Oregon: What to Expect for Edible, Concentrate, and Topical Sales

With the recent ability to sell Edibles, Concentrate and Topical products to recreational consumers in Oregon, we look to the Washington market as a model to provide insights into how this newly available segment will impact sales within the Oregon cannabis market. 

Market Growth

After the launch of Edibles, Concentrates, and Topicals in Washington products in those categories quickly grew to consume about 15% of the total market share as measured in total sales dollars. Edibles saw the quickest growth rocketing from 0% of sales in July to 13.5% of sales by December. This share was short-lived and after a few months it dwindled to 6-8% where it still hovers today. 

Concentrates saw a slower and steady growth, due mostly to fewer brands and products coming out. Concentrates have seen consistent growth month over month with no decline. Rising from just 3% at the end of 2014 to nearly 9% in the most recent months. Topicals currently take up the smallest portion of the market at just over .5% of the total market after over 18 months of availability. While the total share is small Topicals  are seeing strong month over month growth. 

Market Growth

While these categories quickly made up a large portion of the of the total sales they did not take share from the other categories; rather, they increased the total market size after their introduction. This is evidenced by the quarter over quarter growth of these categories compared to other categories in the market. These categories had strong growth in the first few quarters after their introduction and leveled off to have similar growth rates to the rest of the market place. Even during the introductory phase of these products other categories experienced high rates of quarter over quarter growth.

Margins and Pricing Trends

As time progressed margins in these categories began to compress from extremely high to a number more normal for the industry. After roughly a year margins had compressed from the highs of low 90’s to between 50 and 55% and stayed steady at this rate

Margins and Pricing Trends

As margins shrank pricing also decreased. In the first few months after launch these categories saw mostly high priced items; as time progressed new items at lower price points began to take up a larger share of the market place. Specifically, the Edibles category had almost items in the $0-$10 range in the first few quarters and today these products take up nearly 60% of the total Edible units sold.

Brands and Products

After the launch of these categories new brands began to enter the market, though the rate at which they enter varied significantly between the categories. Concentrates saw the most brands enter the market with over 150 brands existing in the market today.

Brands and Products

While there are many more brands in the market place for concentrates each individual brand produces fewer distinct products than in other categories.

Segment Analysis

As the categories grew new segments entered. Concentrates began with only Wax, Honey/Hash, Oil, Kief, Hash, and RSO with the first three taking up over 90% of total category sales. Today, however, there are many more segments and traditional segments make-up a smaller portion of total sales. In the pie chart below, the ‘Other’ slice consists of Honey/Hash Oil, Kief, Live Resin, Rosin/Non-Solvent, and Shatter.

Edible sales are at present primarily dominated by Chocolate and Candy. In the beginning of the category, shortly after it was launched in 2014cookies played a much larger role holding 25% of the market sales. The ‘Other’ slice is made up of 11 other slices, each with less than 5% of the market. These segments, in order of size, are: Truffle, Cooking Oil, Honey/Sugar/Sweeteners, Dehydrated Fruit, Crackers & Crisps, Espresso Beans, Brittle, Nuts + Granola

Segment Analysis

Topical sales are dispersed between the three largest segments, Transdermal, Massage Oil/Lube, and Lotion & Salve. This has changed since the category first launched in 2014 when it consisted of only Lotion & Salves.

Edible THC (mg) Limit of 15 mg

With the limitation of 15 mg for Edibles in Oregon the distribution of sales and products could be significantly different. In Washington just over50% of units and 20% of dollar sales for products with less than 15 mg. There are over 500 distinct products in the Edible category with just over 200 of these containing 15 mg or less THC.

Edible THC (mg) Limit of 15 mg

Some segments are made up almost entirely of products that contain 15 THC (mg) or less such as Dehydrated Fruits, Brittles, and Soups though these categories are quite small in size. Larger categories Candy, Lozenges & Gum have most products which contain a considerable amount more.

About Headset

Headset is market data and business intelligence for the cannabis industry. Our extensive Industry Report deep-dives into specific brands to better monitor the competitive landscape as well as 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 market.

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