Data from the United States about the THC pills marketplace shows new consumers are entering the cannabis market, which is useful news for investors in marijuana
Speculation among investors about the potential size of the recreational cannabis market in Canada runs the gamut from wild-eyed to dour, with plenty of room in between.
Dour probably misses the mark. Wild-eyed is highly discouraged. But the continuum of commercial possibility for investors in Canada next year looks potentially solid, based on trends in the United States.
One trend of interest is the rise of products in the United States that are mostly absent from the black market, things like tinctures, topicals and pills. A variety of products like these are experiencing excellent growth, and they suggest the U.S. market has introduced new consumers to cannabis — that the market has grown beyond what was entirely a black-market, and illegal, consumer landscape prior to legalization.
In other words, we see signs that the cannabis markeplace is not fixed — that consumers who have not experimented with illegal cannabis are willing to try products once they are legalized.
Pills Among Areas of Consumer Growth
Consider pills, which were one of the fastest-growing categories in Colorado this year, according to data from cannabis market research firm . Sales between January and September of this year rose 80 percent compared to the same period last year, which crowns the pill one of the kings of growth within the edibles category. In addition, the tablet style of pill — in Colorado, the market is divided into capsules and tablets — rocketed up by 166 percent. And when we break things down with even more granularity and examine tablets that are high in CBD — a compound found within the marijuana plant that is not psychoactive and is often leveraged for health benefits — growth reaches 231 percent. At the same time, consumers in California, Oregon and Washington are spiking demand for pills as well.
What is driving the growth in pills, beyond the normal market enlargement we see nearly across the board in cannabis? People who own pills companies in the United States say at least some of the growth can be attributed to people who are new to cannabis. For them, buying a dab kit is not in the cards, they have rejected smoking in general and the idea of using gummy bears to manage pain or anxiety or just to feel better seems strange. But pills are familiar.
As markets mature in the United States, we see smaller categories like pills, tinctures and topicals rise swiftly. The behemoths in the U.S. cannabis marketplace — flower and concentrates — also continue to expand, but the categories that do not specifically target people who already enjoy marijuana are growing even more quickly. People who unwind with joints may experiment with things like cannabis pills, but they are not the drivers of growth in the category. It’s newbies.
Will pills one day surpass flower in the cannabis marketplace? It is unlikely, at least anytime soon. But categories like pills, which are familiar to people beyond the world of existing marijuana users, may grow as more and more consumers who are fresh to cannabis begin experimenting with the commercial world of legal marijuana.
At this point, it is unclear what marijuana products will be legal for purchase across Canada, and that includes pills, once legalization begins on July 1, 2018. But one thing seems clear in the United States — legal cannabis consumers are not limited to those who enjoyed marijuana prior to legalization. New consumers are entering the marketplace and experimenting with different products.