The cannabis industry is in a transition phase. With wholesale prices at all-time lows, some of the most developed legal cannabis markets are seeing dollar sales stagnate or fall. BDSA’s Basket Analytics are here for retailers who want to stay competitive by optimizing shelf space, uncovering which products can drive the largest basket sizes, and learning how to position smaller categories to drive cross-selling. Here are some of our top takeaways from our California data. For more information, visit BDSA.com.
Even with the proliferation of newer form factors, flower still sees the highest basket penetration
It should come as no surprise that flower sees the highest basket penetration in California, given that it continues to make up ~35 percent of dollar sales by category in the state. In Q2 2022, ~40 percent of baskets in California contained flower, with concentrates coming in second for the highest basket penetration at ~35 percent. Basket analytics also show that baskets with flower are less likely to contain other product categories, with ~55 percent of baskets with flower only containing flower, compared to ~40 percent of baskets with edibles that contained only edibles.
Concentrates beat out flower to bring the largest basket sizes
Our data from spring 2022 shows that inhalables like concentrates and flower are the most used cannabis form factors, with ~70 percent of consumers in adult-use states reporting that they’ve inhaled in the past six months. But when looking at the California market in Q2 2022, baskets with concentrates had an average basket size of ~$80, the highest of any subcategory. While flower saw higher average retail prices than concentrates during this period, cross-shopping by concentrate buyers pushed the category to have the highest basket size, with our basket category analysis showing that ~70 percent of concentrate baskets held more than one item, compared to ~65 percent of flower baskets that held more than one item.
Don’t overlook sublinguals and topicals: Smaller categories drive cross-selling across markets
With the two subcategories making up ~2 percent of dollar sales cumulatively across mature markets, sublinguals and topicals categories are smaller than others, but still valuable. These two subcategories may not be driving the highest volume of sales in legal cannabis, but BDSA Basket Analytics show that they can be leveraged at retail to increase total sales volume by offering cross-promotions with other popular categories like inhalables or edibles. Basket analytics data from Q2 2022 in California show that only 18 percent of sublingual baskets and 16 percent of topical baskets contained a single item, while both categories show that ~75 percent of baskets contain multiple items from multiple categories. This shows that these subcategories have huge potential for cross-promotion, translating into higher average basket sizes and increased volume.