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Pot Cos. Find That High Isn’t Good When It Comes to Cost

Fancy craft cannabis seemed like a good idea, but it’s the budget bud that is becoming the bigger category. Cost-conscious consumers whether from the pandemic economy or those just wanting to get more bang for the buck are driving cannabis companies to create value product lines.

Of course the companies would prefer shoppers to buy the higher margin luxury products, but if you are a frequent consumer, fancy cannabis isn’t really necessary. What is necessary is the ability to get the most cannabis per shopping trip that you can. The value shopper has always been a big part of the cannabis consumer world, but the producers have never really courted them until now. Some, like early operators Organa’s Journeyman, did embrace the buyers who wanted the most THC per dollar they could buy.

But most tried to convince the customer that this wasn’t the right way to go about buying their cannabis. They tried to “educate” the shopper on organics and strains, terpenes and magnifying glass containers. In the end, the customer just wanted to get a lot of weed for not a lot of money and finally it seems the producers are listening to their customers. These are the latest companies to launch new “value” lines of products.

Organigram Got the Telegram

In July, Organigram Holdings Inc. (OGI) (TSX: OGI) launched Trailblazer Snax, a premium-quality, value-priced, cannabis-infused chocolate bar.

Greg Engel, CEO of Organigram, called the offering, “exceptional chocolate, exceptional flavour and exceptional value.”

The chocolate is a 42 gram bar with 10 mg. of THC and is competitively priced. The company said it is the largest cannabis-infused chocolate bar currently available in Canada. Each bar consists of five sections and Organigram believes it will appeal to chocolate lovers and consumers looking to share and individuals looking to control their dosage.

The Trailblazer value brand offers higher THC levels versus what was offered when originally launched near the start of adult-use cannabis legalization, at a competitive price point such that the company believes it has the ability to compete in the growing large format value segment of the market. The company said it expects to start shipping new core strains with higher potency THC during fiscal fourth quarter, and it began rolling out further line extensions, including new size formats and three-pack pre-rolls of its most popular strains, such as Limelight and Blue Velvet, in June 2020.

Will This Reign Supreme?

The Supreme Cannabis Company, Inc.  (SPRWF)  (TSX: FIRE) has launched Hiway, which the company describes as a new brand dedicated to providing frequent cannabis consumers with affordable products that do not compromise on quality.

“While we continue to see a strong market for our premium 7ACRES products, we are also seeing a tremendous consumer response to more affordable cannabis offerings; in July, dried flower products priced under $6 per gram accounted for approximately 40% of flower sales in Ontario,” said Beena Goldenberg, CEO of Supreme Cannabis. “With Hiway, we aim to exceed consumer expectations for value products by delivering a quality product at an affordable price. With the launch of this value-oriented brand, we are leveraging our competencies, capacity and efficiencies to build market share and create an exceptional experience for more cannabis consumers.”

Hiway will kick off its value line in Canada with Hiway Hash, described as a two gram “solventless” concentrate. Supreme Cannabis said it expects to expand Hiway’s product portfolio to include large format flower, additional concentrate products, extracts and vapes. 

Value Shoppers Float to Harborside 

CEO Peter Bilodeau from Harborside (OTC: HSDEF) in Oakland has also seen the low price/high THC comparison shopper. He thinks there may be other value trends at play, like buyers determining personal ratios of price to THC.

“For some, low price and high THC correlates to value,” he says, “but we still have a varied customer base that is looking for high quality, small-batch items, flavor, consistency, and a wide selection of strains/options. We think this is why people tend to shop for the sales items for the best deal versus only shopping for items that are consistently priced lower.” 

Bilodeau said Harborside has seen an increase in customers shopping for its sales products as well as increased basket sizes. He noted that like other industries, the value market has always been important to the success of most brands that don’t market themselves to be exclusively luxurious.

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