This how we’re empowering brands to thrive through innovation...
Dispensaries in Michigan are paying more than twice as much for CBN-infused edible products. Good thing too, because an average wholesale price of $2.84 per unit for non-CBN products is painful—and probably not profitable (for brands or retailers). Michigan is a particularly saturated market, but price compression is an issue in any market when saturation and stagnation set in. This isn’t unique to cannabis. It’s only a matter of time before hemp markets, including beverages, experience the same trend. Innovative products are crucial for revenue growth. Take the microbrewery industry as an example. They are constantly churning out new variations of IPAs, hazy’s, and whatever happens to be trending to stay relevant and keep consumers engaged and loyal. The slides below highlight the value CBN products add in other major markets facing price compression: ?? Michigan: CBN products command $6.60/unit, on average a delta of $3.59/unit ?? Oregon: CBN-infused products sell for $6.78/unit, $2.65 more per unit ?? Massachusetts: CBN products fetch a respectable wholesale price of $10.07/unit, a margin increase of $2.52/unit ??? Colorado: CBN-infused products wholesale for $8.70/unit, while non-CBN products sell for $6.81/unit Creating better products adds value at every level, increasing margins and driving sales velocity because all parties are benefiting: ?? Brands innovate new products that sell at higher prices and capture more margin. ?? Retailers are willing to pay more for a better offering that consumers value which increases ticket prices. ?? Consumers are happy to pay a little more for products that meet their needs. And if the product delivers the intended effects they will go back for more. As price compression intensifies, brands and dispensaries must focus on differentiating their product lineup and improving margins. The success of CBN in wholesale markets proves that consumers are ready for products with marketable benefits. Create win-win-win scenarios, and you avoid the race to the bottom.