Sales of cannabis-infused edibles in California are projected to exceed $740 million in 2018, as recreational sales take hold. That's double the $370 million generated in the medical-sales only 2017 edibles market.
Today, each CA edibles share point is worth about $7.4 million.
So, who's winning and losing, and how much money are top brands bringing in today?
To be clear, the segment is under marketed. The top California edibles brand, Cheeba Chews, has a mere 5.6% share. For reference, the top selling beer brand, Bud Light, commands 18% share (closer to what leaders in other categories maintain). Fragmentation is still rampant in cannabis, providing huge opportunity for strategic brands and consolidation going forward.
As for marketing spend, the industry average for most categories is 10% - 20% of sales, plowed back into marketing. I can't imagine any of these brands are even close to spending at that level - or, if it's even possible with today's tight regulations.
Here's where the top three CA cannabis-infused edible brands stand today:
1. Cheeba Chews (taffy) commands 5.6% of the edible sales in California with $42M in projected 2018 sales (CA only). They are one of the first established brands among medical users, where last year they brought in sales of $26 million.
2. Kiva Chocolatiers commands 4.3% of the edible sales in California with $32M in projected 2018 sales (CA only). As with Cheeba Chews, they are one of the first established brands among medical users, where last year they brought in sales of $26 million.
They appear to be struggling with their value proposition after recreational opened up. This may hinder their growth.
3. Korova (baked goods) comes in third, at 3.7% of edible sales in California and $27M in projected 2018 sales (CA only). The brand repositioned itself away from ultra-potency to meet the new regulations*. Although their edibles business shrank vs. 2017 (they lost $3M in sales), they are holding their own and have been able to extend the brand into flower (sales of their flower products are not included in this analysis).
*New regulations in CA require edibles to contain no more than 100MGs of THC/unit - seriously eating into the "uber strong" positioning of brands like Korova, which made its name with some of the highest potency brownies available -- upwards of 1000MGs/brownie.
Each of these three brands would be wise to up their marketing game to hedge against increasing competition. The game has just begun.
This analysis is complied using a variety of proprietary and syndicated sources.