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.
For a deep dive into our customizable, single-source analytics products, please request a demo.
JANUARY 2021 FLASH
National View: The wholesale cannabis industry, as measured by LeafLink’s GMV (Gross Merchandise Value), grew 96% in December 2020 year-over-year (YoY).*
On a same-store sales basis, GMV grew 31% YoY in December 2020. The top-performing brands in November were:
High Grade (AZ)
Pacific Stone (CA)
Seed & Smith (CO)
Peregrine Manufacturing (MI)
Pharmer's Market (OR)
State View: Arizona grew the fastest at 95% compared with the same period a year ago.
Categories: Flower saw the largest drop in platform market share (-2.2 percentage points) from November to December 2020.
Buyers and Sellers: During December 2020, average sales per seller grew 37% YoY, and average spend per buyer grew 41% YoY.
KEY STATE FOCUS
Arizona market growth accelerates
For December 2020, wholesale cannabis sales measured by transactions on LeafLink’s marketplace (GMV) increased by 96% 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, three states experienced accelerated growth from October: Arizona, California, and Oregon. Nevada declined YoY for the third month in a row.
Arizona’s growth accelerated significantly due to three factors: clearing of inventory before the end of the year in preparation for recreational sales in 2021, sellers restocking for the holiday season and the backlog of lab testing easing up.
Year-over-year growth in MI faced more difficult comparables in December than in November, as recreational sales began to ramp up in the state as of December 1st, 2019.
Flower’s shortages continued
Flower maintained its top spot during December 2020, with the Packaged Flower subcategory maintaining 16% of all marketplace sales. However, Flower also saw the largest drop MoM in market share (-2.2 percentage points), led by Packaged Flower, which saw a 5% decrease in sales MoM. CO and CA flower shortages drove the category’s decline in market share.
RETAILER SEGMENTATION VIEW
Comparing Buyer Audiences in California vs. Colorado
This month, we compared Average Order Value for Retailers in CA and CO. The top 20% of retailers in CA spent $9,909 during the previous three months, approximately 23% more than the top 20% of retailers in CO. While they spent less on average per order, buyers in CO ordered more frequently across all quintiles. Targeting retailers in the 2nd and 3rd quintiles (or the “average” buyers for each state) could be the most lucrative way to increase a brand’s sales in CA and CO.
To advertise to buyers in your state, please reach out to our Advertising team.
Nevada’s Cartridge category is the most competitive in the nation
Each month, we visualize the relative competitiveness 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 December 2020, Edibles & Ingestibles in Nevada was the most competitive category, with 58% of brands selling the category while only making up 16% of sales. Conversely, in Michigan, Cartridges was the least saturated, with only 30% of brands selling the category while making up 32% of sales in the market.
Transaction volume is up by over 37% YoY
In December, we saw a 57/43 split between brands seeing an increase in sales, with the majority seeing an increase during the month. Median brand growth was approximately 28% MoM, while those that declined saw a median reduction of 19%. Overall average transaction volume per brand increased by 9% MoM during this month and increased 37% compared to the same period last year.
The top brands in terms of same-store sales growth in each core state were High Grade (AZ), Pacific Stone (CA), Seed & Smith (CO), Peregrine Manufacturing (MI), Cannavative (NV), and Pharmer’s Market (OR).
Retailers spent 41% more In December 2020 vs. December 2019
We saw similar upwards growth when analyzing December 2020 buyer spend. 54% of buyers increased spend at this time, and the median growth in 30% MoM spending. Those buyers who did reduce their spend decreased it by 24%. Average transaction volume per buyer decreased by 8% MoM and grew over 41% compared to the same period last year.
2020 Concentrates prices peaked in December
Average listed Flower prices*** peaked at $1,392 during December 2020, continuing a steady climb since mid-November. In California specifically, Flower prices fell during December, ending the month 13% off their October high. The fourth quarter is a period of seasonal decline in Flower prices in CA and 2020 was no exception. However, price declines were more moderate than in the fourth quarter of 2019.
Average listed Concentrates prices** rose consistently in December, increasing nearly 2% per week during the month. At the end of December, the average price of Concentrates was $52.24, nearly a 10% increase over the previous high, and the first time this year the index finished the month above $50.
*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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