Roughly 80% of the country’s adult population remains untapped as operators continue a THC arms race
Over the past few decades, the THC content in cannabis and cannabis-infused products has increased dramatically. With advancements in cultivation and more sophisticated genetics, today’s high-end flower can exceed 30% THC.
Improved extraction and processing technology has dramatically increased the supply and potency of distillates and concentrates, pushing THC content over 95% in some cases. Most of these high concentration products are designed and marketed to the regular cannabis consumer, which has resulted in a race to the top for potency and the bottom for price. This “arms race” dramatically impacts the industry’s profitability and public perception.
This increasing potency and focus on the daily cannabis consumer market is driven by many factors. Since cannabis products are generally restricted to dispensaries that are only allowed to sell cannabis, non-consumers are not generally exposed to cannabis brands or infused products. By forcing consumers to seek out a single type of store, we have concentrated our market to more regular and committed customers. This self-selected consumer base, combined with the residual stigma of prohibition, is a key driver of increased concentration and lower price.
In comparison, let’s examine the only other widely available plant-based intoxicant for adults, alcohol. The cannabis industry has long resisted comparison to alcohol for many good reasons, but that doesn’t mean we shouldn’t take some lessons. An adult can walk into any bar in the world and order anything from a 3% light beer to a shot of 151-proof rum. Nobody goes out for a night with friends, does a few shots of Everclear then goes to sit in the corner alone for three hours. Most people seem to prefer mild intoxicants with a wide range of flavor choices and consumption formats, with the ability to customize all of the above in real time.
Despite this clear lesson, nearly all recreational cannabis products are trying to be those shots of 151. Where’s my light beer, my glass of wine, my fancy cocktail?
While most brands continue to pursue the traditional high strength/low price model, there is a growing focus on ways to innovate and appeal to a broader consumer base. Looking at investment rates, stock prices and organic market growth plateaus across the country, the need to access new consumers and markets is apparent. The cannabis industry is rife with creativity and exuberance, so it should come as no surprise that there are some exciting new products looking to meet this growing need.
For example, Flower Farma’s line of nutrient dense, infused hemp seed oil blends called OLA are packaged and at 5 milligrams per serving and calibrated to enjoy as part of any elevated meal or dessert.The mild concentration is much more suitable for Sunday brunch with friends than sitting on the couch watching TV, exactly what the next generation of consumer is going to want in a recreational product.
Bud Love is another company that’s found an innovative way to enhance flavors and improve the experience for consumers looking for a milder experience. Bud Love smokable add-ins use a rich blend of botanical terpenes and the “mother cannabinoid,” CBG, infused into a natural smokable leaf to give consumers more control over the flavor profile and concentration level of their flower.
Social Highs is a New York City-based company offering a unique combination of concentration levels, flavor profiles and consumption formats. Social Highs has developed a line of vapor elixirs that range from CBD-only to 5%, 15% and 50% THC-infused. Using a specialty vaporizer and a proprietary blend of extracts and terpenes, Social Highs dispenses a rich, inhalable vapor into a standard cup or glass with a cover which can then be “sipped” through a straw like a beverage.
Designed to complement events ranging from music festivals to infused dinners, Social Highs Vapor Bar concept has been seen out and about at private events in the New York and Las Vegas markets and is looking to grow into new markets and potential applications as adult use and public consumption become more common. At the lowest concentration level, a cup of Social Highs vapor is less than half a milligram of THC per serving, making it more approachable to the non-cannabis consumer.
As infused meals, consumption lounges and a general end to prohibition gain momentum, cannabis and THC-infused products will be exposed to a much wider audience. The stigma of consumption will continue to fade and the roughly 80% of people who don’t currently consume cannabis are more and more likely to try our products.
Right now, that can be a real problem. We have all seen situations where a friend or family member that isn’t a regular consumer decides to take a few hits of your 58% infused pre-roll (sorry Mom, I warned you) or accidentally makes their way to the dab bar. It can be unpleasant at best and dangerous at worst. It is certainly not a social experience and can turn someone off to cannabis in a big way.
If the goal is to attract new consumers, the last thing we can afford is for that first experience to be unpleasant or off-putting. Broadening the appeal of our brands and products isn’t just a concept, it’s imperative if we want to remain a growing and investible industry.
The legal cannabis industry has managed to push close to $30 billion in sales with all of the restrictions in place and the barriers of federal prohibition. With an untapped potential market of about 80% of the adult population, the industry is poised for explosive growth, but only if it can bridge the gap and appeal to new customers.