As Massachusetts’ adult-use market continues to grow, operators are finding that consumers have a strong preference for strong cannabis, making it more difficult for cultivators in the wholesale market to move product with lower THC concentrations.
“Dispensaries don’t want anything under 20%,” said Dan Donahue, Massachusetts operations manager for Pharmacann, “Anything lower than that doesn’t move.”
In order to not be inundated with less-potent cannabis, Donahue said that Pharmacann, which sells about 70% of its Massachusetts supply wholesale, started offering discounts for the milder buds when retailers also bought their more-expensive, higher-concentration flower.
Vanessa Jean-Baptiste, who runs Legal Greens, a dispensary in Brockton, Massachusetts, said that when she opened last March she definitely saw the gaps in demand based on THC concentration.
“It was a learning process for us,” she said. “Most customers want the highest THC count, while others based purchases on their available funds.”
As a result of the shifting demand, Jean-Baptiste said that she adjusted which wholesalers she did business with so that her dispensary was not left saddled with lower-THC flower at a price point that customers were not willing to meet.
“Some vendors base their prices on their THC count while others just have set prices,” she said. “We try to deal with vendors who give discounts for their low THC count when we buy larger quantities of flower.”
Allowing for a wider range of prices has allowed Legal Greens to move all of their lower-THC product.
“Surprisingly, lower THC count flower sell at the same rate as higher THC count flower. At times the lower THC lever flower sells better than the highest THC levels,” said Jean-Baptiste.
Wes Ritchie, co-founder of Tree House Craft Cannabis in Dracut, Massachusetts, said that he has also noticed discerning tastes among consumers.
“Customers seem to be buying based on two factors; percentage of THC and price. That said, the types of flower that are more difficult to move are ones with under 20% THC and mid-priced flower around $50 per 3.5g,” said Ritchie. “We are also noticing a trend on the wholesale side. More mature data-driven wholesalers, meaning they have been in operation longer, seem to be adjusting their pricing based on THC content.”
Brandon Pollock, CEO and Co-founder of Theory Wellness said that he noticed the same trends in terms of demand being tied to THC levels.
“Customers are evolving with the marketplace and starting to refine their buying habits,” he said. “Most consumers are now weighing various factors into flower choices that they weren’t 18-months ago, like price, testing, and overall quality. THC, TAC, and terpenes percentages are starting to play a heavier role, and we’ve experienced that with our buying and selling in the wholesale market from both ends.”
Pollock argued that the changes in demand were a good thing for business, in that the highest-concentrated flower now has a higher price ceiling as diversity in product increases.
“This creates an opportunity for top-tier cultivators to differentiate their products and stand out,” said Pollock. “It’s no longer a game of selling every batch for a top-tier price. Consumers want to ensure they get the best value for legal cannabis. We sell plenty of lower testing flower but we price it appropriately.”
In general, Pollock said that the growing influence of consumers’ preference for stronger cannabis reflects a positive step in the growth of the state’s adult-use market.
“It’s a net positive as brands are held accountable for quality, and consumers have broader options,” he said. “The spectrum of different testing tiers impacts pricing, giving consumers a range of high value and lower value flower. Consumers now have more variety to choose from, and they’re getting picky and challenging us all to do better.”
