Making up 26% of dollar sales across BDSA tracked markets in 2022, vapes have grown to become the second best-selling cannabis form factor behind flower. A growing trend in the vape space for the past year has been the rise of the disposable vape subcategory. From the start of 2022 to the end of 2022 (Q1 2022 and Q4 2022), disposable vapes have grown from taking up a 13% share of vape dollar sales to 17% of vape dollar sales. Like any part of the cannabis industry, building a winning disposable vape brand takes meticulous planning and a data-based strategy. Rising to the top of this extremely competitive category takes a thoughtful approach to consumer-facing marketing, pricing, product formulation, and retail strategy.
Vape Consumer Dynamics
While the cannabis consumer landscape is complex and constantly evolving, BDSA consumer data consistently show that vapes are one of the most used and highly preferred form factors. Vape was the second most used and preferred product form factor by inhalable consumers (just behind flower), with BDSA’s 11th wave of Consumer Insights data released February 2023, showing that 43% of inhalable consumers in adult-use states have consumed vapes in the past 6 months, and 22% of inhalable consumers cite vapes as their preferred method of consumption. When we look at why consumers use vapes, 57% of consumers cited ease of use as their reason. “Ease of use”, the top reason, was followed up by “portability/convenience” (41%), “discreetness” (36%), and “taste/flavor options” (28%).
Vape cartridges (510 threaded cartridges specifically) remain the most used and preferred type of vape by consumers, with 43% of vape consumers claiming past six-month use, and 32% preferring vape cartridges, but we‘re here to write about disposables, which aren’t far behind. 32% of vape consumers report past six-month disposable vape consumption, up from 25% in Spring 2020, while 17% state that they prefer disposable vapes, up from 9% in Spring 2020.
Disposable Vape Inputs
Once a segment starts seeing significant growth, increased competition is inevitable, so it’s worthwhile to evaluate the layers within this small but growing subcategory.
Looking at the subcategories in the disposable vape sector, distillate is the most common vape input across the aggregate of BDSA-tracked markets, making up 55% of disposable sales in January 2023, while oil disposables made up 25% of sales, live resin disposables made up 17% of sales, rosin disposables made up a 2% share and RSO disposables made up less than 1%. Taking a closer look market by market reveals that while distillate disposables dominate in many markets, oil disposables make up a dominant share in several markets in the Midwest and Northeast.
Pricing to Win with Disposables
While disposable vapes experienced some price compression over 2022, price drops were lower than the price decline seen across the aggregate of all cannabis categories. The equivalent average retail price of disposables fell 6% between Q1 2022 and Q4 2022, compared to the 17% price decline seen across all categories.
When looking at pricing across disposable inputs, RSO disposables held the highest equivalent average retail price in January 2023 with $40.87. The second highest priced disposable was the rosin disposable subcategory, at $37.45, followed by oil disposables at $29.14, then live resin disposables at $28.67, and distillate at $24.86.
Disposable Cannabis Vape Purchasing Trends: A Look into Basket Analytics
Digging deeper into basket data can tell us more about how consumers shop for disposable vapes. Across all BDSA-tracked adult-use markets in January 2023, the average basket size of a basket containing disposable vapes was $41.77 with a basket penetration of 8%.
A look at cross-buying trends at retail reveals interesting opportunities for cross-promotion in the vape category. In Michigan, where disposable vapes made up 31% of dollar sales in the vape category in January 2023, 67% of disposable vape baskets were multi-item multi-category baskets, while 11% were multi-item baskets with only disposables, and 22% were single item baskets. When looking at cross-category buying, the top cross-purchased categories with disposable vapes is flower and prerolls, with each are present in 18% of disposable vape baskets.
So What Now?
With the vape category in the US forecast to grow to ~$10.4 billion in total sales by 2027, the growing disposable vape sector undoubtedly holds potential for growth. Success in the disposable vape space takes a data driven approach that considers consumer attitudes, vape inputs, basket-building dynamics, and additional attributes like size, strain, flavors, and anything else that can help pave the path to differentiation and growth.