By Harrison Bard, Co-Founder and CEO of Custom Cones USA & DaySavers
The cannabis industry continues to evolve at a rapid pace. Once considered an afterthought, pre-rolls have emerged as a dominant force in the market and the fastest growing segment of the cannabis economy and are on their way to generating $5 billion in revenue by 2030.
Custom Cones USA's latest whitepaper, produced using data from cannabis analytics firm Headset along with surveys of pre-roll manufacturers, revealed some compelling insights into the state of the pre-roll market in 2024, including a new top pre-roll category and the unlimited potential it has for the future.
A $4 Billion Powerhouse
The numbers speak for themselves: pre-rolls generated $4.1 billion in revenue from January 2023 to June 2024, with over 394 million units sold. From June 2023 to June 2024, pre-rolls were the third-highest revenue generating category in the industry, behind only flower and vape pens.
This remarkable growth is reflected in the increasing market share, which rose from 13.2% in January 2023 to a record-high 15.9% by June 2024. Monthly sales have seen a corresponding surge, climbing from $181.2 million to $257 million during the same period. That’s a year-over-year growth of 11.89%, the highest of any category in the industry.
This growth trajectory is even more impressive when we look back to 2019, when annual pre-roll sales revenue stood at just $469 million. In just five years, we've witnessed a nearly sixfold increase, reaching $2.7 billion in 2023.
The Rise of Infused Pre-Rolls
One of the most significant trends we've observed is the dominance of infused pre-rolls, which combine flower with a cannabis concentrate. In 2023, the Connoisseur/Infused category became the top-selling segment in the pre-roll market, overtaking Hybrid - Single Strain products. Infused pre-rolls alone accounted for more than $1.75 billion in sales from 2023 to mid-2024, commanding a 44.4% market share in the first half of 2024.
This shift towards infused products reflects changing consumer preferences, maturing markets and advancements in pre-roll machinery. The growing demand for potent, premium experiences has driven innovation in infusion technology, allowing producers to create high-quality products at scale while maintaining profitability.
The Multi-Pack Revolution
Another game-changing trend in the pre-roll market is the rise of multi-packs.
In 2018, multi-packs made up just 27.7% of the market. By June 2024, this figure had skyrocketed to 49.6%. Multi-pack sales revenue has seen a corresponding increase, jumping from $89.1 million in January 2023 to $127.4 million in June 2024 – a 43% increase in just 18 months.
The popularity of multi-packs is driven by their economic benefits for both producers and consumers. For manufacturers, multi-packs offer savings on packaging and labor costs. For consumers, they provide value and convenience, reducing the need for frequent dispensary visits.
The data shows that the 2.5-gram pack (five 0.5-gram pre-rolls) has emerged as the most popular multi-pack size, representing 16.2% of total pre-roll sales from January 2023 to June 2024. Of the products sold in all markets during those 18 months, 31 of the top 50 sellers were 5-pack pre-roll multipacks.
That said, single 1-gram pre-rolls still reign supreme, accounting for 42.3% of all pre-roll sales during this period
Price Dynamics and Market Maturation
Interestingly, while premium pre-roll sales – and their higher price point – are soaring, there's a general trend of price stabilization and even slight declines across the broader pre-roll category. The average price of a pre-roll at dispensaries has fallen by 16.7% since January 2023, from $7.80 to $6.50 in June 2024.
This pricing trend is consistent across all segments, including the premium Connoisseur/Infused category. The average Connoisseur/Infused item price decreased by over 23% from January 2023 to June 2024, dropping from $11.51 to $8.77.
Despite this price decline, the pre-roll market remains highly profitable. The improved market share, skyrocketing unit sales (from 15.9 million items in January 2023 to 26 million in June 2024) and the rise of cost-effective multi-packs all contribute to maintaining strong margins for pre-roll businesses.
Looking Ahead: A Bright Future for Pre-Rolls
As we look to the future, all indicators point to continued growth and innovation in the pre-roll market. Several factors support our optimistic projections:
- Ongoing product innovation, particularly in the infused and multi-pack categories;
- Increasing consumer acceptance and demand for convenient, ready-to-use products, including pre rolled blunts;
- The introduction of pre-rolls to new markets, such as Ohio and Hawaii, as well as the opening of new markets in general;
- Potential federal rescheduling, which could open up new markets and demographics; and
- Continued price stabilization, making pre-rolls more accessible to a broader consumer base.