As consumer preferences shift toward convenience and ready-to-use products, pre-rolled joints have evolved from a niche offering to a staple on retail shelves and are emerging as one of the fastest-growing segments of the cannabis industry.
Between June 2023 and June 2024, pre-rolls experienced the biggest increase in sales revenue among all categories, jumping 11.89%, according to a recent study.
Pre-rolls accounted for more than $4.1 billion in sales and sold over 394 million units during that time frame, the study shows.
The study was conducted by Renton, Washington-based pre-roll packaging and manufacturing company Custom Cones USA and Seattle-headquartered cannabis industry analytics firm Headset.
“Quality has continued to increase, and prices continue to drop,” said Harrison Bard, co-founder and CEO of Custom Cones USA and DaySavers.
Adam Coates, chief revenue officer of Calgary, Alberta-based Decibel Cannabis Co., maker of Canada’s No. 1-selling pre-roll brand, General Admission, attributed the rising popularity of pre-rolls to consumers looking for instant gratification.
“Convenience formats are starting to take hold,” Coates said.
“That’s why you’re seeing the growth of pre-rolls, but you’re also seeing it in other categories like all-in-one vapes.”
Infused pre-rolls
Infused joints, which became the top-selling pre-roll category in the United States last year, have maintained an average 43.4% share of the segment in the markets Headset tracks.
Infused pre-rolls hit 44.4% market share in the first half of 2024, suggesting a preference for premium goods.
Sales of infused pre-rolls reached more than $1.75 billion in 2023 and the first half of 2024, according to the Custom Cones USA study, overtaking hybrid and single-strain pre-rolls, which saw $1.64 billion in sales during that time.
Sales of General Admission infused pre-rolls took off in 2022, after Health Canada clarified the language in its regulations, Coates said.
The previous interpretation was that you couldn’t combine two classes of cannabis – dried flower and extracts, for example – to create one product, which meant infused pre-rolls were not permitted.
“Our biggest product line – and what put us in the leader position – is distillate-infused pre-rolls,” Coates said.
“We’d seen the success of them in U.S. markets like Colorado, California and Oregon.
“High potency pre-rolls with added terpenes was in line with what the consumer was looking for.”
Jeeter CEO Sebastian Solano said that before the California-based pre-roll brand enters a new market, non-infused pre-rolls tend to dominate with 70%-90% of sales.
But “once Jeeter enters the market, infused pre-rolls increase,” Solano said, “and in some markets, it becomes 70%.”
Terpenes, cannabinoids and potency
Custom Cones USA’s Bard said consumer preferences vary, although most are looking for the most potent pre-rolls they can get – a complaint among budtenders and others educating the public about marijuana.
“Potency is not the end-all-be-all,” Bard said.
“It’s one of many factors to consider.”
Freshness, terpene content and which cannabinoids are in the product are also important, Bard said, especially for people who have anxiety.
Still, some consumers consider price above all else, and that’s where companies such as Michigan-based Dragonfly shine.
“As states open up and prices come down, good cannabis becomes more accessible,” said Ching Ho, founder of Dragonfly, which says it supplies 90% of Michigan’s wholesale pre-roll market.
“What we’re known for is we move a whole lot of pre-rolls: We move more pre-rolls in one month in Michigan than the entirety of the New York market in a year,” Ho said.
Dragonfly is poised to expand into the New York market, he added.
“We offer a high-value product, and we’re among the cheapest in the market,” Ho said.
“Most consumers want the best combination of price and THC.”
Non-infused Dragonfly pre-rolls sell for $1, while the company gets $3 per infused joint.
Ho said the company can afford to sell its pre-rolls at low prices because it produces its own marijuana.
“It’s kind of like Costco rotisserie chickens,” Ho said, referring to the $4.99 birds the warehouse club offers its members.
“They own their own factory – otherwise, there’s no way they could do that.”
Multipack pre-rolls
Pre-packaged containers of pre-rolls that come in quantities of two or more also are gaining popularity because they’re economical and convenient both for manufacturers, which save on packaging and labor costs, and consumers, who save by bundling multiple joints into a single purchase.
Multipack sales made up 27.7% of the pre-roll market in 2018, a share that skyrocketed to nearly half of the pre-roll market as of June, according to the Custom Cones USA-Headset study.
Multipack revenue increased 43% in 18 months, rising from $89.1 million in January 2023 to $127.4 million in June.
“Joints used to be an add-on item,” Bard said.
“Now consumers are going and solely buying pre-rolls.”
Multipacks demonstrate that consumers have brand loyalty, and people will smoke the same thing for the whole week, Bard said.
Some brands offer multipacks in a variety of strains or with different intended effects.
While 1-gram pre-rolls continue to be the most popular product, quarter-gram or “dog-walker” joints are gaining in popularity.
New cannabis users
Pre-rolls are the third-biggest category behind flower and vape pens, which both saw modest gains of less than 3.5%, according to the study.
Because pre-rolls are more convenient to consume than flower, which must be ground and rolled into a joint or smoked in another device, the market share of pre-rolls is likely to continue increasing, Coates said.
Pre-rolls also are more appealing to new consumers who haven’t used marijuana in the past but are open to trying it.
“Buying flower and trying to break it up and roll a joint is not very accessible,” Jeeter’s Solano said.
“Connoisseurs will always love to see the flower they’re smoking, and they enjoy that process.”
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Evolving pre-rolls market
In the early days of marijuana legalization, consumers steered clear of pre-rolls because of the low-quality marijuana used to fill them.
But as the quality of pre-roll contents has improved, consumers’ focus has turned to freshness, Bard said.
Although paper and cardboard packaging is eco-friendly, it’s increasingly being replaced with containers that prevent the cannabis from drying out.
Bard said manufacturers are starting to use humidors to preserve freshness, and he expects them to become a mainstay in frequent cannabis consumers’ homes as well.
Humidors are widely used to preserve freshness in cigars, but those used for marijuana are configured differently.
“Cigar humidors have angled shelves, so the cigars are nicely displayed, but in cannabis, you want flat shelves,” Bard said, adding that Custom Cones USA recently started selling humidors designed for pre-rolls.
Bard also expects manufacturers to start putting “best-by” dates on packages and taking back pre-rolls that have passed the date or selling them at discount marijuana stores.
The demand for freshness also will force pre-roll companies to do a better job of supply chain and demand forecasting, Bard said.
A company might produce thousands of pre-rolls per day but not sell them that quickly as the industry gets more competitive.
“Cannabis isn’t as dangerous to consumers as gas station sushi, but customer preferences are high and competition is high,” Bard said.
“If companies guarantee that items are produced on a certain day and will take (products) back after a certain amount of time, everybody is going to want to buy that brand.”
Margaret Jackson can be reached at margaret.jackson@mjbizdaily.com.