's beverage market.

7. CHOCOLATE

Even though "chocolate is no longer the most popular type of marijuana-infused edible, it's still one of the hottest cannabis products thanks to the rise in CBD chocolates." Between the first quarters of 2017 and 2018, the sales of chocolate edibles increased by 166%. By contrast, the CBD chocolate market grew by an impressive 530% in the same time frame. This is despite the fact that the CBD chocolate market is significantly smaller when compared to the entire infused chocolate market although it will represent a larger share in 2019.

For instance, in Colorado, there was a total of $8.7 million in chocolate sales so far by the end of 2018 and CBD-rich products represented a significant $5.35 million of these sales i.e. 61% of the chocolate market. All growth for chocolate pieces was hinged on high-CBD products, which saw a growth of 242% by the end of 2018. Meanwhile, the chocolate that was not high in CBD experienced a 14% decrease in sales. CBD is essentially rescuing the chocolate market in Colorado.
Sources
Sources