The cannabis extraction market continues to display strong growth and expansion. While traditional flower sales have had a hold of the top market space for years, cannabis extracts are now closing in and even eclipsing flower sales in some markets. This growth is due to an increased demand for products derived from cannabis extractions alongside new techniques and methods that are making it cheaper and more productive for producers to create a wide array of extracts.
A recent study by Health Canada has shown evidence of the growing extraction market trends, with sales of cannabis oil up near 56% over flower sales in 2018 and nearly 86% as compared to 2017. This growth is also seen in the USA with the overall market of total cannabis sales (medical and retail) in North America projected to reach $24.5 billion by 2021.
Extractions are leading the way in this sky-rocketing market growth with concentrates specifically gaining momentum and popularity. Retail sales of concentrates are projected to grow to about $8 billion in retail sales by 2022. In California, the state with the largest market share of cannabis sales, concentrates and edibles made up 47% of the total market, generating nearly $1.2 billion in 2018 alone.
The rise in the extraction market is also due to health-conscious consumers shying away from the negative effects of smoking cannabis and instead choosing to consume via other methods made possible by extractions. Vaping various concentrates and ingesting edibles are the most common forms of consumption and the ease of use and increased potency of these products are escalating demand. New variations on cannabis extraction products are also increasing the market, with infused beverages making up nearly 5% of the edibles market cornering $30 million in sales. That number is expected to go up by almost an order of magnitude in the next five years.
An expanding concentrate market should keep the overall extraction market growing for the foreseeable future. Cannabis producers see the effects extracts have at decreasing production costs and increasing profit margins due to less time and resources spent on processing whole plant material. A higher price point as well as less overall shipping volume with concentrates, and extracts in general, should also continue to drive the market towards accelerating growth for years to come.