Are Cannabis Strains Still Important? Digging Into Strain Sales Data

Executive summary

This report looks at strains, the cannabis industry’s unique way of categorizing and marketing its products, in terms of sales data. It shows top strains for each state, the overall popularity of certain well-known strains, and strain rankings within product categories, among other important data points. It also offers insight into the phenomenon of non-strain-specific products. It will be especially interesting for people producing and marketing Flower or Pre-Roll products, but also for anyone who works with strain-specific products

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Introduction

Strains are one of the most confounding aspects of the cannabis industry. They are simultaneously sacred, being the oldest and most trusted method of categorizing cannabis, and scientifically dubious, as there is little in the way of peer-reviewed research showing that one strain differs meaningfully from another. Regardless, they are a deeply entrenched part of the cannabis industry and have been, since even the old days of the grey/black market, where vendors would show up in dispensary lobbies with duffle bags of full of cannabis.

However, with the advent of medical cannabis and dispensaries, where cannabis could be presented in a more traditional retail environment, strains went mainstream. Instead of a strain simply being an excuse for your dealer to charge you more, it became a way to understand what the experience or effects of a given phenotype of cannabis would be. Under legal cannabis, the number of strains bred, cultivated, and sold has ballooned even further. The most famous strains still hold strong — Blue Dream, Gorilla Glue, Green Crack, etc. — but have been joined by a seemingly unlimited number of newcomers and crossbreeds.

While, again, there isn’t science to support the claim that all these strains do actually have unique effects, there is science that suggests strains do make a significant difference in the molecular composition of cannabis. According to testing data, Charlotte’s Web, a famously high-CBD strain, reliably falls within a specific range of CBD and THC content. This is all to say that strains, as confusing as they can be, are serious business for the cannabis industry.

Indeed, our data reflects that. We examined the most popular strains by state, category, and generation, and an interesting picture has emerged. While certain well-known strains still dominate the market in places that have lower product diversity overall, the legendary strains are often edged out in places with more mature and diverse markets. 

Even more interesting is the phenomenon of non-strain-specific products — products labeled only by their broad category, like indica, sativa, or hybrid — something that definitely developed after recreational legalization became more widespread. The data indicates that these products may be overtaking traditional strains in sales, suggesting that newer, more casual cannabis consumers are not as interested in nerding out. It may be that consumers are trusting brands to simply sell them a good hybrid, rather than spending the time to research individual hybrid strains on their own. Somewhat related to that, we’ve looked into the relationship between brands and strains, examining how the number of brands selling a given strain affects that strain’s sales rank.

Strains are without a doubt one of the most unique aspects of the cannabis industry. While one can dive infinitely deep into the world of craft beer or even specialty teas, there is no other consumer product that is sold based on such a nebulous labeling system. Beer and tea both have well-defined styles, from oolong to oyster stout. Strains are an unlikely combination of lore, taxonomy, and simple marketing savvy, with no clear rules about what is and isn’t a given strain. Regardless, understanding them is vital to success, and we hope this report will help.
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Methodology

Data for this report comes from real-time sales reporting by participating cannabis retailers via their point-of-sale systems, which are linked up with Headset’s business analytics software. The data included are for 2019, except where noted. Strain names were obtained by scraping product titles in categories including Flower, Pre-Roll, Concentrates, and Vapor Pens, which yielded over 3400 unique strains. All inhalable products including any of these strains in their name were then tagged with the correct strain, with about 80% of all inhalable products in our dataset having a positive match. Products with names that included terms like ‘hybrid’, ‘indica’, or ‘sativa’ were included in the Sativa Dominant, Indica Dominant, and Hybrid Dominant categories, respectively.

Headset’s data is very reliable, as it comes digitally direct from our partner retailers. However, the potential does exist for misreporting in the instance of duplicates, incorrectly classified products, inaccurate entry of products into point-of-sale systems, or even simple human error at the point of purchase. Thus, there is a slight margin of error to consider.

Strains by state and province

This chart shows all of the top selling strains for each state and province that Headset tracks. It’s interesting to note that Blue Dream, by far the most famous strain, only comes in at the top of two markets: Alberta and Colorado. The other top-selling strains are kind of a mixed bag, with only Oregon picking a classic in Jack Here. Washington State has gravitated

Strains by state and province continued

towards the relative newcomer that is Wedding Cake, an indica-dominant hybrid, and is joined by the remaining states in preferring indica or indica-dominant strains. That said, this graph does not include products that are labeled simply by indica, sativa, or hybrid. Only actual named strains are shown.

Market share, product diversity, and top strains

Data on market share demonstrate how profoundly the combination of regulation, culture, and market maturity in each state/province can affect sales outcomes. In Canada, both provinces see over 25% of market share going to their top strains, probably due to the relative youth of the market, while older markets in the U.S. don’t exceed 14%. This suggests that the so-called Green Rush is good for marquee strains, which are the proverbial big fish in little ponds.

To that point, Washington State and California’s top ten strains sell at that full 14%, while Nevada and Colorado see 10% of sales to their top ten strains. This could be because a few top brands in Washington control the lion’s share of the market, while California it may be due to the aggressive consolidation that’s happened since legalization. Either way, U.S.markets have significantly more product diversity than the newer Canadian ones, so it’s harder for any one strain — even an exceptionally popular one — to dominate.

All inhalables aren’t created equal

When it comes to strain preferences, there is actually a good bit of variability between product categories. Blue Dream does come in at the top of the list of preferred strains for Flower and Concentrates, but Pre-Rolls — made from the same raw material as Flower — sell more Gelato than anything else. While Blue Dream takes top honors in two categories and second place among Vapor Pens, it should be noted that Gelato also appears in the top five of all inhalable categories. While Gelato’s rankings are lower, it’s safe to say those are the two most consistently popular strains. It should also be noted that this data is for the U.S. only, as Canada has not begun selling Concentrates or Vapor Pens, and that this is also for strains only, no indica/sativa/hybrid products. We’ll get to those next!

Non-strain-specific products are now a thing

While Blue Dream is perhaps the strain with the most name recognition, and is also the strain that started out with the most market share, it’s recently been overtaken by Wedding Cake. Moreover, both have been overtaken by products that aren’t made with one specific strain, and are simply labeled, in this graph, ‘indica’ or ‘sativa’ (or ‘hybrid’, outside of this graph). We see that these generic products have had a steep rise since mid-2018, when many U.S. markets started to achieve maturity.

We also see that Blue Dream, along with its fellow “classic” strain Sour Diesel, have flatter trend lines. Both strains predate legalization, so they were familiar to many customers previously, and have always enjoyed a larger market share. But they don’t appear to be gaining any new adherents, while newer strains and non-strain-specific products are definitely winning people over.

Everyone’s dreaming

Breaking down strain data by generations shows us perhaps the most unsurprising bit of information in this report: People really like Blue Dream. It is the top overall strain across all generations. Wedding Cake and Purple Punch, the newcomers from our previous slide, have a strong showing here, as does Gelato, which was a winner across categories. But most interesting is the fact that Jack Here is the second favorite strain of Gen Xers, Baby Boomers, and the Silent Generation.

Non-strain-specific products are bargain buys

Looking at this graph, the first thing that should jump out is that products labeled as simply ‘indica-dominant’ or ‘sativa-dominant’ have the highest total sales but also the lowest EQ price (price per gram). This means they’re dominating the market via volume, not premium prices, and so the shift towards non-strain-specific products should absolutely be interpreted as a shift towards value products. All of the popular named strains, and especially the newcomers like Purple Punch and Wedding Cake, have higher EQ prices than total sales. The relationship between EQ price and sales isn’t hard and fast, as a strain can be both expensive and popular if it’s got a reputation like Blue Dream does, but a low EQ price and a high sales volume is definitely indicative of a value product.

Strain saturation

This chart shows a strain’s overall sales rank compared to it’s brand count rank, which is a measure of how many brands sell that strain. So Blue Dream is both the top-selling strain and the strain that is sold by the most brands, with a #1 rank in each category. But looking at the difference between these numbers tells us a lot about how well-loved a given strain is. Or, on the other hand, how oversaturated the market is with it.

Hot new strains like Wedding Cake and Purple Punch are interesting because, for the second and third best-selling strains, they have relatively low brand ranking. This means the strains are doing quite well for the brands producing them. Conversely, strains with a lower sales ranking than brand ranking are probably not doing so well for the people growing them, suggesting that the market is saturated with those strains. Sour Diesel, for example, a popular sativa that’s been around for ages, is only the sixth best selling strain, but has the second highest number of brands selling it. The story is even worse for Gorilla Glue #4, which is 13th in sales and third in brand representation.

Key takeaways

• Blue Dream is a very big deal, but not necessarily the top strain in every state/province.•

Younger markets are easier for big name strains to dominate, while more mature markets with more product diversity see a smaller share of sales to top strains.

• People’s strain preferences change based on their method of consumption, with only Gelato and Blue Dream appearing in the top 5 strains for all inhalable categories.

• Products labeled with no specific strain are gaining rapidly in popularity, which is driven in part by their bargain pricing.

• Every generation loves Blue Dream, but older generations (Gen X+) seem to be the only ones with a preference for Jack Here possibly due to their increased familiarity with his role in medical cannabis history.

• Some strains are selling very well despite only being produced by a few growers, while others are underperforming relative to how many brands grow them.

Conclusion

Clearly, the way consumers see strains is shifting. The biggest story here is the rise of non-strain-specific products, which we suspect is the beginning of a bigger trend. As cannabis becomes increasingly popular and grows into its new role as a moderately risqué consumer packaged good, the customer base will change drastically. While longtime consumers and connoisseurs aren’t going anywhere, they’re being joined in droves by casual users, who may not care too much about the subtle differences between Jack Here and Sour Diesel. While many people consider sativa and indica to be outdated terms, they do serve as very simple ways to convey different cannabis experiences. Traditionally, sativa is uplifting and alert, indica is relaxing and sedating. Labeling products thusly makes it easy for people who enjoy cannabis but aren’t deeply involved in cannabis culture to still enjoy a some what personalized experience.

This would be similar to the very modern phenomenon of people who aren’t craft beer nerds but also aren’t interested in drinking Bud Light ordering “an IPA.” There are thousands of styles of IPAs with very specific characteristics, but the category as a whole does share some key attributes. So too with sativa or indica.

All that said, strains are still an integral part of the cannabis economy. There are still some super strains, like Blue Dream, that do well with pretty much everyone, as well as newer strains — Purple Punch and Wedding Cake — that seem to have captured consumer imagination just as forcefully. It’s safe to say that, while non-strain-specific products will likely continue to gain market share, cannabis will continue to be cultivated and marketed in the framework of strains for a long time. While it may not be a perfectly scientific system, it’s based on a large and longstanding body of accumulated knowledge, and is the current best way we have to describe how the cannabis experience differs between products. The scenario that seems most likely to us is that the market leaves space for low-priced, generically labeled products and strain-specific products, with more knowledgeable or at least more interested consumers gravitating towards the latter.

About Headset

Headset is a consumer data analytics platform that provides market intelligence for the cannabis industry. Our extensive Market Reports deep-dive into specific categories and aspects of the industry to help businesses better monitor the market and perform exhaustive category analysis. Reports are generated via aggregate, real-time transaction data to get a unique and thorough analysis of what’s happening in the cannabis industry as the data becomes available. Headset offers three distinct products that help retailers,dispenaries, brands, product manufacturers, distributors, and investors move ahead in the industry.