Consumers still prefer bud to edibles or extracts

Herbal bud remains far more popular among cannabis consumers than are edibles or extracts; at least, according to an analysis of retail sales data in Washington state.

Researchers from Carnegie Mellon University in Pittsburgh PA and from the RAND Corporation in Santa Monica CA reviewed sales data from over 36 million separate retail cannabis transactions that were recorded in the State of Washington.

They tracked sales that occurred from July 2014 to September 2016.

The title of the report is “Variation in cannabis potency and prices in a newly legal market: Evidence from 30 million cannabis sales in Washington state.”

The average THC-level for cannabis extracts is more than triple that for cannabis flowers (68.7 compared to 20.6 percent).  but, apparently, 710 hasn’t caught up with 420 yet. For the newbie, 710 refers to OIL written upside down and refers to the dab and extracts culture. The number 420 is code for “time to smoke some marijuana.” It has become a modern day custom for people to smoke at 4:20 every day and especially on April 20 (4-20) every year. And there are sayings like, “It’s always 4:20 somewhere.”

The edibles and tinctures market and topical products, like liniment and lotions, likewise continue to grow in popularity.

Two-thirds prefer the flower or ‘bud’

Authors reported that “traditional cannabis flowers still account for the majority of spending (66.6 percent), though they acknowledged that sales of plant-derived extracts have increased significantly over the past two years.

Researchers also reported that prices on cannabis-related products fell sharply in the months following legalization “as new retailers entered the market and production expanded.”

Wholesale bud market prices drop

Cannabis Benchmarks, an industry data analysis service, has been tracking the trends and charted a strong downward path for wholesale cannabis prices. The chart below follows prices from 2015 to early 2017. Note that the per pound bulk price drops every year during the fall and winter, when the outdoor crop comes in en masse.

Cannabis Benchmarks Professional Service is designed for cannabis business decision makers, speculative traders, hedge funds, risk managers, investment banks, debt and equity analysts, and others requiring the ability to conduct detailed modeling and analysis.

The overall drop in cannabis prices would be significantly greater due to legalization were it not for all the licenses, fees, testing costs, operating costs, employee benefits that come into play for a tightly-regulated legal business.

The traditional marijuana market worked outside the law and avoided those costs, and illicit growers still have a strong foothold in the market. However, the benefits of not having your assets seized or being put behind bars is a strong incentive to come above ground and play by the rules.

Two new books that cover the industry

Despite veiled threats from the Republican controlled federal government, cannabis industries continue to open across the country and are represented by the National Cannabis Industries Association.

Two new books have come out over the past year to help people gain a foothold in the emerging cannabis industry.

Chris Conrad‘s latest book, The Newbie’s Guide to Cannabis and the Industry, written with Jeremy Daw, profiles the plant, its attributes and its connection to human history and experience, then goes into the factors that should be considered when getting into the marijuana — and even the hemp — industries, an overview of the marketplace, how to navigate it and identify possible points of entry.

Debby Goldsberry’s Starting & Running a Marijuana Business (Idiot’s Guides) takes a blow by blow look at the business side of cannabis, written by someone with first hand experience in Berkeley and Oakland, California.

Conrad and Goldsberry have both been active in the cannabis reform movement since the late 1980s.