BDS Analytics. Actionable Insights on the WASHINGTON Cannabis Market Roy Bingham (727)

Transcription

1 BDS Analytics Actionable Insights on the WASHINGTON Cannabis Market Roy Bingham (727)

2 What is up with WASHINGTON Cannabis Sales? 2

3 Who is this guy? At BDS Analytics our mission is to drive the cannabis sector to thrive with well-informed decisions based on factual data and simply put, we are: Cannabis Business Intelligence and Market Share tracking 3

4 Washington dispensary Cannabis sales growth slowed in the last few months. Nevertheless, December 2015 sales were up 360% over December 2014 Overall Trends Washington Retail Cannabis sales excl. taxes ($ millions) Source: Washington State Liquor and Cannabis Board Note: Prior to July 1, taxes were paid by dispensaries and included in transaction value. After July1, they were paid by the consumer and excluded. For consistency, BDS Analytics has deducted the tax that was included prior to July 1

5 Overall Trends Quarter-by quarter growth was dramatic Washington Quarterly Cannabis Retail Sales excl. taxes ($ millions) +58% +9% % +78% +75% 0 Q3 '14 Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Source: Washington State Liquor and Cannabis Board Note: Prior to July 1, taxes were paid by dispensaries and included in transaction value. After July1, they were paid by the consumer and excluded. For consistency, BDS Analytics has deducted the tax that was included prior to July 1

6 And quarterly prior year comparisons show astronomical annualized growth rates 430% for Q4! Overall Trends Washington Quarterly Retail Cannabis Sales excl. taxes ($ millions) +1007% +433% Q3 Source: Washington State Liquor and Cannabis Board Q4 Note: Prior to July 1, taxes were paid by dispensaries and included in transaction value. After July1, they were paid by the consumer and excluded. For consistency, BDS Analytics has deducted the tax that was included prior to July 1

7 Where were all those sales? 7

8 In the year to end June 2015, 10 counties accounted for (81%) of those revenues Regional Sales Washington Dispensary Cannabis sales by county (% of total) 2% 3% 3% 3% 4% 9% 10% 12% 13% 14% 27% OTHER* SKAGIT COWLITZ KITSAP THURSTON WHATCOM PIERCE SNOHOMISH SPOKANE CLARK KING 0% 5% 10% 15% 20% 25% 30% Source: Washington State Liquor and Cannabis Board *Remaining 20

9 Which categories have most of the market? 9

10 Quick Intro to BDS GreenEdge Product Classification system 5 Layers of product classification support granular segmentation and in-depth analysis and trend spotting. 4 Super-Categories 24 Categories 65 Classes 30 Sub-Classes 15 (L5-Lowest Level) Segmentation by Channel: Medical vs. Recreational/Adult Use

11 In Q3 2015, Flower was 69% of Washington dispensary sales by $m Super Category Sales Ingestibles, $10.09, 10% Pre-rolled, $5.80, 6% Other, 1% Washington Dispensary sales in $ Millions - By Share of Revenue Q Concentrates, $16.22, 15% 100% = $105 Million Flower, $72.70, 69%

12 Smaller categories like concentrates (15% of sales by Q3) grew even more rapidly than Flower Super Category Sales Washington Dispensary sales in $ Millions - By Share of Revenue 12

13 Which category drove most of that growth? 13

14 Sales Super Category Trends Q2 to Q3 sales growth overall was 58% with Flower growth only 50%, outstripped by concentrates (+80%) and especially pre-rolled +668% +43% +80% Washington Dispensary sales in $ Millions - By Share of Revenue Other Pre-rolled* Q Q *Note much of the growth in pre-rolled is due to re-classification +50% Ingestibles Concentrates Flower

15 In Dollar terms flower still contributed the majority of the growth in revenues Sales Super Category Trends Washington Dispensary sales By Growth in Revenue ($m) $65.9m Q $24.1m Flower growth $7.2m Concentrate growth *Note much of the growth in pre-rolled is due to re-classification $3.0m Ingestible growth $5.0m Pre-rolled* growth $0.5m $105.8m Other Q

16 Prices Declined steadily as sales grew Washington Dispensary sales in $ Millions and average retail prices in $ 16

17 And those declining prices mean that unit sales have grown even faster than revenue Washington Dispensary sales in Units/Grams and average retail prices in $ September to September unit/gram sales were up 18x, while revenue ($) was up 10x 17

18 What drove the $24 million growth in Flower sales? 18

19 In Q3 2015, Hybrid strains accounted for 61% of flower sales Flower Washington Dispensary sales of Flower by genus in $ Millions 100% = $72.7m

20 All three genus groups grew strongly and fairly evenly with hybrid growing fastest and sativa slowest Flower Washington Dispensary sales of Flower by genus in $ Millions $72.7m $11.8 Sativa $48.6m $16.7 $8.3 Indica $29.0m $11.6 $8.3m $1.5 $1.5 $5.3 $17.9m $3.6 $4.4 $9.9 $5.2 $7.2 $16.6 $28.7 $44.2 Hybrid 2014 Q Q Q Q Q3

21 Flower prices declined rapidly from over $17 per gram to about $9 as sales grew to $20m per month Washington Dispensary Flower sales ($ Millions) and price trends ($ per gram) 21

22 Within Flower the top ten strains are now consistently about 20% of total flower sales Flower Washington Dispensary Flower sales ($ Millions) $72.7m All other $48.6m $29.0m $8.3m $17.9m Top Ten Strains Q Q Q Q Q3 2015

23 Blue Dream is the leading strain followed by Cherry OG. Both have had major ups and downs Flower Washington Dispensary Flower sales by strain ($ Millions) 23

24 What drove the $7.2 million growth in concentrate sales? 24

25 Concentrates and extracts Overall concentrate sales have surged Washington Dispensary Concentrate and Extract sales ($ Millions) 25

26 Average concentrate and extract prices declined slowly then rebounded to about $40 per unit/item sold while sales grew strongly to $6 m per month Concentrate and Extracts prices and revenue 26

27 Pre-filled cartridges are the largest subcategory in concentrates Concentrates and extracts Q Washington Dispensary Concentrate and Extract sales by category share of revenue ($ Millions) 100% = $16.2 million Unspecified means at this time we do not have enough data to sub-categorize 27

28 $16,000,000 $14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 Within concentrates the fastest growth was prefilled cartridges (up to $6m in Q3), but shatter, wax and oils also grew strongly Q Washington Dispensary Concentrate and Extract sales by category share of revenue ($ Millions) $18,000,000 $0 Total 2014 Q3 Total 2014 Q4 Total 2015 Q1 Total 2015 Q2 Total 2015 Q3 Unspecified Other Prefilled Cartridge Oil Wax Shatter Concentrates and extracts

29 What drove the growth Ingestible sales? 29

30 In Q3 2015, within Ingestibles, Candy was the largest category at 30%, followed by Infused foods, chocolates and tinctures Q Washington Dispensary Ingestible sales by sub-category ($000s) Ingestibles 100% = $10.1 million

31 And within Ingestibles all the major categories grew strongly with chocolates up the most since Q4 2014, but pills rocketing in Q Q Washington Dispensary Ingestible sales growth by sub-category ($000s) Ingestibles

32 Ingestible prices declined more slowly to about $16 per item while sales grew to about $3.5m per month but dipped in September Q Washington Dispensary Ingestible revenues ($millions) and average prices ($) 32

33 Thank You Roy Bingham (727)