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Ending Marijuana Prohibition Marijuana Business News

The Cannabis Industry Has Quickly Become The Most Innovative In The Country

Boulder, Colorado — The cannabis boom is boosting more than dispensary traffic, grower income and state tax receipts — it also is hatching new cannabis brands at an intense pace.

The twelve months ending May 2016, for example, have seen the emergence of 93 new companies developing products in the concentrates and edibles subcategories of the cannabis industry, according to a BDS Analytics review of the Colorado cannabis marketplace. These include companies launching new edibles products, like lozenges and beverages, and companies seeking commercial success in the busy concentrates subcategory, which includes products like pre-filled vaporizer cartridges and different styles of cannabis concentrates.

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“Most of the members of our team worked in a variety of established industries before pivoting to cannabis, and all of us are astounded by the rate and the variety of corporate innovation in this industry — none of us has experienced anything like it. The boom seems unprecedented,” said BDS Analytics founder and CEO Roy Bingham. “This must be the most innovative industry in America today.”

The concentrates industry, which saw Colorado sales of $111 million between January and May of 2016, grew by 114 percent compared to the same time period in 2015; it now represents 23.5 percent of the total cannabis market. Within this fastest-growing subcategory of the cannabis industry, 103 different brands recorded sales in YTD May 2016. The top 10 companies had sales of $50 million for a 45-percent share of the market, and the next 10 captured a further 11 percent. Of those 103 brands, more than 50 percent — a staggering 53 companies — had no sales in the same time period in 2015. These newcomers chalked-up sales of nearly $15 million, or 13 percent of the total market, since January.

The edibles marketplace since January has seen 99 different brands clocking sales at Colorado dispensaries. Of them, the top 10 held 71 percent of market share and the top 20 accounted for 87 percent. Nearly half of the brands — 45 — doing business in Colorado this year are brand new, with zero sales during the same period the prior year. Among the new brands, three stand out with sales of nearly $1 million each in just the first five months of 2016: Leafs by Snoop, Americanna and Stratos. The other 42 newcomers were much smaller, with average consumer sales of $22,000 over five months.

All of this commercial ferment is bubbling within the context of the overall industry’s rapid growth. In Colorado last year, consumer sales were $996 million (up 42 percent from the year before). During the first five months of 2016, consumers spent $486 million in cannabis dispensaries, a boost of 36 percent over the same period in 2015.

“This is an industry packed with entrepreneurs and innovators,” said Bingham. “Most other industries support large companies that spawn varieties of brands under the corporate umbrella. But most Colorado cannabis companies are stand-alone, meaning most of this commercial activity is the result of startups. It is thrilling.”

For more information, visit BDS Analytics