How Was 2020 for Cannabis/CBD Companies? Actually, There Was Some Good News

That said, there is some upbeat news that comes from the cannabis/CBD data-analytics company Brightfield Group: specifically, the launch in 2020 of none less than 912 new products.

Particularly successful were candy, cartridges/pods and resin/rosin products, plus new kinds of disposable pens and baked goods, Brightfield tells us in a just-released year-end report.

“Even with the year we’ve had, while the pace of innovations in many [other industry] companies has slowed, in cannabis we really have not seen that happen,” Brightfield Managing Director Bethany Gomez said in an interview this week.

“We’ve seen an acceleration; we’ve seen new products launch, new types of products launched. We’ve seen a great level of sophistication,” Gomez continued. “In addition, the pace of innovation and sophistication of the products coming out continues to increase.”

The bottom line? “Edibles and vapes had a better year than cannabis bud,” Brightfield reports, “but signs point to an improved product mix.”

Brightfield’s Findings (further detailed below):

• Seasonal options for products are very much part of the mix. Mint-flavored cannabis products, for example, grew in share of shelf during the cold early months of 2020, but were then replaced in the spring by fruity flavors.
• Move over CBDs: This year saw the rise of the alternative cannabinoids CBN (cannabinol) and CBG (cannabigerol).
• Relaxation and stress relief, often named as consumers’ top aims with cannabis, have been particular consumer intention this year; 81 percent of consumers in a Brightfield survey said that cannabis helps them deal with the stress of Covid-19 and its economic effects.

Methodology

The measurement Brightfield used to compile the report was each product’s share of shelf, referring to its distribution power in terms of consumer demand. This was measured, Gomez explained, by web crawlers. That technology enabled two tracks of information: One involved “social listening,” to find out what cannabis consumers are talking about and what they’re saying. The second track entailed sending those web crawlers out to every dispensary website in the country to take a snapshot of what products have produced the biggest sales.

“We can zoom holistically and see trends,” Gomez explained of the technology. “We can see what products are being most widely distributed nationwide; we can see what trends are emerging from pricing, from product type, from a positioning standpoint. And we look at it from this top-down view to help us understand the pace of innovation.”

Percentage share of shelf figures from January 2020 (Q1) were compared to those of September 2020 (Q3) to come up with final figures. Attributes such as dosage, flavor positioning and cannabinoid ratio were examined as were categories like candy, disposable vape pens and more.

How This Information Aids Innovation

“Getting a gauge on the product types and attributes consumers desire will provide for a successful product mix that’s in tune with consumer demand,” the report noted, listing the industry categories that accomplished just that:

The Winners

The product categories singled out by the report’s researchers for the highest percentage increase in share of shelf, Q1 to Q3, were:

• Candy + 3.88 percent
• Cartridge/pods: + 2.98 percent
• Resin/rosin: + 2.48 percent
• Disposable pens: + 1.64 percent
• Baked goods +0.95 percent

The Losers

Conversely, the “not-so winners” named by the report were:

• Drinks
• Bud
• Tinctures and topicals

Trends

Rise of the lesser-known cannabinoids: CBN, touted for its sleep-inducing capabilities, is part of the innovation trend using the newer cannabinoids, Brightfield reports, though it adds the caveat that, “The science behind these effects is not yet clear.”

Also growing in popularity is CBG, which has no distinct benefit but whose appeal may be simply its “newness.” Brands may be hoping for a “halo effect” from this basic “mother” cannabinoid, the report points out.

In the interview, Gomez pointed out that the rise of lesser-known CBN and CBG had been “something people have been talking about” that became actuality in 2020. “We saw the first CBN products hit shelves,” Gomez said. “Kiva Midnight gummies were a really big launch, the top edible brand in California.”

Now that consumers understand CBD a lot more, there’s more consumer attention to products’ CBD/THC ratios in edibles, Gomez said. “We’re moving away from ‘the highest THC content that you can get’ to a lot more intention around the cannabinoid mix.”

Top candy brands by YTD total shelf: Among the top 10 cannabis candy products on shelf by year-to-date share of shelf, Brightfield names the brands Cheeba Chews, Smokiez Edibles, Kiva Confections and Wyld. All of these brands sell in at least four legal markets, Brightfield says.

In terms of preferred flavors, raspberry (12.5 percent) was most popular, followed by watermelon (11.6 percent). For product strength, the THC-CBD dosage of 1:1 dominated 68 percent of shelf for cannabis candies revealing their ratios. And of the reasons consumers use these candy products, the top one was natural (42.2 percent), followed by relaxation (22.8 percent), followed by focus and creativity (9.7 percent).

Candy’s share of shelf, meanwhile, saw a shift toward luxury and premium prices, Brightfield reports. Budget and standard-price candy both lost percentage points.

Baked goods were ubiquitous: “Special brownies” hold almost a legendary place in cannabis culture, Brightfield points out, and even examining only 3.2 percent YTD distribution – a quarter of candy’s share of shelf – baked goods saw a 40 percent increase.

Cartridge/pods: the most distributed cannabis product type for 2020. This was the case despite the vape crisis of 2019. In fact cartridge/pods had a 21.9 percent YTD share of shelf.

“We saw an incredible amount of innovation in the vape space,” Gomez pointed out. “This was really a direct result of ‘Vape Gate,’” meaning the widespread concerns in 2019 over dangerous black market vape products. Consumers this year were enthusiastic about “clean” vapes, even despite Covid-19’s being a respiratory illness. “Even though there was a lot of [initial] suspicion that inhalables were going to take a significant hit, we saw the contrary,” Gomez said. Innovative vape products were a hit.

An example from the report: The brand Select, for instance, launched an Elite Live Resin cartridge that markets itself as “now infused with freshly harvested live resin terpenes.”

For top brands, Brightfield names Stiizy as the source of half of them with a lot of credit going to that company’s ability to distribute in California, Nevada, Washington and Michigan. Curaleaf also had distribution in states other than California. Cannabis carts/pods were available mostly in 500 mg. packages – 73.9 percent of shelf YTD were this size.

Disposable pens: the means for vaping. This category comprised only 3.8 percent of shelf YTD but these products’ distribution grew by 68 percent in 2020, Brightfield reports.

Resin and rosin: the most powerful source of potent doses of THC. In 2020 resin/rosin “increased in share of shelf more than any other concentrate, gaining 2.48 percentage points to bring its YTD distribution to 6.3 percent,” Brightfield reports

What’s Coming in 2021

“I’m excited to see the wave of new products slated for 2021,” Gomez said. “So many brands were so capital-constrained this year and are finally starting to get more in the way of funding, so we expect the pace of innovation to increase.

“In 2021 the trend to more sophisticated products will continue much more in the realm of individual products…that are much more pandemic friendly – that don’t require the level of sharing. I think there’ll be more sophistication in terms of consumer] intentions.”

Another prediction from Gomez: “more cannabis [products] getting back into the good graces of investors,” helping companies escape their previous cash-strapped limitations.

In the report’s final section, Brightfield reminds readers of the 2020 election’s addition of Arizona, Montana, New Jersey and South Dakota to the legal recreational-cannabis fold.

In addition, states’ markets are showing the potential to meld, Brightfield says: Brands already operating in California or Nevada are able to enter Arizona’s adult use market – and bring along their much-needed experience.