By Sheldon Smith
With 2020 marking two years of cannabis legalization, it’s been an up and down journey for many in the industry.
While facing challenges, it’s also had many moments worth celebrating, especially for Inner Spirit Holdings and its retail recreational cannabis brand Spiritleaf, as they recently celebrated two strong years of business, and have released some findings from the past two years.
“It’s been a bumpy journey to get to where we are today,” said Darren Bondar, Founder, Director & CEO of Inner Spirit Holdings. “At the end of the day, we’re pretty proud of what we have accomplished.”
As one of Canada’s largest cannabis retailers, making up five per cent of retail stores in the country with over 60 locations, Spiritleaf has looked at its own data and identified some trends that have emerged up since legalization.
Since 2019, Spiritleaf has not only doubled its number of stores, but the amount of transactions have more than doubled, growing by 109 per cent, suggesting a bump in new users and a potential increase in the frequency in which customers are visiting cannabis stores, even during a global pandemic.
“COVID has been a challenge for everybody. It’s not easy operating over 60 stores in a COVID environment, but we’re doing everything we can to keep people safe and are adhering to all health measures. We were fortunate to be deemed an essential service, which has led to a spike in our sales.”
Bondar mentioned the second year of legalization has been significant for the cannabis industry. The arrival of Cannabis 2.0 (edibles, vapes, beverages) has been a huge success, and with the introduction of new formats and products, shows no signs of slowing.
“The 2.0 rollout has been great. They’re a bit less expensive to purchase, but we’re seeing lots of units of beverages, chocolates, and gummies going out the door,” Bondar said.
Beverages are becoming increasingly popular, and more socially acceptable. They bring instant onset and people don’t have to wait like they do with edibles.
More and more people are comfortable with a cannabis product and beverage than alcohol. Spiritleaf’s most popular beverage is Deep Space, which contains 10 mg of THC.
Basket size fluctuates:
- Between October 2018 and January 2019 Spiritleaf shoppers were loading their baskets with around $52.38 worth of product.
- Between January 2019 and January 2020, the number of transactions rose but receipt totals lowered to $39.17.
- Over the last nine months, basket value increased to $44.62, as Cannabis 2.0 products arrived and COVID restrictions saw more customers stocking up.
- Dominating product popularity since October 2018 has been dried flower, and while it continues to take the top spot for store sales two years on, it has dipped from 81 per cent of Spiritleaf sales to 47 per cent, as edibles inched their way in with the introduction of Cannabis 2.0
- Edible cannabis formats and beverages took up three of Spiritleaf’s top 20 product spots in 2019 and currently account for six per cent of overall sales as of October 2020
- A firm favourite during the first year of legalization, cannabis oils have seen a decline in popularity, with sales shifting from 15 per cent to three when the need for DIY cooking dialed down
- As of May 2020, edibles equaled 27 per cent of total cannabis sales in Canada [Source: Health Canada and Statistics Canada].
- Market-wide, it’s dried flower, pre-rolls and vape pens are in the top three spots, with over $800+ million, $200+ million, and just under $100 million in sales respectively [Source: Headset].
- Edibles are the go-to choice for older customers (45+) who are first-time or relatively new cannabis users, while pre-rolls and dried flower have been firm favourites for younger, but more experienced customers.