A recent report published by Headset titled “Evaluating New Products and their Lifecycle Across US & Canadian Markets” reveals that Canada is a near perfect testing ground for the introduction of new cannabis products.
Analyzing data gleaned from British Columbia, Alberta, Ontario and Quebec to comprise the Canadian market snapshot, the report considered distinct products that were launched within the full years of 2020, 2021 and 2022 and evaluated them based on sales.
Growth of New Products
According to the report, although there are far fewer products available to consumers within the Canadian market as compared to the US market, the new product category in the country continues to show steady growth. In fact, there was a 21% increase in the introduction of new products in 2021, followed by growth of an additional 6% in 2022.
Despite the growth of total new products introduced to the market in general, certain categories introduced more new products than others, most often in direct correlation with the popularity of the given category. For instance, 27% of all new products introduced to the Canadian market in 2022 were pre-rolls, followed by edibles (9.6%) and beverages (4.4%).
Shrinking Categories
Conversely, “wellness” products such as topicals (-57.3%), oils (-54.2%) and tincture and sublingual (-43.8%) were not as heavily invested in by retail buyers given the decreased demand among cannabis consumers.
Timing of Launch
When it comes to analysis concerning the timing of new product launches, it seems that although seasonality certainly plays a role in making these determinations, market conditions are also a significant consideration. Interestingly, however, data reveals that most new product launches in Canada usually occur in the second half of the year.
New Product Lifespan
With respect to the average lifespan of new products, the Canadian market seems a lot more forgiving than its American counterpart. Approximately 70% of products that are launched at the start of the year in Canada survive for at least a year, with the average new product remaining available for purchase for almost seven-and-a-half months, compared to the four- to five-month lifespan of new products launched in the US. The Headset report suggests that this is due to the fact that there are fewer new products launched in Canada, allowing for a greater chance of survival for those that enter the market.
Strong Performance
The report makes light of the stricter regulatory controls that cannabis retailers in Canada must abide by, which likely influences the number of new products that can be entered into the market. Despite this, Headset concludes that numbers in the country are strong and continue to grow, with many new products, particularly those within the pre-roll category, allowed the space and exposure to perform well.