By Harrison Bard, Custom Cones USA CEO & Co-Founder
The cannabis industry is constantly evolving. Each year, more U.S. states introduce medicinal and adult-use cannabis programs, legacy markets mature, more customers become familiar with cannabis products, and companies innovate new form factors.
New markets mean new customers, emerging brands, and fresh products marketed to curious consumers. The speed of evolution, however, creates challenges for retailers looking to attract and retain customers in a hyper-competitive market.
The Current State of the Pre-Roll Industry
Looking for answers to those questions about product mix and SKU count, Custom Cones USA — a producer of pre-rolled cone packaging, machines, and pre-roll compliance — partnered with industry insight authority Headset to author a comprehensive whitepaper on the pre-roll segment of the cannabis industry.
The research found that pre-rolls are the fastest-growing product segment in the industry, growing 12% year-over-year (YoY) in the United States and 38% YoY in Canada.
More specifically, in 2023 infused pre-rolls have become the largest pre-roll segment, generating nearly 60 million dollars in monthly sales. So how popular are pre-rolls really, and what is driving this growth?
Just How Popular Are Infused Pre-Rolls?
The data suggests the average cannabis consumer is looking for fast-acting and high-potency products, with the top three product segments being mixed strain pre-rolls, disposable vape pens, and infused/connoisseur pre-rolls.
Pre-rolls are quickly becoming the favorite consumer product as the U.S. saw 22% YoY growth in infused pre-rolls, with Canada seeing an astounding 1,426% YoY growth.
This is significant, as mixed strain pre-rolls only grew 440% YoY, and disposable vapes only grew 160% YoY in Canada. These data points are proving notable gains, but what’s driving the expansion?
Automated machinery can efficiently produce infused pre-rolls at a larger scale, allowing producers to keep the price down, making them too affordable to pass up. More specifically, automated, infused pre-roll machines can infuse hundreds of pre-rolls an hour, taking production to the next level.
Infused pre-rolls are such a popular market segment that 58.4% of surveyed companies said they produce or sell infused pre-rolls. Infused pre-rolls are cheaper than the average pre-roll today, and the rising trend of pre-roll multi-packs make them especially appealing to retailers.
In 2018, multi-packs of regular and infused pre-rolls made up 27.7% of the market. Now, multi-packs make up 47.62% of the market, representing a growth of around 20% over five years. The rise of infused pre-rolls and multi-packs will continue to push the market forward.
The Future of the Pre-Roll Industry
Overall, pre-rolls are a driving force in the cannabis market as they are the fastest-growing product segment and offer what cannabis consumers are looking for — high-potency products that are affordable and convenient.
The data indicates pre-rolls will overtake flower as the largest-selling product category by 2030. This trend will lead to more innovation in the infused pre-roll space, increased multi-pack sales, and, as the price of flower and oil comes down, combined with improvements in pre-roll automation, pre-rolls will continue to be more affordable and convenient than ever.
This article first appeared in Volume 5 Issue 2 of Cannabis & Tech Today. Read the full issue here.
