Marijuana Business Factbook 2019

205 © 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. Chapter 4 Financial & Operational Data: Cannabis Product Manufacturers Sitting in the middle of the supply chain, cannabis product manufacturers process raw marijuana into an increasing number of forms, from high-THC resin for dabbing to micro-dosed chewing gum. Our definition of cannabis product manufacturers includes businesses that produce concentrates ― including dabbable concentrates and vape cartridges ― and those that make infused products such as edibles, beverages and topicals. CANNABIS PRODUCT MANUFACTURING TRENDS • Although still the most popular form of marijuana overall, raw flower continues to lose market share to manufactured cannabis products, specifically concentrates and vape pens. High- potency dabbable concentrates ― wax, shatter and resin ― have emerged as the preferred method of consumption for regular users seeking high THC content. Vape pens, on the other hand, typically deliver a small dosage of THC but are preferred by consumers seeking portability, discretion and/or an alternative to traditional smoking. Vape pens are the fastest-growing category of manufactured cannabis products, with their market share more than doubling between 2016 and 2018 in Colorado and Washington state. • Cannabis product manufacturing is an extremely competitive marketplace, with hundreds of brands fighting for market share in the concentrates and vape pens categories. Competition in these segments intensified significantly between 2016 and 2017, though the number of new brands tapered off between 2017 and 2018. Smaller categories ― such as capsules and beverages ― continue to be dominated by a small number of players. • Growth in the manufactured cannabis products space has drawn interest from mainstream companies and investors. In April 2019, vape manufacturer Pax Labs raised a record-breaking $420 million from both new and existing institutional investors , shattering the previous fundraising high of $250 million. Heavy hitters from the alcohol industry are entering the space, too, with Constellation Brands, Molson Coors and Heineken (via its subsidiary Lagunitas) acquiring stakes in cannabis companies and developing THC-infused beverages.