Increasing Popularity of 7/10 Exemplifies Rise in Cannabis Concentrates

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Courtesy of Select

Increasing Popularity of 7/10 Exemplifies Rise in Cannabis Concentrates Cannabis concentrates are one of the fastest-growing product categories, gaining attraction from consumers and companies looking to expand their operations.

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July 10, 2020 Brian MacIver (/author/11460) Business and finance (/news/category/business-and-finance) News (/news/category/news)

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July 10, also known as 710 or Oil Day, is the cannabis industry’s second annual “holiday.” Although not as popular or as well celebrated as 4/20, July 10 has picked up steam in recent years thanks to the rising popularity of concentrated cannabis products.

Sales data from various markets show that as sales continue to grow across markets and flower continues to dominate the product category lists, concentrates are one of, if not the fastest-growing, product segment.

The Colorado Marijuana Enforcement Division’s (MED) 2019 annual report (https://drive.google.com/file/d/1rCWw9AquV9Pr1STMbv8dySrU6L2wJHfI/view) noted 40,229 pounds of concentrate products were sold across both the medical and adult-use markets that year, up nearly 128% from 2016 (https://www.colorado.gov/pacific/sites/default/files/2016%20MED%20Annual%20Report_Final_106252018.pdf)when 17,647 pounds of concentrate products were sold. In comparison, in 2019, 350,429 pounds of flower products were sold across both the adult-use and medical markets, compared to 335,640 pounds of flower in 2016, an increase of only 4.4%.

In Massachusetts, a newer adult-use market, flower remains the top-selling and fastest-growing segment, although concentrates continue to show steady growth. In June 2019, nearly $19.3 million worth of dried cannabis flower and $12.9 million of concentrates were sold. In June 2020, more than $26.6 million worth of flower and just under $14.1 million worth of concentrates were sold, an increase of 38% and 17%, respectively. (Massachusetts’ market also was affected by a temporary mandatory shutdown of all adult-use sites in a statewide COVID-19 related stay-at-home order.)

Cannabis extract sales also have been booming in Canada since extracts were legally allowed to be sold starting in October 2019. That month, 320,201 units of concentrate products were sold on the non-medical market according to Health Canada data (https://www.canada.ca/en/health-canada/services/drugs-medication/cannabis/researchdata/market/extracts.html#tbl-2). In April 2020, the most recently reported month, 813,972 units were sold in the adult-use market, an increase of 154%. In that same time, flower sales have decreased slightly from 5,204,955 packaged units to 5,199,858.

Building a National Concentrate Brand Certain cannabis concentrate companies have been able to ride this wave, growing from niche product manufacturers to national brands. Select, with its recent acquisition by multi-state operator Curaleaf, is one such company. After establishing itself in the cannabis marketplace with its cotton wick cartridge in Oregon in 2015, Select is now sold in California, Nevada, Arizona, Colorado, Michigan, Maryland, Oklahoma and Connecticut, according to Cameron Forni, the president and co-founder of Select.

Since founding the company, Forni has seen the cannabis consumer evolve on concentrates.

“What we've seen over the past five years among consumers is an evolution in appreciation for hardware and oil quality,” Forni wrote to Cannabis Business Times in a statement. “Across the industry there has been an evolution of terpene usage and formulations.”

Select Elite Live, a concentrate product that combines THC oil with high-terpene extract (HTE), saw first day sales double that of other Standard Elite products, Forni says. “This tells us that customers are excited about terpene innovation, not just THC potency.”

He confirms that concentrate sales spike on Oil Day, but notes that concentrates are especially popular on 4/20.

“Vape pens and concentrates have experienced doubled or nearly doubled sales around holidays like 4/20, negating the theory that holiday shoppers tend to prefer flower,” he says.

While increasing in popularity, Forni says sales data shows that concentrates are mostly popular with a small subset of super-enthusiasts. “In looking at sales data from 7/10, we have observed that the general uptick in concentrate sales specifically is driven by a smaller, but growing and enthusiastic group of dabbers.”

Curaleaf Explains Its Purchase

For Joe Lusardi, Curaleaf’s CEO, the decision to acquire Select in February 2020 came down to tapping into a market that it had yet to really dig into. “Select was an attractive prospect for us as the highest revenue generating wholesaler in the U.S., and the leading lifestyle brand on the west coast with an incredibly talented management team behind it,” Lusardi said in a statement to Cannabis Business Times.

“We believe it was a good time for us to further build our adult-use offer and increase our presence on the West Coast—which we think will pay off as more states look to cannabis legalization for tax revenue and job creation in the wake of COVID-19,” he added.

Lusardi also noted the increased ability Curaleaf now has to conduct R&D with an experienced concentrate manufacturer, something that is of interest to a company trying to appeal to as broad a range of consumers as possible.

“Our mission as a business is to increase confidence in cannabis consumption and make it accessible for everyone —from the first-time user to the cannabis connoisseur, people using cannabis for a variety of health and wellness needs through to those choosing it as an alternative to a glass of wine,” Lusardi said. “Through our integration of the Select business we’re developing a premier R&D offering to look into new form factors and product development.”

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