Market sales data: CA and CO grow in 4Q19; vape drops off

U.S. cannabis markets are a varied bunch. Sales growth at 10% in one market might be solid, but in another it could signal decline.

Our partnership with Headset gives us access to estimates of sales data broken down by state (California, Colorado, Nevada and Washington) and product, and that information provides a baseline for investors looking to understand trends in each market.

We have transformed the data to be useful and relevant to investors for market share, product exposure and trend analysis.

As companies start to report 4Q earnings, these market growth rates will provide context for those results to see if a company is gaining or losing share based on its geographic and product exposure. It can also point to opportunities for companies exposed to more rapidly growing markets or categories as well as risks for those exposed to slowing markets.

While some states report overall market data (see our coverage of Florida), Headset data – based on point-of-sale data – has a very short lag time that usually leads both government sources and company reports.

We will update this data monthly, providing insight into run-rate trends for the current quarter.

The information below includes data through the end of December 2019.

4Q19: CA adds $1 billion, CO reaccelerates, NV slows, WA only 6% 

Year-over-year sales growth in the fourth quarter for the four states monitored by Headset totaled 36%, a slight deceleration versus the 38% seen in the third quarter but still very strong.

Despite the implementation issues in California, that market posted 70% growth, reaching $745 million in the quarter – nearly as large as Colorado, Nevada and Washington state combined. Sales in California increased by $1 billion in 2019.

For a market commonly called “mature,” Colorado doesn’t look it with an annual growth rate of 18% in the 4Q19.

That should bode well for Medicine Man Technologies, which is consolidating the Colorado market after a legal change allowing outside capital, and Columbia Care’s pending acquisition of The Green Solution, which guided to 19% revenue growth in 2020.

Nevada continues to grow at double digits, though the rate slowed to 23% in the fourth quarter. Planet 13’s roughly 50% growth in November and December outpaced the rest of the market, and the company’s $16 million of 4Q19 revenue market about 10% market share from a single store. Tryke, which Cresco is planning to acquire, had $59 million of revenue in Nevada in 2018 (the latest data available), giving it 12% market share in Nevada, half from Reef Dispensaries’ lone Las Vegas strip location.

In contrast, Washington state appears to be the most mature market with only 6% growth.

Y/Y Sales Growth 1Q19 2Q19 3Q19   4Q19
California 71% 59% 73% 70%
Colorado 10% 15% 22% 18%
Washington 6% 8% 12% 6%
Nevada 32% 31% 26% 23%
CA+CO+NV+WA 31% 31% 38% 36%
Sales 4Q18 1Q19 2Q19 3Q19   4Q19
California  $         439  $            491  $       568  $       672  $       745
Colorado  $         304  $            309  $       344  $       405  $       360
Washington state  $         260  $            255  $       271  $       298  $       277
Nevada  $         134  $            148  $       162  $       162  $       166
CA+CO+NV+WA  $     1,138  $         1,203  $    1,345  $    1,537  $    1,548

Vape crisis drives flower, pre-roll and edibles share shift

The impact of the vape crisis can clearly be seen in the shift in share from vape to flower, edibles and pre-rolls.

These segments all grew faster than the overall market in the fourth quarter, while vapor pens, topicals, capsules, concentrates and tinctures underperformed.

Product Share 4Q18 1Q19 2Q19 3Q19   4Q19
Flower 42% 41% 42% 43% 44%
Vapor pens 23% 24% 24% 23% 19%
Edibles 11% 11% 11% 11% 12%
Pre-roll 8% 8% 9% 9% 10%
Concentrates 10% 10% 9% 8% 9%
Tincture & sublinguals 3% 3% 2% 2% 2%
Topicals 2% 2% 2% 2% 2%
Beverages 1% 1% 1% 1% 1%
Capsules 1% 1% 1% 1% 1%
Y/Y % Change 1Q19 2Q19 3Q19   4Q19
Flower 11% 22% 35% 42%
Vapor pens 76% 55% 46% 14%
Edibles 31% 21% 34% 55%
Pre-roll 58% 58% 78% 69%
Concentrates 15% 13% 22% 24%
Tincture & sublinguals 79% 31% 18% 25%
Topicals 66% 30% 19% 16%
Beverages 39% 32% 33% 44%
Capsules 33% 9% -3% 0%
CA+CO+NV+WA 31% 31% 38% 36%

If you have a more specific question about these markets than what we addressed here, email us at [email protected].