At the recent Benzinga Cannabis Capital Conference in Chicago, industry experts gathered to explore the cannabis pre-roll market, provide vital advice for brands, and assist investors in evaluating their performance and strategies.
Panelists, including Brett Novey, CEO of PharmaCann Inc., Harrison Bard, co-founder of Custom Cones USA, Gabe Mendoza, EVP of Revenue at 4Front Ventures/Mission Dispensaries, and Jason Tueni, founder & CEO of Oak Canna & Wellness, delved into these topics.
Since the pandemic, pre-rolls emerged as the fastest-growing category in both the U.S. and Canada. Within this segment, the best-selling pre-rolls, are infused with terpenes. So what are the pros and cons of using terpenes in pre-rolls?
Terpenes, known for their aroma and flavor, ensure a consistent and enjoyable taste.
“You must be creative and enter the market with a unique selling proposition that sets you apart. For instance, when we ventured into the Washington market, we weren’t the first terpene-infused pre-roll, but we were the first to offer both terpene infusion and consistency,” Mendoza explained.
The infusion, often including hash or other compounds, boosts cannabis product potency. The panel stressed the need for a consistent consumer experience achieved through expertly homogenizing terpenes, distillate, keef, and cannabis flowers in pre-rolls.
Quality, variety, and freshness emerged as the key drivers of success in the pre-roll market. Consistency in product quality and availability was emphasized as a fundamental success factor.
It involves meeting the brand’s promises consistently, both in terms of the physical product and its availability, which in turn fosters and maintains client trust and loyalty.
“It’s not just about maintaining the quality of your products but also ensuring their availability. Diving too wide without enough product can jeopardize this consistency. Hence, you need to determine how to manage your limited availability effectively, whether by reaching a broad audience or focusing deeply,” Mendoza said.
Product Variety And Packaging
The panelists highlighted the importance of a diverse pre-roll product range, covering singles, multi-packs, infused pre-rolls, and premium options with filter tips. They also noted the rising demand for multi-packs, reflecting diverse consumer preferences.
In packaging, pop tops were mentioned as a cost-effective choice, while premium brands were advised to use class tubes for superior freshness.
The panelists recognized evolving market dynamics with a focus on diverse consumer segments and the demand for customized, premium options. Even details like the choice of tips, whether glass or ceramic and creatively designed, can set pre-rolls apart in the competitive landscape.
“Once you try a glass tip, you’ll never go back to using a paper tip. In my view, it’s a game-changer of that magnitude. It’s a game-changer for preserving the freshness of the flower,” Novey said.
“The paper cone remains the highest selling format, largely driven by value-conscious consumers,” Bard continued. “However, if you’re aiming to elevate your brand and set it apart, offering premium pre-rolls with glass or ceramic tips can make a significant difference.”
“The glass or ceramic tip isn’t just about aesthetics; it transforms the smoking experience. It slightly slows down the draw, resulting in less smoke and reduced harshness and throat impact,” Bard noted. “Additionally, these tips provide a noticeable cooling effect on your lips due to their higher heat transfer coefficient, offering a more comfortable and scientifically enhanced smoking experience.”
Proven Desing: Avoid Canoeing In Pre-Rolls
When designing and selling joints, a common challenge is preventing uneven burns, often referred to as canoeing. What’s the secret to preventing your pre-roll from canoeing?
“The way you grind the flower, the type of flower, the room’s humidity during grinding, and the flower’s humidity before being rolled, all matter. Some might argue these details don’t make a difference, but when you’ve sold 5 million pre-rolls in a year, they certainly do,” Tueni said. “We’ve learned and now offer a guaranteed canoe-free experience with our pre-rolls, something I believe no other company provides.”
Budtenders’ Role In Selling Pre-Rolls
The panelists stressed the vital role of budtenders in pre-roll brand success, given their role as the primary source of product guidance for consumers. To leverage budtenders effectively, key strategies were discussed.
First, brands must offer comprehensive product education to budtenders. This includes in-depth knowledge of product features, terpene profiles, and consumption methods.
Secondly, providing product samples to budtenders is crucial. This firsthand experience enables them to effectively communicate product qualities and benefits, bolstering their confidence and credibility when suggesting the brand’s pre-rolls.
Building and maintaining ongoing relationships with budtenders was also deemed essential. Regular dispensary visits and participation in industry events and workshops foster a sense of partnership and trust between brands and budtenders.
Pre-Rolls Cost Structure, Scale And Distribution
Understanding the cost structure and effective pricing were also considered crucial for success. Brands need to possess a clear understanding of the costs associated with producing and delivering one unit to dispensaries.
“Comprehending your cost structure is vital. Knowing the expenses involved in creating and delivering a single unit to the dispensary is crucial in this price-sensitive industry,” Mendoza said. “Whether you’re offering a high-quality or budget-friendly product, understanding pricing dynamics is essential.”
“To sum it up, by consistently delivering a customer-focused product, understanding your costs, and fostering creativity, you’ll establish a solid foundation for a successful brand,” Mendoza concluded.