Some cannabis retailers in British Columbia have posited that the ephemeral presence of ingestible extracts on dispensary shelves, followed by their prompt removal, may have served to acquaint a greater number of consumers with cannabis oil capsules.
Regulatory Shifts Impacting High-THC Ingestible Extracts Market in BC
The market segment commonly referred to as ingestible extracts, or “edible extracts,” which are retailed with a THC concentration exceeding the standard 10mg per package limit set for traditional cannabis edibles, has seen a notable surge in popularity among certain consumer demographics over the preceding year in BC. The catalyst for this trend can be traced back to the strategic market entry by Organigram with their Edison Jolts, an offering of 10mg THC lozenges that are packaged with as many as 25 units per package, culminating in a total of 250mg THC, initially launched in the summer of 2021. This product debut was closely followed by an influx of similar products in 2022, including Aurora Glitches, among several others, that proffered comparably high THC content per package.
The ensuing periods witnessed a remarkable increase in the sales velocity of these high-THC-content products within the province of BC, continuing an upward trajectory through the successive financial quarters. This burgeoning trend was abruptly curtailed by Health Canada earlier in the current year, as the federal authority pronounced these products to violate the established federal regulations. In the nascent weeks of January 2023, Health Canada issued a formal notification to producers, underscoring their regulatory concerns. Subsequently, companies were mandated to terminate all sales and distribution activities by the deadline of May 31, 2023.
In anticipation of the regulatory enforcement, some retailers seized the opportunity to augment their inventories. Despite these measures, a multitude of stores have depleted their stocked supplies, leading to an observable scarcity of these products on the shelves. Reflective of these changes, the most recent quarterly report for Q2 2023 from British Columbia indicates a marked decline in sales figures for these previously sought-after cannabis products. The report lays bare the impacts of regulatory interventions on market dynamics and the availability of cannabis-related offerings to consumers within the province.
Shifting Cannabis Consumption Trends: Capsules and Oils Gain Traction in BC’s Retail Market
CertiCraft’s analysis reveals that while the abrupt absence of ingestible extracts from retail shelves may have been disconcerting for consumers, it inadvertently presented a window of opportunity for astute retailers. This interval has been strategically utilized to enlighten consumers about a parallel category of products that have been consistently available since the advent of cannabis legalization: namely, cannabis oils and their encapsulated counterparts, cannabis oil capsules.
The trajectory of cannabis capsules’ sales in British Columbia displayed a nominal downward trend as ingestibles gained momentum in the market. Nevertheless, this dip was substantially more pronounced in the second quarter of 2023. Interestingly, this period of decline for capsules was accompanied by a marginal uptick in the sales of cannabis oils, suggesting a possible correlation between the two product types.
Kayla DeFazio, who serves as the Assistant Manager at Spiritleaf located in Maple Ridge — a distinguished establishment known for its robust sales within the province — has observed this emerging pattern firsthand within her retail domain. She notes that the trend has often been influenced by the proactive recommendations made by herself and her fellow employees.
Drawing a parallel with the ingestible extracts, Ms. DeFazio elucidates that cannabis capsules are designed to deliver a substantial quantity of THC in each container. These capsules provide individual servings containing up to 10 mg of THC, which mirrors the dosage found in ingestible extracts, thus offering consumers a familiar potency. She cites a particularly well-received product available at their store, which comes in a variety of bottle sizes, offering ten, fifty, or even one hundred capsules, with each capsule consistently containing 10 mg of THC. This product, among others, stands as a testament to the sustained appeal of high-potency cannabis solutions, even as the market landscape continues to evolve.
“A lot of people really, truly think that it works best in a gummy. Maybe everyone else is finally catching on and realizing that is not the case.”
MIKE BABINS, EVERGREEN CANNABIS
Educating Consumers: Introducing Cannabis Capsules as Alternatives to Ingestible Extracts
Ms. DeFazio emphasizes that, notwithstanding the enduring presence of these cannabis capsules in the marketplace, the recent discourse surrounding the unavailability of ingestible extracts has inadvertently facilitated an introduction of these alternative products to a segment of consumers previously unacquainted with them. Often, patrons enter the establishment in search of the erstwhile available ingestible extracts, and it is during such interactions that the knowledgeable staff seize the opportunity to educate them about these comparable, yet distinct products.
“We’re earnestly endeavoring to curate superior alternatives for our clientele. A substantive fraction of them possess an acclimated tolerance to THC and unequivocally require a more potent dosage to meet their needs. Because we were no longer in a position to supply them with the ingestible extracts, our strategy pivoted towards guiding them towards other viable options,” Ms. DeFazio articulates.
She elaborates on consumer preferences by noting, “There is a discernible affinity amongst consumers towards edibles, such as gummies, which come with an assortment of flavors. However, a considerable number of these consumers also express a certain aversion to the superfluous sugar content that is often inherent in such products. When we introduced them to alternatives that not only presented a more advantageous price point but also a potentially healthier option, they found the transition to a new product much more palatable.”
Ms. DeFazio’s observations shed light on the nuanced preferences of cannabis consumers, which range from the desired potency of the product to ancillary attributes like flavor and health considerations. This nuanced consumer behavior has necessitated a dynamic approach by retailers, who must continuously adapt their product offerings and consumer engagement strategies to address the evolving needs and inclinations of their clientele.
“…a lot of people were also turned off by the excess sugar. So once we showed them that there was a better price point and something maybe a little bit healthier, they had an easier time moving on to something new.”
KAYLA DEFAZIO, SPIRITLEAF IN MAPLE RIDGE
Trevor Pewarchuk, who holds the position of District Manager for Trees Cannabis, overseeing operations across numerous establishments on Vancouver Island, corroborates the observation of a trend resonating through his store locations that parallels what has been witnessed by others in the industry.
Products that fall under the category of ingestible extracts, specifically the Edison Jolts and Aurora’s Glitches, garnered an “extraordinarily high level of consumer demand,” in the words of Mr. Pewarchuk. However, he remarks that these products experienced a swift depletion of stock following the directive from Health Canada, which mandated producers to halt the distribution of such items to retail businesses.
As a consequence of this supply gap, Mr. Pewarchuk has noted a bifurcation in consumer behavior. On one hand, a contingent of consumers has reverted to the purchase of conventional edibles or gummies. On the other hand, a discerning group of patrons has realized that cannabis oil capsules can offer a congruent effect to what they sought from ingestible extracts, sans the additional sugar content, and, notably, at a more economical price point.
“To those seeking the maximum permissible concentration of the active ingredient per individual dosage, we typically suggest exploring the options of oils or capsules, as these tend to represent the nearest substitute available for purchase,” Mr. Pewarchuk elucidates.
Nonetheless, he acknowledges that a majority of the customers who manifested an interest in the more robust potency products were, to begin with, consumers of edibles. In the current scenario, these individuals are adapting by simply procuring multiple packages of edibles or a greater quantity of cannabis-infused beverages to attain the desired effect.
“Some customers are indeed transitioning to oils,” he states, “but a significant number are opting to adjust their purchasing patterns, resorting to acquiring several units of edibles or various cannabis-infused drinks to achieve their sought-after results.”
“Generally, we would direct them in that case to an oil or a capsule option just because they tend to be the closest equivalent they can purchase with the max amount of active ingredient per dose.”
TREVOR PEWARCHUK, TREES CANNABIS
In the context of Vancouver’s pioneering licensed cannabis establishment, Evergreen Cannabis, proprietor Mike Babins shares his experience with the evolving customer dialogues on cannabis consumption choices since the emergence of edibles on the market towards the end of 2019 or the onset of 2020.
Babins recounts, “From the moment edibles were introduced into the marketplace, any client who approached us with a request for a substantial quantity, we’ve been forthright in suggesting an alternative. We’re certainly willing to meet their initial request, but we also propose the option of investing in a jar of capsules, which essentially provides the same experience. We then suggest that they could, if they so desire, acquire a packet of gummy bears from next door, purely for the confectionery aspect. This approach would result in a considerable financial saving for them.”
Furthermore, Babins observes that there is a persistent need for comprehensive consumer education regarding products such as cannabis oils and capsules. He encounters a prevalent belief among some consumers that the form of edibles inherently amplifies their efficacy.
He elaborates, “A substantial number of individuals are under the impression that the efficacy of cannabis is enhanced when consumed as a gummy. It seems that the tide is turning, and the wider public is beginning to recognize the fallacy of this assumption.”
“Perhaps we are reaching a point where the community is becoming more enlightened and is starting to appreciate that there are alternative, more potent THC-infused options within the edibles category. The more this understanding proliferates among the public, the more straightforward it becomes for us as purveyors to steer them in that direction and assist them in making an informed decision.”
Babins’ insights highlight a growing trend towards informed consumerism, where an increased awareness of product varieties and their effects can significantly influence purchasing decisions. This trend suggests a maturation of the market, where consumers are gradually becoming more knowledgeable and discerning about the intricacies of cannabis products and their uses.
