Consumers are shifting towards edibles, extracts and capsules, in lieu of the traditional bowl or doobie. Yes, according to a recent USA Today story, more and more consumers in legalized states are, err, consuming cannabis. Counterintuitively, however, less pot flower is being consumed.

It’s an interesting but maybe not-so-surprising shift in consumer tastes. Between the effects that smoking can have on lungs, stronger extracts and concentrates, and more controlled/regulated doses available via edibles, there are more ways than ever to capture a high without having to roll a joint or pack a bowl. And the statistics bear it out, according to the USA Today article, Colorado and Oregon both have seen marked decreases. Colorado in particular has seen a dramatic drop in flower sales, from 67% of sales in 2014 (when the state went legal), to 44% in 2018. Meanwhile, the Golden State has seen a 3% decrease in flower sales across only the first quarter of 2018.

While we’re all eagerly awaiting the day when we can crack open a frosty THC non-beer, that may or may not have been delivered to us by Google or Amazon or Walmart, it’s important to bear a few things in mind for the short run. Primarily, it’s crucial to remember this: edibles and extracts, just like all other types of plant-based products, need to be checked and tested by state-approved labs. California-based plant-touching businesses (and consumers) are experiencing the growing pains/bottleneck of too few state-approved labs presently. So, while this is a trend that is certainly going to grow, it’s also one that will take place in fits and spurts as states further develop their guidelines and regulations, particularly for edibles.

That being said, investment and money site, the Motley Fool, brought up a very interesting point about what this consumer shift means for cannabis as a commodity and investments. Namely, that flower is a fungible commodity, and that packaged/rendered products have a higher margin for companies. The article goes on to highlight CannTrust of Canada, with the majority of their product going to renderers, as a poster boy for this shift. While we’re not anticipating some post-apocalyptic hellscape where only the super-rich enjoy the rare delicacy of  “pot flower” in a joint or Pax –while streaming the real life Hunger Games, natch– and the rest of us just get our government-issued CannaTablet;  it is still a significant shift in consumer behavior that may be worth keeping your eye on if you’re an investor.

Have questions about investing in the cannabis sector? Let us know: Facebook, Instagram, Email, Phone: 310.449.4528.