Ancient Hashish Gets Vape Makeover to Lead Legal Cannabis Gains
(Bloomberg) -- Hashish, a marijuana product that’s gotten people stoned for centuries, has spawned a new generation of cannabis concentrates that are in such high demand they’re poised to become the most popular way for Americans to consume legal pot.
Dried marijuana flower buds account for the majority of sales in states where pot is legal, but concentrates are gaining ground fast, largely because of new vaping products, according to a report published Tuesday by industry consultants Arcview Market Research and BDS Analytics. Concentrate sales are set to catch flowers in five years, depending on the pace of state legalization efforts.
“It would be happening quicker, except there are so many limitations on it,” said Tom Adams, a BDS managing director who edited the report. “Lots of medical states allow flower only.”
Humans for hundreds of years have been compacting cannabis resin to make hash, which delivers a more potent dose of pot’s psychoactive ingredients. Modern versions, with names like shatter and wax, are made from resin extracted with solvents such as butane -- a more efficient process than the fine screens or manual agitation long used to make hash.
By far the most popular concentrates now are oils sold in small cartridges that fit into vaporizers, many of which resemble e-cigarettes. Vape products will account for nearly 60 percent of concentrate sales this year, according to the report.
Such products are not only growing fast, they’re more profitable for the industry than flowers, the report says.
Pot for concentrates is typically grown outdoors, a far cheaper method than indoor cultivation, and processing requires no trimming or curing, further reducing costs. Branded concentrates provide retailers with higher-profit margins than cannabis flowers. Consumers perceive vaping as healthier than smoking, and it also draws less attention, Adams said.
“Walking down the street and smoking a big, fat joint is not very discreet,” Adams said. “Taking a quiet hit on a vape pen is very discreet.”
In New Jersey, medical marijuana dispensaries last week began selling vape cartridges after the state health department ended a ban.
Overall concentrate sales will grow nearly 50 percent this year, accounting for $2.9 billion of the estimated $11 billion legal market, according to the report. Sales are forecast to catch up to the slower growing flower market by 2022, when both segments are forecast to have sales topping $8 billion. By then, total U.S. cannabis sales, including edibles and other products, are forecast to exceed $23 billion.
©2018 Bloomberg L.P.