Pre-Rolls: Fastest Growing Segment in Cannabis Industry

Pre-Rolled Joints Surge as a Top Cannabis Market Segment Amid Shifting Consumer Preferences

As consumer preferences continue to shift toward convenience and ready-to-use products, pre-rolled joints have rapidly evolved from a niche offering to a staple on retail shelves. Now, they are emerging as one of the fastest-growing segments within the cannabis industry.

A Significant Increase in Sales Revenue

Between June 2023 and June 2024, pre-rolls experienced the most significant increase in sales revenue among all cannabis product categories, with a jump of 11.89%, according to a study by Renton, Washington-based Custom Cones USA and Seattle-headquartered cannabis industry analytics firm Headset. During this period, pre-rolls accounted for more than $4.1 billion in sales, with over 394 million units sold, underscoring their growing popularity.

The Rise of Infused Pre-Rolls

One of the most notable trends within the pre-roll market is the increasing demand for infused pre-rolls, which have become the top-selling category in the United States. Infused pre-rolls, which contain additional cannabis extracts like distillates or terpenes, maintained an average 43.4% market share in the segments tracked by Headset. By the first half of 2024, this share had risen to 44.4%, reflecting a strong consumer preference for premium cannabis products.

Sales of infused pre-rolls exceeded $1.75 billion between 2023 and mid-2024, surpassing the $1.64 billion in sales recorded for hybrid and single-strain pre-rolls. Adam Coates, Chief Revenue Officer of Calgary-based Decibel Cannabis Co., attributes the rising popularity of infused pre-rolls to consumer demand for high-potency products that deliver instant gratification.

Evolving Consumer Preferences

Harrison Bard, co-founder and CEO of Custom Cones USA and DaySavers, notes that consumer expectations have shifted significantly as the pre-roll market has matured. While potency remains a key consideration for many buyers, other factors such as freshness, terpene content, and specific cannabinoid profiles are becoming increasingly important, particularly for consumers seeking relief from conditions like anxiety.

Price also plays a crucial role in consumer choices, with some companies like Michigan-based Dragonfly gaining a competitive edge by offering high-quality, low-cost pre-rolls. Dragonfly, which dominates Michigan’s wholesale pre-roll market, sells non-infused pre-rolls for as low as $1 and infused joints for $3, leveraging its ability to produce its own cannabis to keep prices down.

The Growing Popularity of Multipack Pre-Rolls

Multipack pre-rolls, which offer consumers multiple joints in a single purchase, are also gaining traction due to their convenience and cost-effectiveness. These pre-packaged containers have become increasingly popular, with multipack sales making up nearly half of the pre-roll market by June 2024, up from 27.7% in 2018. Revenue from multipack sales increased by 43% between January 2023 and June 2024, rising from $89.1 million to $127.4 million.

Multipacks also reflect strong brand loyalty among consumers, with many opting to purchase multiple pre-rolls of the same strain or product type to last throughout the week. This trend suggests that consumers are not only seeking convenience but are also becoming more consistent in their cannabis preferences.

Attracting New Cannabis Users

Pre-rolls have established themselves as the third-largest category in the cannabis market, behind flower and vape pens. Their convenience and ease of use make them particularly appealing to new cannabis users who might find traditional methods of consumption, such as rolling joints from loose flower, too cumbersome.

Sebastian Solano, CEO of California-based pre-roll brand Jeeter, highlights that pre-rolls serve as a more accessible entry point for cannabis newcomers. “Buying flower and trying to break it up and roll a joint is not very accessible,” Solano said, noting that connoisseurs might still prefer the ritual of rolling their own joints, but many consumers appreciate the convenience of pre-rolled options.

The Evolution of Pre-Roll Quality and Packaging

In the early days of cannabis legalization, pre-rolls were often filled with lower-quality cannabis, leading many consumers to avoid them. However, as the quality of the cannabis used in pre-rolls has improved, consumer focus has shifted to factors like freshness and terpene content.

To meet these evolving preferences, manufacturers are increasingly using packaging that preserves freshness, with some even employing humidors specifically designed for cannabis. Bard of Custom Cones USA predicts that cannabis humidors will become a staple in the homes of frequent cannabis users, much like cigar humidors are for cigar aficionados.

Challenges and Opportunities Ahead

Despite the growing popularity of pre-rolls, the market faces challenges, particularly in maintaining product quality and meeting consumer demand for fresh cannabis. As competition in the cannabis industry intensifies, companies will need to improve their supply chain management and demand forecasting to ensure that pre-rolls reach consumers while still fresh.

Moreover, as the cannabis market continues to evolve, pre-roll companies may need to adopt new strategies, such as introducing “best-by” dates on packaging and offering returns or discounts for older products. These practices could help build consumer trust and loyalty in an increasingly competitive landscape.

In conclusion, pre-rolled joints have become a major force in the cannabis industry, driven by consumer demand for convenience, quality, and variety. As the market continues to expand and mature, pre-rolls are likely to remain a key product category, appealing to both new and experienced cannabis users alike.