Pre-Rolls - A Rapidly Growing Sector in the Cannabis Industry

The humble pre-roll. 

For many of us, the first time we smoked was by someone handing us a freshly lit joint. Not much about the joint has changed since then, except that most of us in the cannabis industry have begun labeling them as pre-rolls. The pre-roll's market segment has typically been seen as one of the least dynamic sectors in the industry, as edibles and concentrates have been adding hundreds of new products every quarter. Pre-Rolls seem stale in comparison and yet CEO of Cannabis Royalties and Holdings Marc Lustig has called the pre-roll category "One of the fastest growing, most sizable market opportunities." Why is that?

Pre-olls Overall

The data speaks for itself. The above chart from a 2016 Frontier Analytics report showcases the total market share of each category of product during 2016. In 2016 alone, Pre-rolls had a 45% monthly growth rate, shattering the 14% monthly growth of edibles and the 17% of concentrates.

The growth in individual states has been nothing but outstanding. In Q4 2017, Oregon hit 44% Year-Over-Year growth, while Washington did the same in Q3 2017. In California, Pre-Roll sales grew 30.9% between Q2 2017 and Q4 2017

This tremendous growth has been occurring despite the fact that prices are dropping dramatically in most states. So while the per unit revenue has been dropping, the gross profitability of the sector has been skyrocketing.

Seasonality of Pre-Roll

Pre-rolls are also a seasonal product with a large lift during the warmer months, or May through Oct. This is likely because joints are a convenient and disposable way to consume your flower on day trips, a much more prominent activity when the weather is pleasant. You can see this in the chart above with the slight dip in sales during the post-summer months. Despite their seasonality, pre-rolls seemed to stagnate during the winter rather than dip back to their Q1 data, signalling sustainable growth in the market.

Infused Pre-Roll Joints

A great growth category for joints has been the infused pre-roll. Many states have seen this subset of pre-roll grow from less than 1% of the pre-roll market to over 10-15% of the market. During Q3 2017, Washington saw 103% YoY growth. Colorado experienced 193% YoY growth. Oregon saw the largest YoY growth with Q4 2017 clocking in at an incredible 587%. As the price for pre-rolls has fallen due to the lower flower prices, pre-roll companies are focusing on differentiation in order to have their pre-rolls stand out in dispensaries. This has been achieved by adding oil to increase cannibinoid potency and adding kief to the outside to create a visually unique pre-roll.  

Custom Branded Pre-Roll Cones

Custom Pre-rolled Cones are a relatively new phenomenon to the industry. As brands have expanded to multiple states, the need for consistent branding has grown. The simplest way to reinforce your brand is to customize the filter tip of your pre-roll. This way your branding is reinforced even after the pre-roll is taken out of the packaging.

Custom Cones USA has consistently been the #1 provider of custom  branded pre-rolled cones. We offer custom branded cones in all feasible sizes, a multitude of paper types, and with minimum order quantities as low as 10,000 cones. We walk you through every step of the process to make sure that you get exceptional pre-roll cones that are sure to wow consumers. For more information about how to get started on your custom pre-rolled cones, reach out to us or fill out the form through the link.

Hempwrap Blunt Cones 

We recently launched our brand-new product, the Hempwrap Blunt Cones. Differentiate your pre-roll with a totally new type of pre-rolled cone! Similar to a blunt, check out our hemp cone buyers guide to learn more about our new Hemp Cones. For more information about wholesale hemp cones, please contact us.