A look at Cannabis Vapor Pen sales trends

Introduction

Vapor Pens are one of the more exciting product categories in cannabis. Across Headset’s reported categories, Vapor Pens represent the second and third most popular category in Canada and the US respectively. Despite the category’s large consumer base, Gen Z consumers will likely play the biggest role in the trajectory of this already established product category, especially as they continue to mature into the market. In the following report, we’ll examine category growth, popular products, and demographic trends among Vapor Pen products in both Canada and US markets.

Key Takeaways

• Vapor Pens are the third most popular category in Canada and second most popular in the US, capturing 17.1% and 23.6% market share respectively.
• Vapor Pens are growing in both total sales and market share across most markets with the exception of MD, MI, and OR
• Younger consumers show the greatest preference for Vapor Pens, particularly Gen Z consumers.
• Average Item Price & Equivalized Price both have fallen significantly in the US and Canada. Pricing compression seems to be slowing down in Canada but speeding up in the US.
• Brand count has increased over the last three years, though at a depreciating rate.
• In the US, the number of distinct Vapor Pen products peaked and fell during the second half of 2022. Brands are likely abandoning struggling SKUs in favor of more profitable products.
• Cartridges are by far the most popular category segment in both the US and Canada, though “All in One Disposables” capture around 15% of total sales in the US.
• The most popular package size for cartridges are the single gram or 0.95g. In the US, half gram cartridges capture one quarter of all sales.

Category Performance

Vapor Pens Market Share by Country

The Canadian market is dominated by three product categories, Flower, Pre-Roll, & Vapor Pens, which collectively make up 84.2% of total 2022 sales. In Canada, Vapor Pens represent the third largest product category by total sales, capturing 17.1% of the market in 2022. This is a distant third place to Flower (40.7%) and Pre-Rolls (26.4%), though a strong third compared to the market’s fourth largest category Edibles (5.9%).

The US market is slightly less concentrated with 76.4% of total 2022 sales coming from the top three product categories. Vapor Pens are the second most popular category (23.6%) behind Flower (40.5%) and ahead of Pre-Rolls (12.3%).
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Vapor Pens Market Share by Market

In Canada, Vapor Pen popularity varies significantly by province. In SK, where Vapor Pens are most popular, the category captured 23.5% of total sales in 2022. That is 57.1% higher than the 15% of total sales captured in BC, the market with the lowest share of the category.

In the US market, IL captures the highest market share of Vapor Pens with 27.4% of total 2022 sales, followed by FL (25.4%) and CA (25%). The lowest representation of Vapor Pens are in MI (20.6%), MA (19.8%), and OR (19.2%), though the category still captures nearly a fifth of total sales in these states.
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Sales Growth by Market

When we look at Vapor Pen sales growth, we see that across most markets there has been healthy category growth between 2021 and 2022. The Canadian markets capture four of the five top spots for year over year category sales growth with emerging US markets such as MI, MA, and IL not far behind. However, this is a limited view of the growth of category popularity as this metric largely reflects macro market sales growth trends. Growing US emerging markets and Canadian markets have grown steadily while US legacy markets like CO, WA, NV, OR, and CA have struggled. However, it’s important to note that all markets except OR (-1.3%) and MD (-6.1%) have experienced positive Vapor Pen sales growth. Even struggling markets such as NV (11.1%), CO (7.1%), and WA (7.1%) have found a refuge in this category.
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Market Share Over Time

Vapor Pens in both Canada and the US are growing. However, category growth in Canada hasn’t been linear — the category is growing but somewhat slowly. The US on the other hand is showing consistent growth in category market share over the last 24 months. Between January 2021 and December 2022, the market share for the category increased 3.1% in Canada compared to 7% in the US. In the 2022 calendar year, Canada and the US saw a 8.3% and 23.3% increase respectively in share of total sales for Vapor Pens.

Though US legacy markets show little to no growth in overall sales, these markets show some of the highest growth rates in category market share, CO (+27.4%), NV (+24.8%), WA (+22.7%), OR (+17.9%). Alternatively, consumers in Canadian or newer US markets such as IL (+4.2%) or Ontario (+3.1%) have seen smaller increases in category market share. Only Michigan saw a year over year decrease in Vapor Pen market share, falling from 21.4% to 20.6% of sales.
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Brand Growth

As the popularity of Vapor Pens have increased in Canada, so has the number of brands available in the market. Between 2021 and 2022, brand count increased by 84.5% and grew by an additional 55% over the following year. In 2023, Vapor Pen and ancillary brand count will likely continue to grow with the category, though at a lower rate.

Product Growth

Product count growth in Canada has been steady for the last two years with an 89.2% increase in Vapor Pen products since January 2021 and a 14.4% increase during 2022. However, the brand growth seems to be leveling off, indicating that new launches may be fewer in 2023 than in the previous 2 years.

In the last 2 years, US markets have slowly increased the amount of distinct Vapor Pen products sold each month. After being nearly flat since the start of 2022, product count peaked in July but subsequently saw a 13.6% decrease in December 2022. This downward trend will likely continue into 2023. At its peak, CA sold 6,000 distinct products per month. As the market continues to tighten, we will likely see brands consolidate and abandon unsuccessful product lines.

Popular Products

Top Products by Total Sales by Segment

The number one Vapor Pen segment in both the US and Canada is cartridges. Cartridges have long been the standard of the Vapor Pen smoking experience, representing 93.3% of all sales across Canada. Cartridges are almost as popular in the US (84.5%) as they are in Canada, however, US consumers also spend a notable amount (15.4%) on “All-in-one Disposable” Vapor Pens.

Popular Package Size

In both countries, the 1 gram cartridge captures nearly 70% of total Vapor Pen sales. The half gram package size captures nearly a quarter of total sales in the US but only 11.1% in Canada. Another popular package size in Canada is 0.95g (10.4%), which collectively puts the nearly synonymous 1 gram and 0.95 gram sizes at almost 80% of the market.

Pricing

Average Item Price (AIP) & Equivalized Price (EQ Price)

Falling prices are an issue across all cannabis markets and categories. In Canada, this is also true for Vapor Pens, though prices are falling at a slower rate. During 2021, the equivalized volume price (EQ price), also known as the price per gram, fell by 35.6% to $46.91 per gram. In 2022, the EQ price continues to fall but at a reduced rate of 15%, ending the year at $38.66.

US markets have seen the opposite trend. In 2021, EQ price dropped 9.8%, which is modest relative to the rest of the market. However, in 2022 EQ price fell a drastic 23.5%, a trend that seems likely to continue into 2023.

Demographics

This graph compares the proportion of total market sales in Canada by demographic group to the proportion of Vapor Pen sales attributed to each demographic group — the index below the graph compares these values. If the index for a demographic group is greater than 100, then that group spends relatively more on Vapor Pens than they do on other product categories. If the index is lower than 100, then that group spends relatively less on Vapor Pens compared to other product categories.

In Canada, Gen Z shows the strongest preference towards the category by making up nearly 30% of all Vapor Pens sales compared to just 21% of sales across all categories. Gen Z is already known for its attraction towards nicotine vaporizers. However, we can clearly see that this preference also influences the ways in which they consume cannabis. This is likely due to their familiarity with the medium, as we see see diminishing Vapor Pen preference with increasing age.

US markets see a similar trend among younger generations, though sales concentration is spread out a bit more evenly across other demographic groups. Millennials, the largest consumer group for cannabis, show a greater preference to this category than their Canadian counterparts. Together Gen Z and Millennials make up 62.8% of all cannabis sales and 70.8% of all Vapor Pen sales.

Conclusion

Vapor Pens are an established and consistently growing category. Even in a tough macro-economic climate, we’ve seen total sales, market share, and brand count grow across most markets. However, market-wide pricing compression is also driving Vapor Pen prices to new lows. This category is vastly preferred by a younger audience and reusable cartridge products are the dominant segment on the market. Generally, Vapor Pens have proven to be a resilient product category and we’ll likely see continued growth in the future as a younger generation of consumers ages into the market.