As we move into 2024, there is no hotter sector in the cannabis market than pre-rolls.
According to a recent analysis Custom Cones USA did in partnership with cannabis analytics firm Headset, pre-roll sales are up 13.4%, despite relatively flat sales growth in the U.S. In Canada, sales grew by 36.5%, with pre-rolls now about to overtake flower as the no. 1 category in the country.
By August 2023, according to Headset, pre-rolls accounted for 15.3% of total U.S. cannabis sales and 33.3% of Canadian sales.
But within the pre-roll sector there are several trends driving that growth that producers and processors can jump on to make sure they get their share of those customers, including the increasing popularity of infused pre-rolls, the rise of the multi-pack and the use of automation to produce mixed-strain pre-roll options.
Made by combining flower with a cannabis concentrate, infused pre-rolls are one of the hottest products currently in the cannabis market.
In the U.S., according to Headset, infused pre-rolls make up 41.6% of total sales in the segment, a year-over-year increase of 19.6%. It makes sense because as prices for flower and concentrates drop in a market, infused pre-rolls take off because of price drops and consumers consistently reaching for items with higher potency.
In Canada, the year-over year increase is even larger, with infused, or “connoisseur” pre-rolls jumping 129% over the previous year to now make up 32.6% of the pre-roll market. That increase can be attributed to Health Canada clarifying a rule in late 2021 that led to more and more licensed producers launching infused pre-rolls into the market, resulting in a staggering growth rate in the segment of more than 1,400% since 2021.
We expect this trend to continue in the new year and recommend that all producers and brands consider adding infused pre-rolls to their lines. New machines, including automated infused pre-roll filling machines and new mixing machines that allow for the combination of flower with any type of concentrate in just minutes, are also allowing producers to pack and infuse hundreds of pre-rolls an hour, making them easier and less expensive to produce.
THE RISE OF THE MULTI-PACK
One of the other big trends in the pre-roll segment is the increase in sales of packages of two or more pre-rolls.
We saw multi-pack sales really start to increase during the pandemic, when frequent trips to stores were more difficult, but the trend has sustained even as the world began returning to normal. Since 2021, there has been an almost 400% growth in multi-packs that have a volume of 2 or 5 grams, as well as steady growth across most other sizes. In 2018, multi-packs made up about 27% of all pre-roll sales but in 2023 we’re seeing that multi-packs make up about 49% of all pre-roll sales in the U.S., compared to single-serve packages.
In Canada, that number jumps to a whopping 89.2% of sales.
While some businesses are simply packaging multiple pre-rolls of the same type — particularly the smaller, “dogwalker” size min-cones that usually run about 0.3 grams — others have expanded to create multi-packs with multiple strains
For producers and consumers, multi-packs represent an opportunity for cost saving. On the manufacturing side, it takes less time to package and label a pre-roll multi-pack than it does to do it individually. There is also typically less packaging used in a multi-pack versus individual packaging options. This cut in labor and material costs can help producers keep their margins healthy and their prices low.
For consumers, multi-packs are perfect for those that enjoy a specific strain, as well as those that like to mix it up with a variety pack. With pre-roll quality constantly improving and the latest in pre-roll-making machinery allowing producers to make them quickly and easily, it really is a situation that benefits everyone.
It’s important to pick the right packaging for your pre-roll multi-packs though. While the ubiquitous plastic “doob tube” can usually hold two pre-rolls, other options are necessary for larger packs, with tins and slider boxes being the main options, and providing plenty of space for customization to ensure the brand’s name and logo really stand out. There’s also the ability to customize the pre-rolls themselves with labels like “indica” and “sativa” printed on the filter so companies can create packs with multiple effects designed for different parts of the day.
One note though: another trend we see on the horizon is a move toward maintaining freshness, especially in multi-packs, which get opened and closed multiple times, exposing the product to air. Because of that, we always recommend adding a humidity pack to your pre-roll packaging so the customer never has a bad experience with a dry pre-roll that burns too fast and too hot.
AUTOMATION AND THE MIXED STRAIN PRE-ROLL
Another segment of the pre-roll market seeing rapid growth is the mixed-strain pre-roll.
In U.S. markets, mixed-strain pre-rolls — featuring multiple types of flower rolled in a single pre-roll cone — saw the highest year-over-year growth of any cannabis retail segment at 63%. In Canada, that number jumps to a massive 440% growth, second only to infused pre-rolls.
We attribute much of this to advances made in automated pre-roll machinery and the increase in the number of manufacturers using pre-roll filling machines. Automated machines require consistency in input to work properly. But cannabis plants are anything but consistent — even the same strain can come out differently from harvest to harvest, let alone the differences between the huge number of cannabis strains out there.
However, by mixing strains together into a blended form, you can create a more consistent input material. Blending strains also allows for the easier use of cigarette machinery, which is what California manufacturer Lowell Farms uses to create its popular line of pre-rolls, all of which are mixed-strain.
Pre-rolls are one of the most dynamic segments of the cannabis market. The pre-roll segment is not only the fastest growing segment, but also the segment facing the least amount of price compression. Their convenience to produce as well as purchase and consume make them the No. 1 add-on item at dispensaries around the country, but because of that, producers need to take care to ensure that their products stand out and grab consumers.
Jumping on trends like an increase in infused pre-roll sales or multi-packs or mixed strain pre-rolls can certainly boost sales and brand recognition, but even simpler ways to stand out, like customized branding or the addition of premium glass or wood filter tips can help get your brand to the top. At the end of the day, budtenders are your gatekeepers, so make sure your brand is authentic and connecting with budtenders and other industry tastemakers.
With pre-rolls about to overtake flower as the No. 1 category in Canada, we expect to see pre-rolls surge to the No. 2 spot soon in the U.S. If you’re looking for some predictions on the next big trends in pre-rolls, we are forecasting the growth of pre-rolled blunts and other premium pre-roll products, as well as an increased emphasis on pre-roll freshness.