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TheCannalysts are very interested in market segmentation and on sales of particular goods. ‘Product platforms’ is the preferred vernacular among the CPG types, another way to define context. Phrasing is key after all.
We’ve been in touch lately with Tom Ulanowski of Nextleaf….the guy who we recently did a podcast with on extraction. We’re curious about more mature markets, what consumers in Canada will want, and what’s looking to be the ‘undiscovered country’ of legal cannabis.
Is there some sort of ‘category killer‘ that’s ready to be unleashed upon some unsuspecting stoner waiting patiently in queue at their favorite retailer?
You’re going to hear that term often over the next 8-12 months. It’s the latest flavour of the day’ marketing wise. There’s a few who got there already, albeit probably too soon.
‘Live’ resin is a product made when mature cannabis plants are harvested….and immediately (like within hours) passed through a chilling system that ‘flash-freezes’ the flowers for later extraction. The biomass is continuously held at sub-zero temperatures until it is extracted, which, is also at sub-zero temperatures. And usually done with hydrocarbon as solvent.
According to Tom, the end product is fragrant and enticing. I agree. I’ve been lucky enough to have had several experiences consuming it in my capacity as a ‘Cannalyst’. It is a product that gives effect….while tasting very (very) good. Oils and tinctures and re-combined vape pens….they don’t do that the same way..
Is ‘live resin’ a ‘category killer’?
I looked farther afield into the US to see what ‘mature’ markets in cannabis are selling wares. The insights are revealing.
In Colorado, California, Nevada, and Mass (fwiw, not much data), a sales ratio has been established. For every dollar spent in legal cannabis transactions, it breaks down like this:
- Flower: $0.50
- Vapes: $0.25
- Edibles: $0.12
- Beverages: $0.05
- Concentrates (hard and soft): $0.05
‘Live’ resin isn’t split out in the vape numbers I can see, but, I doubt its’ introduction into the Canadian space will matter much. Indeed, it hasn’t been seen anywhere yet. I know of 2 tons of frozen biomass that was destined to be on the market now….the operative word being ‘was’. It hasn’t made it there yet.
Speakeasy ($EASY) cannabis is planning to go a ‘live’ resin route with their output, given they have some major tonnage coming in now….can we expect it on store shelves soon?
The answer is no, at least in any meaningful volume. There’s three reasons for this.
- A processor needs to insulate extraction columns to keep the temp low (higher OPEX)
- Hydrocarbon solvent is best practice
- Demand for these products are limited to consumers who know what ‘live’ actually means and are willing to pay for it
Maybe the Canadian consumer will develop a palate for it and demand will increase over time. I’ll say straight up: live resin is delicious. But the higher cost – and a limited number of extractors who can even do (or want to do) hydrocarbon extraction is very small. Combine that with an ultimate market share of single digit percentages…..
I expect it’ll remain an outlier category for years to come. You should expect to hear it a lot over the next while. It’s the ‘latest and greatest’ for some. To others….it’s always been there.
The preceding is the opinion of the author, and is in no way intended to be a recommendation to buy or sell any security or derivative.