Cannabis Topicals: Consumer Trends

What’s up with cannabis topicals? Why aren’t they more popular?

Cannabis topicals make up less than 1% of total cannabis sales in North America. And its popularity is slowly decreasing in both Canada and the US.

Why?

They have greater bioavailability than capsules, for instance. You can find near-instantaneous relief by directly applying cream or gel to sore or infected areas.

But this also explains why cannabis topicals aren’t as popular. 

As flower is the largest category, and pre-rolls are one of the fastest growing, it’s safe to assume most people are smoking or vaping cannabis. 

Cannabis-infused topicals are cannabinoid therapy, but not in the same physiological way smoking or vaping cannabis is.

Fortunately, Headset has put together a report that looks into consumer trends with cannabis topicals. The data is theirs; the interpretations and comments are my own.

Market share of Topicals in North America

This graph looks at the market share of topicals compared to other cannabis products.

As you can see, topical products aren’t that popular. They account for a small share of total cannabis sales in both the US & Canada.

From January through August 2022, topicals make up only 0.5% of the total Canadian cannabis market.

And this is a 9% market share decrease from the previous year. 

For the US, this January-August 2022 period saw cannabis topicals sale account for 0.7% of total cannabis sales. A 3.4% reduction in market share.

Market share over time

This graph looks at market share over time. In the US, topicals peaked at 1.89% in 2018. Since then, market share has been decreasing and has levelled off.

Market share has been decreasing in Canada, as well, levelling off at about 0.7%,

In Canada, topicals peaked at 0.85% in December 2021. Possibly because of the holiday season and novelty gift buying. Because by August of this year, sales decreased to 0.52%

Cannabis Topicals in states & provinces

Across Canada, topical popularity differs from province to province

Alberta has the highest share of any province, with 2.7%.

This is five times the national average. Ontario & BC also have higher than national average sales.

Saskatchewan lowers the national average, making topicals 0.1% of all cannabis sales.

Florida wins first prize in the US as the highest topical market with 1.3% of total cannabis sales. Florida is the largest medical cannabis market in the United States. 

No doubt because of the older adults using CBD cream. (Older adults tend to use topicals more than younger adults, as seen in the data below).

Topical use is also high in Colorado, one of the first states to legalize, back in November 2012.

Cannabis Topicals Price Volatility in Canada

This graph looks at the average price of topicals since 2021 in Canada. 

Prices are comparable between the US and Canada, where the average topical price in the US is $26.70. In Canada, it’s $31.25 or $25.71 in US dollars.

Where Canada differs is in price stability. Especially over the past two years.

In Canada, the price of topicals fell in 2021 to the point that by August 2022, there was a 12.3% decrease. 

In other words, what was once a $40 cream is now only $33.

The lowest average price came in December 2021, when retailers priced topicals at $28.44. Since then, prices have been on a slight but steady upward trend.

Price of cannabis Topicals in the US

This graph shows the average price of topicals in the US which has been much more stable and predictable. 

Since the beginning of 2020, the average price has stayed around $26-27. There has been a slight increase of 1.4% as of August 2022.

What kind of Topicals do people buy?

What kind of topicals are popular in the US and Canada? Which are the highest-selling according to the data?

Lotions, salves, gels and cream have been the most popular.

In Canada, these products make up 60% of total sales, while in the US, these products account for 74.6% of total cannabis topicals sale.

Canadians also seem to like cannabis-infused soaks, scrubs, and bath salts. (The bath salts you put in your bath, not THC-infused synthetic cathinone).

CBD is Raison d’état for topicals

Topicals are the most popular when they have CBD in them. 

CBD is anti-inflammatory and good for the skin. It works on pains, aches, and cramps and has neuroprotective properties. 

So, how popular are CBD products in Canada and the US?

In Canada, 92.7% of topical products had CBD either exclusively or mixed with THC and other cannabinoids.

In the US, 79.4% of topical products contain some CBD. However, it’s worth noting that Americans can buy CBD-only products practically anywhere (depending on your state). 

Thanks to Donald Trump signing the 2018 Farm Bill into law, Americans can easily access legal CBD products online.

Across the border, the Canadian government handicaps consumers with the legal cannabis access system. Retail varies from province to province, but overall, both levels of government keep CBD prices artificially high.

Nevertheless, products with a balanced THC-CBD ratio of 1:1 are the most popular in both countries.

US consumers prefer CBD products containing more THC because the data doesn’t show non-cannabis store CBD purchases. So when Americans come to a cannabis store for a topical, they want it to have THC.

That’s why THC topical products with 300mg of THC or more are the most popular in the US and account for 1/3 of cannabis topicals sale.

But again, the different access systems skew the market data.

For example, CBD isolate sales account for 30.9% of cannabis topicals sale in Canada. Compared to 7.1% of sales in the US. 

Americans can purchase CBD isolates from anywhere, including online, where the Canadian government restricts consumers to legal access points set by federal and provincial governments.

Demographic preferences

This last graph shows the different age groups and how that accounts for cannabis topicals sale. 

Not surprisingly, older people prefer to use topicals than smoke flower. 

Females are more likely than males to shop for topical products, which is also not surprising, as females make up a large part of the non-cannabis topical market.

Baby boomers account for 16.1% of all cannabis topicals sale, whereas they only make up 4.6% of the total cannabis market.

In contrast, female consumers in the generation Z category make up 3.6% of cannabis topicals sale.

Conclusion

Topicals and flowers may be contracting in the cannabis space. Still, other products like pre-rolls and beverages are gaining market share and popularity.

Trends and consumer demand always change, so nothing here should be considered long-term. 

It may be common in a few years for many cannabis consumers to have a nano emulsion processor in their homes to make their own cannabis drinks.

This change in consumer trends and market technology would likely see decreased sales in the beverage market. This might coincide with topicals increasing in popularity as more baby boomers discover the healing and soothing powers of cannabis topicals.

It all depends on the consumer. 

In a free market, the consumer votes with their dollar. No one rises to the top unless they arrange the resources necessary to satisfy consumer demand.