Liz Stahura, COO and co-founder of cannabinoid data provider BDSA, recently spoke with Benzinga about the effects of price compression on retail sales and other vital issues regarding the future of the cannabis industry.

Among the topics discussed:

The Future Is Solventless

Plummeting wholesale prices, tighter profit margins and oversaturated legal cannabis markets are affecting retail prices everywhere, driving down the average basket size. Across the board, cannabis customers are buying the same number of products at lower prices.

Faced with this challenge cannabis companies can either keep lowering their prices or upgrade their products by emphasizing their superior quality.

What then are the drivers of this premiumization? According to Stahura, the future of premiumization is tied to the evolution of solventless products.

“The attributes of solventless products make them very appealing to consumers given their unique flavor profile," Stahura says. "32% of adult-use consumers cite taste or flavor as the main driver of product choice. Natural ingredients are a top product choice driver for about 15% of adult-use consumers. In the edibles category in California, one of the leading solventless gummy brands is in the top ten best-selling gummy products in 2022, which is a pretty big statement because it's an incredibly competitive market.”

As the hype for live resin in terms of being a premium product winds down, the opportunity for premiumization as the opportunity for bottling price compression could well be solventless.

“We are seeing that solventless concentrates are holding their price,” Stahura tells Benzinga. “In California, in the second and third quarters of 2022, the average retail price of live resin dropped to about $20 a gram. Meanwhile, Rosin, which is primarily what you're going to see as solventless, was sitting at about $35 a gram. We're seeing that it is just an evolution towards the next hot product trend.”

Is Inflation Curving Consumption?

When we talk about inflation, we tend to hear the mantra: “the consumer wants the highest potency for the lowest price.” But what does consumer data say?

Is cannabis demand inelastic enough to support premiumization? Would retail sales increase if the quality of cannabis products is increased along with prices?

Stahura, who analyzes …

Full story available on Benzinga.com