ABOUT THE FLASH
Each month, LeafLink Insights will share data-driven insights into some key topics like category sales, state by state performance, and pricing analysis. These takeaways are meant to help you better understand where the industry is headed and what kinds of opportunities exist for your business.
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APRIL 2021 FLASH
National View: The wholesale cannabis industry, as measured by LeafLink’s GMV (Gross Merchandise Value), grew 101% in March 2021 year-over-year (YoY).*
When analyzing brands on LeafLink starting prior to January 1, 2020, GMV grew 39% YoY in February 2021. The top-performing brands for each of our six key states in February were:
Item 9 Labs (AZ)
Harmony Extracts (CO)
Platinum Vape (MI)
State View: Michigan grew the fastest at 79% compared with the same period a year ago.
Categories: Concentrates saw the largest drop in platform market share (-.9 percentage points) from February 2021 to March 2021.
Buyers and Sellers: During March 2021, average sales per seller grew 38% YoY, and average spend per buyer grew 43% YoY.
2021 shows consistent growth as the holiday approaches
This month, we visualized marketplace growth during the weeks leading up to the biggest cannabis holiday of the year, 4/20. By using daily sales to calculate a 7 day rolling GMV calculation, we are easily able to compare volume for specific weeks of the year across 2019, 2020, and 2021.
In 2019, 4/20 shopping happened closer to the holiday itself. About a week and a half before 4/20, there was a surge in sales followed by a steep decline, indicating that retailers did the majority of their 4/20 shopping in early April.
In spring of 2020, when a national emergency was declared in the US due to COVID-19, retailers rushed to restock and keep up with a spike in consumer panic buying, leading to a major stock up event the week of March 16th The following week, when many states enacted strict stay-at-home orders, wholesale sales declined. While there was still an increase in activity in the weeks leading up to 4/20, sales were subdued compared to the year before.
This year, after seeing a slight bump in activity early in the month, we saw consistent growth in sales starting in early March leading all the way up until 4/20. This behavior displays consistent effort from retailers to stock their stores for the holiday while keeping up with an increase in consumer demand as states began to reopen. Essentially, 2021 was a more typical year in terms of 4/20 sales - more similar to 2019 than 2020.
KEY STATE FOCUS
Nevada moves to positive growth year-over-year growth as the state reopens
For March 2021, wholesale cannabis sales measured by transactions on LeafLink’s marketplace (GMV) increased by 101% YoY.
To help clients better understand state-level trends, we disclose market-specific information for six key states each month. Out of those disclosed this month, half grew at an accelerated pace year-over-year and the others decelerated compared to February. Michigan saw the fastest growth at 79% with California lagging at 3% growth compared to March 2020. Notably, Nevada swung from -11% YoY growth in February to +50% in March. Growth rates in this chart represent YoY growth of brands on the platform since January 2020.
Edibles & Ingestibles market stabilizes
Flower, our largest category, gained 3.5 percentage points year-over-year in share to end March 2021 at 30.5%. Bulk Flower gained 3% percentage points year-over-year. Concentrates lost nearly a full percentage point in share month over month, comprising 14.5% of GMV in March 2021. The third-largest category, Edibles & Ingestibles, stopped its decline seen since 2019 and comprised 19% of our GMV in March 2021.
RETAILER SEGMENTATION VIEW
Comparing Buyer Audiences in Nevada vs. Michigan
This month, we compared Average Order Value for Retailers in NV and MI. Using two states as examples, we can see how difference in order frequency contributes to a group’s overall value. The 2nd quintile, where most NV sales lie, has an implied monthly value only 7% more than MI, as both AOV and Orders per month are within 5% of one another. However, the 3rd quintile, where MI sees most of its volume, has an implied monthly value 69% greater than NV. Though the AOV of each state is within 0.5% of each other, NV only sees 59% of the orders MI does in the same bucket.
To advertise to buyers in your state, please reach out to our Advertising team.
Cartridges under-index in heavily competitive Michigan and California
Each month, we visualize the relative competitiveness (as measured by the distance from the trendline in the charts below) of 7 categories in key states to help clients best position themselves for the future and take advantage of opportunities to capture market share.
In March 2021, competition in Michigan and California largely mirrored one another, with Cartridges being the only category in either state able to be considered under-saturated, each by only 0.6 percentage points. Accessories, Concentrates, and Topicals saw similar symmetry between the two states, with over-indexing scores averaging only 1% in difference.
Transaction volume is up by over 38% YoY
In March, we saw an 82/28 split between brands seeing an increase in sales, the largest since 2019. Median brand growth was approximately 50% MoM, while those that declined saw a median reduction of 18%. Overall average transaction volume per brand increased by 29% MoM during this month and 38% compared to the same period last year.
The top brands in terms of same-store sales growth in each core state were Item 9 Labs (AZ), Jeeter (CA), Harmony Extracts (CO), Platinum Vape (MI), Stiiizy (NV), and CBDiscovery (OR).
Retailers spent 43% more in March 2021 vs. March 2020
We saw similar historic growth when analyzing March 2021 buyer spend. 76% of buyers increased spend at this time, and the median growth in 48% MoM spending. Those buyers who did reduce their spend decreased it by 20%. Average transaction volume per buyer increased by 28% MoM and grew 43% compared to the same period last year.
Flower prices remained consistent
Average listed Flower prices*** remained consistent during March, averaging .2% growth each week to end the month at $1,264, only .01% below where it ended in February. In California specifically, Flower prices rose during March, ending the month 1.5% above the previous high.
Average listed Concentrates prices** fell consistently during the month, dropping nearly 2% each week. At the end of March, the average price of Concentrates was $47.55, a 2% fall from its final price in February.
*In each of 2019 and 2020, we lock the number of brands on January 1st of each year and measure GMV for these brands only.
**Same store sales refers to the comparison of GMV for the same brands in the 2019 period to GMV for the same brands in the 2020 period.
***Flower pricing is in lbs and concentrates is in grams.
Gross Merchandise Value (GMV) is defined as unit price times quantity sold. This is a barometer for overall volume of activity on our marketplace.
About LeafLink Insights
LeafLink Insights is the intelligence engine of the cannabis industry. By connecting brands, retailers, investors, and other industry participants to real-time first-party data, LeafLink powers smart and rapid industry growth. To learn how our suite of customizable analytics products can help your business optimize sales performance, request a demo.
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