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Headset 2018
ANALYSIS OF A MATURE MARKET
WA 2017 YEAR-END-REVIEW
3 Years of Sales
Growth slowing but not stopped
What will California or Canada be 3 yrs on
Cannabis after the converts have been converted
Headset 2018
WHAT IS HEADSET?
The data layer for the cannabis industry
Headset 2018
AN INTERCONNECTED SUITE OF PRODUCTS
Operational Intelligence
Intuitive visualizations and reporting enabling retailers to better understand
operations and drive quick decisions, saving time and money.
Market Intelligence
Highlighting market trends so operators can better understand the competitive
landscape, discover opportunity, and keep ahead of new products
introductions.
Supply Chain Intelligence
Supply chain optimizations through data that enables a collaborative
relationship between supplier, distributor and retailer through real-time data
sharing
Headset 2018
WHAT HAVE WE LEARNED
Sales Growth Patterns
Category Sales
Pricing Stablization
Purchasing Habits
Retail Success Drivers
Headset 2018
2017 Growth Rates Slowing After April
Not ceding any gains, just slower pace of growth
Both years slow growth rate Jan/Feb (Holiday)
STEADY GROWTH, FEWER SPIKES
Patterns emerging
Headset 2018
CATEGORY SALES TRENDS
Flower remaining dominant, but emerging runner-ups
Understanding category trends gives us insight into consumer preferences
Headset 2018
Flower market share declined 2.5%
Smaller drop than 2015 to 2016 (8.5%)
Flower slightly more popular in rural stores
WHERE HAVE THE FLOWERS GONE
Slow decline of flower sales
Headset 2018
Flower has lion-share of market, but slowest growth at 3%
Vapor pens led at 33% growth
Edibles lowest reduction in growth, dropping only 25%
CATEGORY SALES GROWTH VS 2016
Flower sales slowest grower
Headset 2018
Popular categories have more new products: Concentrates, Flower, Pre-Roll, Vapor Pens
Edibles lowest percentage new products to sales, saturated market
FADING NOVELTY, NEW OPPORTUNITY
Popularity means more products
Headset 2018
Better retailer adoption of emerging categories
AIP settling in
AIP price gains in Flower / Tinctures & Sublinguals
Technology driven (vapor pens) could see further drops
WORKING OUT THE AVERAGES
Pricing stabilizing across the board
Headset 2018
Average basket price fallen slightly
Average Item Price Falling
Consumers buying 10% more products
BASKET ANALYSIS
Basket representative of a single transaction
Headset 2018
Flower leader of single category baskets
Beverages frequently bought with other products
Edibles, capsules and pre-rolls with low priced items
show highest number of items per basket
83% of baskets contained 1 item
BASKET BUDDIES
Basket trends and patterns
Headset 2018
BASKET BUDDIES (CONTD)
Basket trends and patterns
Headset 2018
70% of stores carrying 60 or more brands vs. 2015 7%
BRAND EXPANSION & ADOPTION
More retailers carrying more brands
Headset 2018
Over 44% of stores performed more than 7,500
transactions per month, up from 34% in 2015
More products = more reasons to come back
2015 1% > 1000 products
2017 11% > 1400 products
PRODUCT DIVERSIFICATION
Brand diversity largest for 2017
Headset 2018
2.5x increase in number of products per brand
Average number of products per brand 140 vs. 63 in 2015
MORE BRANDS MORE PRODUCTS
A diversification machine
Headset 2018
Biggest churn in ‘strain’ based products
More product introductions means more discontinuations
PRODUCTS PUT TO PASTURE
Product discontinuation
Headset 2018
2017 20.7% of market to top 10 brands
9.5% increase vs. 2016
40% of sales brands > 4 categories
8% of sales brands = 1 category
TOP BRANDS TAKE LION’S SHARE
2017 was great for bigger brands
Headset 2018
Millennials account for 50% of market
Gen X 34%
Baby Boomers 16%
Male to Female Ratio: 2:1
WHO’S BUYING ALL THAT WEED?
Millennial males big drivers
Headset 2018
Millennials account for 66% of concentrates
Topicals and Tinctures to Baby Boomers @ 35%
AND HOW ARE THEY BUYING?
Younger audience likes stronger stuff
Headset 2018
THE OUTLOOK IS BRIGHT
2018 and on great for emerging markets
Industry ballooning with every new state that legalizes
Big winners on retail were stores who improved
selection
Brand competition in established markets is the new
narrative
Brands with more categories and products more
successful. Get customers, give new products
Vapor pens rising star growth
CY SCOTT of HEADSET at REVEL: CANNABIS + THE CONSUMER

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CY SCOTT of HEADSET at REVEL: CANNABIS + THE CONSUMER

  • 1.
  • 2. Headset 2018 ANALYSIS OF A MATURE MARKET WA 2017 YEAR-END-REVIEW 3 Years of Sales Growth slowing but not stopped What will California or Canada be 3 yrs on Cannabis after the converts have been converted
  • 3. Headset 2018 WHAT IS HEADSET? The data layer for the cannabis industry
  • 4. Headset 2018 AN INTERCONNECTED SUITE OF PRODUCTS Operational Intelligence Intuitive visualizations and reporting enabling retailers to better understand operations and drive quick decisions, saving time and money. Market Intelligence Highlighting market trends so operators can better understand the competitive landscape, discover opportunity, and keep ahead of new products introductions. Supply Chain Intelligence Supply chain optimizations through data that enables a collaborative relationship between supplier, distributor and retailer through real-time data sharing
  • 5. Headset 2018 WHAT HAVE WE LEARNED Sales Growth Patterns Category Sales Pricing Stablization Purchasing Habits Retail Success Drivers
  • 6. Headset 2018 2017 Growth Rates Slowing After April Not ceding any gains, just slower pace of growth Both years slow growth rate Jan/Feb (Holiday) STEADY GROWTH, FEWER SPIKES Patterns emerging
  • 7. Headset 2018 CATEGORY SALES TRENDS Flower remaining dominant, but emerging runner-ups Understanding category trends gives us insight into consumer preferences
  • 8. Headset 2018 Flower market share declined 2.5% Smaller drop than 2015 to 2016 (8.5%) Flower slightly more popular in rural stores WHERE HAVE THE FLOWERS GONE Slow decline of flower sales
  • 9. Headset 2018 Flower has lion-share of market, but slowest growth at 3% Vapor pens led at 33% growth Edibles lowest reduction in growth, dropping only 25% CATEGORY SALES GROWTH VS 2016 Flower sales slowest grower
  • 10. Headset 2018 Popular categories have more new products: Concentrates, Flower, Pre-Roll, Vapor Pens Edibles lowest percentage new products to sales, saturated market FADING NOVELTY, NEW OPPORTUNITY Popularity means more products
  • 11. Headset 2018 Better retailer adoption of emerging categories AIP settling in AIP price gains in Flower / Tinctures & Sublinguals Technology driven (vapor pens) could see further drops WORKING OUT THE AVERAGES Pricing stabilizing across the board
  • 12. Headset 2018 Average basket price fallen slightly Average Item Price Falling Consumers buying 10% more products BASKET ANALYSIS Basket representative of a single transaction
  • 13. Headset 2018 Flower leader of single category baskets Beverages frequently bought with other products Edibles, capsules and pre-rolls with low priced items show highest number of items per basket 83% of baskets contained 1 item BASKET BUDDIES Basket trends and patterns
  • 14. Headset 2018 BASKET BUDDIES (CONTD) Basket trends and patterns
  • 15. Headset 2018 70% of stores carrying 60 or more brands vs. 2015 7% BRAND EXPANSION & ADOPTION More retailers carrying more brands
  • 16. Headset 2018 Over 44% of stores performed more than 7,500 transactions per month, up from 34% in 2015 More products = more reasons to come back 2015 1% > 1000 products 2017 11% > 1400 products PRODUCT DIVERSIFICATION Brand diversity largest for 2017
  • 17. Headset 2018 2.5x increase in number of products per brand Average number of products per brand 140 vs. 63 in 2015 MORE BRANDS MORE PRODUCTS A diversification machine
  • 18. Headset 2018 Biggest churn in ‘strain’ based products More product introductions means more discontinuations PRODUCTS PUT TO PASTURE Product discontinuation
  • 19. Headset 2018 2017 20.7% of market to top 10 brands 9.5% increase vs. 2016 40% of sales brands > 4 categories 8% of sales brands = 1 category TOP BRANDS TAKE LION’S SHARE 2017 was great for bigger brands
  • 20. Headset 2018 Millennials account for 50% of market Gen X 34% Baby Boomers 16% Male to Female Ratio: 2:1 WHO’S BUYING ALL THAT WEED? Millennial males big drivers
  • 21. Headset 2018 Millennials account for 66% of concentrates Topicals and Tinctures to Baby Boomers @ 35% AND HOW ARE THEY BUYING? Younger audience likes stronger stuff
  • 22. Headset 2018 THE OUTLOOK IS BRIGHT 2018 and on great for emerging markets Industry ballooning with every new state that legalizes Big winners on retail were stores who improved selection Brand competition in established markets is the new narrative Brands with more categories and products more successful. Get customers, give new products Vapor pens rising star growth