Data driven decisions are a business fundamental for most industries in the age of Google, yet good data can be hard to come by in the hemp industry. Sales data on a macro level is somewhat known, but if we want to understand how the emergence of CBN has impacted CBD sales, there is nowhere to go for that right now.
Luckily, thanks to companies like Headset we do have insight into the sales analytics from cannabis dispensaries. Since most legal cannabis states allow industrial hemp products as ingredients we have seen some of cannabis’ largest edible manufacturers launch CBN infused products. Initial adoption of CBN:THC products (with varying ratios) has exploded in the recreational cannabis markets with industry leading brands such as Wyld, Kiva, Grön and Cheeba Chews as the pioneers.
CBN is rapidly gaining market traction as consumers realize its potential benefits. As many have described, CBN functions like extra strength CBD with a pinch of THC, providing a different set of physiological responses as it interacts with the body’s endocannabinoid system. Primarily being marketed as a sleep aid, CBN has also shown benefit in providing relief from aches and pains. When paired with THC, CBN seems to reduce feelings of anxiousness and increase the sedative qualities, thus gaining efficacy as a beneficial sleep aid ingredient.
The recreational markets benefit from both a higher level of awareness amongst cannabis consumers and a retail customer service interaction that allows for greater product education and therefore a faster adoption of new products. This type of consumer education is more limited in the open market hemp retail as the sales channels have shifted away from CBD only stores to mainstream grocery, convenience and box stores. Online sales for hemp based products have grown significantly during COVID but struggles to educate consumers on the emerging minor cannabinoid market. While we believe a widespread adoption of CBN is on the horizon, the initial surge in demand will likely happen in the dispensary setting of recreational markets.
In order to provide a current snapshot of the CBN market, we have used available data from Headset* to track CBN sales over the last year across four mature recreational cannabis markets, California, Colorado, Oregon and Nevada.
Our main take-aways from this analysis is that the leading brands in these states are:
- Seeing significant sales growth across their CBN SKUs
- CBN SKUs are becoming their top selling products
- CBN SKUs are often capturing a higher per unit sales price
- Validating consumers demand for sleep aid alternatives
CBN is the number one selling edible in California
Kiva is California’s number one edible brand, and their number one selling product is the Camino Midnight Blueberry 5:1 (100mg THC: 20mg CBN). Being first to market has paid dividends for Kiva as this was the first of the products we analyzed to enter the market back in early 2020. This single SKU made up an astounding 17% of Kiva’s brand share in the last 180 days having produced an astounding $12 million in retail sales!
Going big on sleep with CBN
As most of the CBN products mentioned in this report are marketed as sleep aids, it is clear that this data reflects the consumer demand for sleep aid focused effects. A great example of this is Kikoko, a California brand with unique product offerings.
Kikoko has five SKUs dedicated to the sleep aid market and their sales numbers paint a clear picture of the real demand in this category. The Little Helper Sleep Mint is their number one selling SKU with over $587,000 in retail sales revenue since late August. What’s more impressive is that the sales of the five CBN based sleep products made at least 30% of Kikoko’s brand share in that same time period.
Oregon’s CBN sales soar
Oregon companies soon followed with the states’ two leading edible brands, Grön and Wyld, each launching multiple CBN SKUs in 2020. Grön initially launched a 1:1:1 (THC:CBD:CBN) in July followed by a second flavor in September. Impressively, these two products ranked #1 and #4 for Grön in Q4 representing 10% and 6% of sales in the quarter respectively. Wyld, the nation’s leading edible brand, launched their 1:1 (THC:CBN) Elderberry gummy in October which rocketed to be the company’s #4 best selling SKU in Q4 representing 11% of brand sales.
On a monthly basis, CBN edibles sales in Oregon grew from $419,000 in October to over $933,000 in January. Once Wyld jumped in, total sales for Q4 soared to $1.6 million representing QoQ growth of 549% compared to Q3. By the end of December the eight CBN SKUs on the market from Grön and Wyld accounted for an incredible 5.7% of the entire Q4 edible market.
Colorado and Nevada growth
During Q4, retail sales for the four CBN SKU’s we analysed in the Colorado market grew from $121,000 in October to over $431,000 in December. Again, the launch of Wyld’s Elderberry in October demonstrates their strength in what was a previously entrenched market. Total sales in Q4 were $858k representing 256% growth from Q3, before Wyld’s Elderberry launch.
Nevada’s market, the smallest in total revenue of the four states analyzed, and the last to have a CBN product on the shelves showed impressive sales growth for CBN products at 171% between October and December. Total retail sales for the quarter were $522k, with $240,000 of that in December. The four NV CBN sku’s accounted for 3.2% of the entire Q4 edible market.
CBN is raising the average ticket price
The second CBN product to enter the markets we analyzed was Cheeba Chews’ 2:1 (100mg THC:50mg CBN) Sleep Time Chocolate Taffy in Colorado, which launched in April 2020. This product is also the brand’s number one seller over the last 90 days, more importantly, it’s average sale price is $28.71,$9.45+ higher than their second best selling product in that time frame.
Kikoko’s Sleep Tincture (150mg CBN, 60mg THC) sold for an average price of $64.81, and captured 3% of brand share in the last 180 days.
New Market Entrants
New CBN products are hitting the market for example; Plus Products launched their CBN Relief (3mg CBD, 2mg CBN, 1mg THC) in California, and Green Revolution and Mr. Moxie’s breaking ground in Washington. Additionally, a few other brands whose data was not included in this report are California companies Level, Breez Mints, Kaneh and NUG, who appear to be the first to create a CBN infused pre-roll. As well as Mary’s Medicinals that may be the first company to launch a CBN vape pen as well as a CBN topical.
Conclusion
It appears relatively clear that CBN is likely the next big wave in the cannabinoid market. With growth trends remaining strong in January and February, we anticipate a surge of consumer demand as cannabis sales typically increase throughout Q2 and Q3. Given this backdrop, it is quite possible that CBN product sales (retail) will eclipse $100 mil in 2021 which would establish CBN as the most sought after minor cannabinoid.
