Ever since Arizona legalized recreational marijuana back in November of 2020, the state’s market has stayed under the radar for the most part. While you may hear about California’s booming cannabis market, not much can be said about Arizona. Until now.
After releasing a report on the pre-roll market in California a month ago, RollPros just announced another report, this time taking a close look at the pre-roll market in Arizona. While the state’s industry paints a curious picture of steady growth alongside unique trends and curiosities, the new report suggests that convenience is king, budget-friendly giants dominate and smaller brands struggle.
Pre-Roll Sales in Arizona
From September to November 2023, pre-roll sales within Arizona came in at over $36 million, according to the report. Standard pre-roll sales totaled just over $14 million, while infused pre-roll sales dominated at over $22 million.
Even though pre-rolls show steady growth, Kyle Loucks, Founder and CEO of RollPros, says that flower is still a best-seller in Arizona.
“Flower still dominates the market, with approximately 2.25x the revenue of pre-rolls,” he says. “But, the Arizona market has been shrinking rapidly between 2023 and the first months of 2024. Pre-rolls are the rare exception- they have grown (small numbers, but still growth), while all other categories have contracted substantially.”
More People Are Smoking Pre-Rolls
The report found that 50% of cannabis consumers smoked a pre-roll within the three-month analysis period, which is up 2.4% versus the previous three months (June through August 2023). However, the percentage of consumers that prefer pre-rolls has actually dropped 1.5 points to only 13%.
This is just a more prominent example of a trend appearing in many markets: the reluctant consumer. Cannabis users continue to gravitate towards the convenience of pre-rolls, according to the report, as the other consumption methods with more hype run out of steam. But this doesn’t mean they really like pre-rolls — it’s just what’s easy.
“Pre-rolls will continue to post slow but steady growth,” Loucks notes. “However, we do expect to see more brands continuing to drop out of the market. Potential newcomers will likely be nervous to go up against the biggest pre-roll brands in the country (who have established footholds here), and more established local players will simply give up unless they can figure out how to gain a larger and sustainable category share for themselves.”
Capitalizing on Arizona’s Pre-Roll Market
For brands looking to capitalize on the growing pre-roll market in the state, Loucks offers some advice: “Don’t go for the lost-cost, volume play,” he says. “The Arizona market is dominated by multi-state brands that own that positioning and there is no possibility of them giving it up anytime soon.”
Instead, Loucks advises to focus on something that is purely Arizona — something that resonates with the state. “The big players can’t call themselves local, but if your brand can own that label, that can be a valuable point of differentiation. Beyond that, we see that .5g multipacks and infused joints are winning here as they are in most markets, so stick to variants of those SKUs.”
