As leisure markets mature, “house brands” start losing shares. What is the significance of branded cannabis flowers in this context? What macro trends are driving the development of the flower category? How does market segmentation affect this category and how do regulations affect state market share?
Cantor Fitzgerald Analyst Pablo Zuanic offered an industry report evaluating the performance of branded flower lines in key markets with a focus on Massachusetts.
House brands lose share in Massachusetts
Zuanic explained how private label shares vary from state to state. Private labels are the property of the retailer. In some cases, the retailer can also be the grower, and in other cases, the retailer can buy them from a grower who sells on a white label basis.
in Massachusetts, The private label share of flowers has increased from 90% in 2019 to 67% in 2022; Over the past two years, private label has grown from 73% in Colorado to 58% in flowers, 6% in California, and 16% in Michigan, where private label has a much smaller share of flowers.
“Private label share remains high in Massachusetts and Colorado, but trends are encouraging. That said the fragmentation in the flower portion (only four brands in MA have a share of 2% or more), Stock turnover as well as value shift are all of concern‘ said Zuanic.
As more stores have opened in the state, many of the owners don’t have their own farms (a capital-intensive endeavor), says Zuanic, “Brands are picking up retail trade.”
“The share of private label in MA is still high at almost 70% (in line with CO), but as the market has grown, so has the ‘wholesale brand’ market,” said Zuanic. According to official state data, total cannabis sales in Massachusetts in Q1 2020 were $195 million (11% branded wholesale share) and reached $437 million (31%) in Q2 2022.
“During this period, the wholesale brand market grew from $21 million to $135 million,” said Zuanic. “Ma’s…
