[Canniseur: I never thought about price and getting people out of the illicit market. Maybe it’s true, maybe it’s not. But price is always a determining factor. Does COVID-19 have anything to do with it? I don’t know. Just like wine, most people want the box-of-wine for $10. There will always a small minority who want the best quality at whatever price. But it seems if we’re going to move to a mostly legal market, we need to watch price and make it cheaper than what illicit dealers want to sell their product for.]
Editors Note: This story was written by Jackie Bryant.
Like everything else touched by COVID-19, unexpected trends and shifts have occurred in the cannabis industry. One such shift is towards consumers seeking value products, which are rising in popularity due to a reduction in work and income across many different industries as the COVID-19 crisis wears on. In particular, low price/high THC combinations seem to be the magic bullet for anyone shopping for cannabis on a budget.
Canndescent, a brand that initially entered the market with a luxury-focus, recently launched the company’s third brand, Baker’s Cannabis Co. The brand offers lower-cost but still decent quality products, like $6 one-gram pre-rolled joints and $55 half-gram pre-ground pouches, which come equipped with rolling papers and crutches.
The style echoes one of the original legal value cannabis brands, Old Pal, which began selling its pre-ground cannabis flower in similar packaging and has gained popularity for its surprisingly high-quality product despite being priced comparatively lower than others in the space.
“Quality weed at fair prices has always been in high demand,” says Rusty Wilenkin, CEO of Old Pal, noting that this isn’t exactly a specific-to-COVID trend. “Value at Old Pal means more than just perceived value of low cost, to us value is the best quality at fair prices. During COVID, we’ve seen steady demand from consumers for our products. The industry overall has felt disruption with changing and varying regulations for retail shopping state to state. And while this is not unique to the cannabis industry, with the industry being as young as it is, these changes have been even more demanding.”
“Consumers aren’t visiting dispensaries as often as before,” explains Canndescent’s CMO Sam Arellano regarding a specific buying trend that can be directly attributed to COVID. “When they do, they’re opting for cannabis in larger weight/sizes with strong value equations to carry them between visits. We’re experiencing this increase in demand with Baker’s Cannabis Co. Despite COVID-19, demand has been consistently strong and steadily growing as consumers come to trust Baker’s quality, price, and availability.”
Arellano continues, speaking to a very specific type of customer–people who genuinely use cannabis as part of their daily routine. So much of the cannabis industry revolves around the highest potency possible, which is expensive to cultivate and produce. Add in state and local taxes on top of dispensary mark-up, and suddenly, someone who was used to paying legacy market prices faces an incredible new sticker shock for something that is part of their everyday life.
“Beyond price, they care about efficacy, availability, and trust,” Arellano says of frequent users. “Trust that the cannabis they choose is free from pesticides and other harmful containments, grown responsibly by a cultivator they respect. Availability as in, always there when they want it. And efficacy as in quality product and consistent experience.”
Patrick Martin from Harborside (OTC: HSDEF) in Oakland also sees the low price/high THC correlation, but suggests there are other value trends afoot, too, and that rather than hunting for potency regardless of any other factors, buyers are instead settling on personal ratios of price to THC relative other factors.
“For some, low price and high THC correlates to value,” he says, “but we still have a varied customer base that is looking for high quality, small-batch items, flavor, consistency, and a wide selection of strains/options. We think this is why people tend to shop for the sales items for the best deal versus only shopping for items that are consistently priced lower.”
Overall, Martin says, Harborside has seen an increase in customers shopping for their sales products as well as increased basket sizes.
In any industry, the value market has always been, well, invaluable to the success of most brands that don’t market themselves to be exclusively luxurious. In an age where inequality is rising and in an industry where inequality is always on the forefront of political issues, like cannabis is, it makes even more sense that value-marketing would become an increased priority for cannabis brands looking to corner the market.
Now that cannabis has been deemed essential in many states, sweeping federal legalization is again being discussed and it appears that economic upheaval is here to stay, at least for a while, the market for value cannabis brands has never been brighter.
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