Solomon Isreal | MJ Biz Daily
Sales of 1-gram cannabis flower packages tumbled in multiple North American marijuana markets last year, likely related to consumers who shopped less often because of the COVID-19 pandemic but made larger purchases when visiting a dispensary.
The shift away from 1-gram packages offers implications for both retailers and producers trying to keep up with shifting consumer preferences sparked by the pandemic.
Despite the shift, the single-gram flower format â€“ the smallest, cheapest size of marijuana bud available on the market â€“ remains relatively popular in terms of unit sales.
That suggests consumers havenâ€™t given up on the package size altogether.
Nevertheless, the downward slide in 2020 readily is apparent in point-of-sale data from Seattle-based cannabis data-analytics firm Headset.
â€œI think that one of the big reasons that we see grams trending down is as a result of COVID,â€ said Liz Connors, Headsetâ€™s director of analytics.
Connors said the 2020 trend toward fewer sales of small cannabis packages mirrored broader trends in consumer packaged goods during the pandemic.
â€œ(Shoppers) go in less often. We buy more,â€ she said.
â€œAnd if weâ€™re already buying more, itâ€™s more economical, obviously, to buy an eighth (3.5 grams) than it is to buy a gram, because the price per gram for an eighth is a lot less.â€
But the cannabis industry shouldnâ€™t write off the 1-gram flower products, which:
- Generally remain the No. 2-selling flower size by unit sales, after 3.5-gram packages.
- Serve an important role for some shoppers, like those on tight budgets or consumers seeking to try new products at a low cost.
- Could bounce back as the pandemic eases and shopping habits return to normal.
Data shows 2020 decline
Headset market data shows a steep decline in the unit volume of 1-gram cannabis packages sold over the course of 2020 in California, Nevada and Washington state, continuing a downward trend in 1-gram sales that predates the pandemic.
In Washington state, for example, unit sales of 1-gram packages fell by 29% in 2020, from roughly 661,000 units sold in January to 471,000 in December.
Headset data shows even larger declines for 1-gram package sales between January and December 2020 in California (-44%) and Nevada (-40%), although Nevada sales of 1-gram packages started trending back up in November as overall sales recovered.
The trend held true in major Canadian markets: In Alberta, British Columbia and Ontario combined, unit sales of 1-gram packages declined in 2020 by nearly 58% from January through November, according to Headset data that excludes purchases from the government-operated Ontario Cannabis Store online retailer.
Connorsâ€™ hypothesis that shoppers are making fewer trips â€“ but buying more per trip â€“ is â€œsupported by the fact that we see average (basket sizes) having increased throughout COVID,â€ she said.
California, Washington, Nevada all require that retail cannabis be prepackaged, a move that provides comparable sales data for common package sizes such as 1- or 3.5-gram packages.
Canadian federal cannabis production regulations similarly require prepackaged marijuana.
But two other major U.S. markets, Colorado and Oregon, permit â€œdeli-styleâ€ sales of loose cannabis in various amounts, which makes data about 1-gram package sales harder to interpret.
Still, Connors found that in Oregon, the percentage of bulk flower purchases of 1 to 3 grams of cannabis also declined at the onset of the pandemic, as customers bought larger amounts.
Who buys grams?
At Seattle-area retailer Dockside Cannabis, supply-chain manager Erin Elliott said she observed 1-gram flower package sales â€œdecline a little bitâ€ over 2020, although trends have varied between the retailerâ€™s stores.
â€œFor someone who, pre-pandemic, would probably buy an eighth and a gram at the same time, theyâ€™re no longer doing that,â€ she said. â€œTheyâ€™re not coming back every couple of days anymore.â€
Elliott said 1-gram sales have performed better at Docksideâ€™s Shoreline, Washington, location, where the clientele tends to be older and includes more medical patients.
â€œ(For) some of them â€¦ their only social interaction is going to the store, so theyâ€™re more apt to buy smaller sizes,â€ she said.
In Elliottâ€™s view, 1-gram buyers are motivated primarily by simple economics.
â€œPeople might not be able to drop 45 bucks on an eighth, but they can certainly drop $15 on a gram,â€ she said.
But the format also plays a role in consumer experimentation, Elliott believes.
â€œI think a gram size in flower is a really good way for people to try a strain theyâ€™re maybe not super familiar with,â€ she said. â€œThey might be interested in a strain, but theyâ€™re not really willing to put a ton of money into it at the outset.â€
In Ontario, Canadaâ€™s biggest recreational market, store owner Jennawae McLean said sheâ€™s watched 1-gram options become less available since summer.
The small packages have been â€œdesperately lacking on our (wholesalersâ€™) buy (sheet) every week,â€ said McLean, founder and CEO of Calyx + Trichomes, a licensed cannabis store in Kingston, Ontario.
â€œThere was one week where we had the choice of one â€“ that was it. There was a single brand that we could buy.â€
McLean said she always wants to sell larger formats if possible, but 1-gram flower options fill an important market need for shoppers on a budget.
â€œWe might see them every day of the week, but theyâ€™re only spending a little bit at a time,â€ she said.
The decline in gram sales might not have affected all brands and producers equally.
In a statement, Canadaâ€™s Canopy Growth said its 1-gram flower products â€œshowcased growth in 2020, and given its strong performance in the Canadian market, Canopy will continue to provide consumers with 1-gram flower offerings.â€
Grams still popular
Despite the 2020 decline in sales, the 1-gram flower format remains an important product for retailers.
After the ever-popular 3.5-gram size, 1-gram packages are still the No. 2-selling flower size in terms of unit sales in California, Nevada and Washington state, as well as in Alberta, British Columbia and Ontario.
In Washington state, for example, Headset shows 1-gram packages still comprised roughly 19% of all flower sales by unit volume even during November, their worst-selling month of 2020.
If declining 2020 sales of 1-gram cannabis packages can be attributed to the COVID-19 pandemic, itâ€™s possible that the trend could reverse and gram sales could rise again, said Headset analyst Connors.
Like pre-rolled joints, single grams tend to be an add-on that gets purchased alongside other products, Connors said.
To improve add-on sales, Connors said cannabis retailers who sell online could learn something from the strategy of the undisputed king of e-commerce.
â€œWhen you shop on Amazonâ€ she said, â€œimmediately it says, â€˜Did you forget to add any of these (items)?â€™ or â€˜People that buy this also buy that.â€™
â€œThatâ€™s not super common yet for cannabis retailer websites.â€