Marijuana Business Factbook 2019

187 © Copyright 2020, Marijuana Business Daily , a division of Anne Holland Ventures Inc. You may NOT copy this Factbook, or make public the data and facts contained herein, in part or in whole. For more copies or editorial permissions, contact CustomerService@MJBizDaily.com or call (720) 213-5992, ext. 1. Financial & Operational Data: Wholesale Cultivators | Chapter 3 MJBIZDAILY.COM CHART 3.06: Share Of Recreational Cannabis Sales By Year In Colorado & Washington State Source: Headset © 2019 Marijuana Business Daily, a division of Anne Holland Ventures Inc. All rights reserved. Share Of Recreational Cannabis Sales By Year In Colorado & Washington State 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Percent Of Total Sales 2015 2016 2017 2018 57% 65% 69% 70% 15% 9% 7% 6% 13% 13% 12% 10% 10% 8% 9% 10% 5% 4% 4% 4% Flower & Pre-Roll Vape Pens Concentrates Edibles All Other Categories 65 Several years in, marijuana flower is losing its dominance in the recreational market. Consumer demand is shifting to other product segments ― most notably concentrates and vape pens and, to a lesser degree, infused edibles. While competition and declining wholesale prices create conditions in which only the highest- quality flower makes it to the retail shelf ― these same forces, along with increasingly savvy concentrate consumers ― create a similar situation in which flower sold to the extract market must be of ever more superior quality. The shift in consumer demand also translates to more demand for flower produced for extract rather than for retail sale. But under current conditions, cultivators that choose to sell to the extract market may end up taking a loss, as flower for extract has less value than flower for retail. Cultivators looking to compete in the concentrates market must be cognizant of the price differential between retail and extract wholesale prices. Because flower sold in the extract market will necessarily command a lower price, outdoor production makes the most sense. Given current production costs, it would be exceedingly difficult for a cultivator to produce indoor flower for the extract market without taking a loss.