Vaporizable concentrate pens, cartridges, and devices were one of the most highly-anticipated 2.0 categories in the Canadian cannabis industry. They present an interesting value proposition of convenience and discreteness for consumers and they offer cannabis companies the ability to get more creative with the branding of the product itself.
These products became available in most Canadian provinces starting in December of 2019. However, Quebec has decided to completely ban the sale of these products (along with some edibles and concentrates) for the time being.
Today, we are going to examine the relatively new vaporizable concentrate market in Canada, try to define the vape pen consumer, and analyze the marketing strategies of the current brands in the space.
How big is the Vape Pen market?
Even with a substantial controversy over the safety of vape pen devices in 2019, the category continues to grow and accounts for a large portion of all sales in mature markets. According to 2019 data from Headset, vape pens represented between 15% to 30% of total adult-use cannabis sales in legalized states. 31% of all cannabis sales in California were concentrate pens, with 20% in Nevada and 19% in both Washington and Colorado.
Recent data revealed from the Ontario Cannabis Store (OCS) gives us a good idea of how popular vape pen products have been since their launch. The OCS generated approximately $4.3 million in sales from cannabis 2.0 products in January, with the majority ($3.7million) of that revenue coming from vape pens. In comparison, edibles only generated $569,00 during the same time period, although limited stock may have played a role.
The OCS generated a total of $33 million for all cannabis sales in January, which means that vape pens now account for approximately 10% of all purchases in the province. If Canadian provinces continue the trajectory of mature markets in the U.S., that 10% could soon double or triple.
Who is the Vape Pen Consumer?
When looking at demographic statistics from the U.S., it appears that vape pens appeal to younger cannabis consumers. Generation Z and Millennials are the main purchasers of these products at 20% and 21% of total sales respectively. Meanwhile, The Silent Generation (those born between 1925-1945) are generally skeptical of these products, with only 10% of their cannabis purchases being vape pens. This could be for a variety of reasons including the younger generation’s familiarity and comfort level with vaporizable tobacco products like the Juul, the desire for pleasing and fruity flavours and a larger need for being discreet (living with parents, living in dorm rooms, living with non-cannabis friendly roommates, etc.).
According to Headset data, the vape pen market breaks down into 37% female and 63% male, showing that men are more likely to purchase these products. However, the same data also shows that women spend 66% more than their male counterparts on CBD-dominant items, indicating that there may be a lucrative market for female-focused Cannabidiol-rich vapes.
In Canada, it appears that residents of British Columbia are much more likely to purchase 2.0 products such as vape pens, edibles, and concentrates than consumers from other provinces. This is likely because BC has the most well-developed traditional market in all of Canada, which means that consumers from that province:
a) Have access to higher quality cannabis flower at a lower price illegally (which means they aren’t buying their flower from the legal market but may buy 2.0 products from the legal market).
b) Have already been exposed to 2.0 products through the traditional market and are therefore more comfortable with purchasing and consuming them.
Now that these products are widely available through regulated channels, we are beginning to see new categories of vape pen consumers emerge. The three new segments we see potentially emerging are:
1) Parents and “Soccer Moms” who are looking for a convenient, aromaless way to relax and relieve stress, similar to a glass of wine.
2) Wellness Consumers who prioritize CBD-dominant vape pens as a therapeutic/performance supplement.
3) Sophisticated Professionals that enjoy consuming cannabis before, during, or right after work and have a need to be discrete.
The current vape pen consumer skews male, is typically between the ages of 21-35, and has a high amount of disposable income.
What types of Vape Pens are sold in Canada?
There are three main categories of vape pen products within Canada: 510 threaded cartridges, disposable pen battery systems, and closed-loop systems.
510 Threaded Cartridges
These are the most common type of vaporizer cartridge and will work on a variety of batteries. “510” describes the type of threading that is used to screw the bottom of the cart to the battery. Those previously purchasing from the informal market and consumers who also use nicotine-based vaporizers will likely be familiar with 510 batteries. The majority of brands that offer vape pens in Canada have chosen to offer 510s only.
Disposable Pen Battery Systems
Disposable pens are one-time use devices that are thrown out when finished with. These pens cannot typically be re-charged or re-filled. Examples include Dosist, Foray, and Ace Valley.
These are cartridges that will work with only one type of specific battery. These systems include the PAX Era device (which is the most popular closed-loop system), the Feather device, Tokyo Smoke’s Luma, and FIGR’s Master Vape.
A relevant comparison outside of the cannabis industry is Apple products vs Android products. Android products can be used on a variety of hardware and with a variety of different standard chargers (just like 510 carts). Apple products are closed-loop systems that require specific and special chargers and hardware (similar to the PAX Era or the Feather device). Apple products, just like closed-loop vaping systems, are typically regarded as higher quality or a more premium (or at the very least, more expensive) offering than 510 (or Android) products.
Which type of cannabis vape pens do you prefer?
What Brands Sell Vape Pens in Canada?
Products: A white unique “dose-controlled” disposable vape pen device.
Product details: Disposable pen is manufactured to deliver a precise 2.25mg dose for every puff. Sold in 0.5g and 0.185g sizes. The pen is a sleek device, named one of the top 25 inventions of the year by TIME magazine.
Branding details: Dosist is a brand that originated in California in 2016. The Dosist brand was brought to Canada by Aphria Inc through an exclusive partnership.
The brand separates its offerings into six different intent-based varieties: arouse, calm, bliss, passion, rest, and soothe. There are some limitations on what Licensed Producers can communicate about the potential effects of their product, but it seems that Health Canada is fine with these effect/intent-based names of products. The branding seems to appeal to younger female consumers and novice users.
The company made a big splash pre-legalization with their “Not Available In Canada” campaign, which was nominated for Campaign Of The Year in the 2018 ADCANN Awards.
PAX Era Pods – 7ACRES, Namaste, RIFF, Solei, Edison, TrailMix
Products: Concentrate Pods compatible with the PAX Era vape pen device.
Product details: Closed-loop pen-and-pod system. Hardware shaped and operates similar to the popular Juul nicotine vaping device. Pods are sold separately by Canadian Licensed Producers. Pods are C02 extracted and come in a variety of strains and inputs.
Branding details: PAX
PAX has a large amount of brand awareness in both the U.S. and Canada, mostly due to the success of its dry herb and loose concentrate vaporizer devices – the PAX 2 and PAX 3. When the PAX Era launched in Canada, naturally consumers were excited. PAX signed an agreement with The Supreme Cannabis Company, Aphria, Aurora and Organigram. Shortly after that, they signed another agreement with Zenabis and a few months later they partnered with 48NORTH/their subsidiary Fume Labs. Now in mid-2020, most of these brands have finally launched their PAX products into the market.
7ACRES, The Supreme Cannabis Company’s flagship recreational brand, offers PAX Pods in both Sativa and Indica. 7ACRES Sativa Pods are made with their Jack Haze cultivar and their Indica pods are made with their Sensi Star cultivar.
They have created a marketing campaign titled “Sesh To Go” to help promote these products, advertising the PAX Era as a great way to enjoy the taste and potency of their cannabis flower in a highly convenient, portable, and discreet vaporizer. Additionally, they have integrated colourful aromatic PAX imagery with their recent Meet Your Taste Buds campaign.
Namaste, Zenabis’ flagship recreational brand, was one of the first brands to release PAX pods in Canada. Their pods are available in three of their strains: Ultra Sour, D. Bubba, and Citrique.
Namaste published a helpful guide for users to learn how to use the PAX Era device and optimize it without downloading the mobile app. Their marketing campaign focused heavily on this guide.
Riff and Solei
Riff and Solei are recreational cannabis brands offered by Aphria that have recently launched their PAX Era vapor pods.
RIFF is an edgy, hip-hop-inspired, art-forward brand that focuses on the “personalized vaping experience” and the “strain flexibility” of their PAX pod products.
Solei is an approachable, novice, and female-focused brand that emphasizes the “customizable temperature and potency” and the fact that their PAX pods offer 350 inhales.
48NORTH recently launched PAX Pods from a new brand, TrailMix, which is a range of sun-grown, rain-watered cannabis products that are “inspired by the sights and sounds of the great outdoors”.
Moonlight Shadow Pax Pod is an Indica-dominant oil with berry and sweet grape flavours.
Daytrip Eclipse Pax Pod is a Sativa-dominant with a minty and sweet taste.
Feather Pens x Organigram (Edison)
Products: Disposable vape pen that resembles a 510 but with a more sophisticated design.
Product details: 0.3g cartridges made with distillate. Offered in Edison’s Lola Montes, Rio Bravo, and La Strada strains. The device is a sleek, blue, cylindrical pen.
Branding details: The Feather Company signed an exclusive agreement with Organigram to bring their devices to the Canadian recreational market. Organigram has released these vape pens under their flagship Edison brand. Feather pens also sell in Colorado in America.
FIGR Master Vape
Products: Closed Loop System, rounded rectangular pen device and pods.
Product details: 0.5g pods available in Mixed Berry, Melon, Terpene, and Citrus. FIGR also offers 510 “craft” cartridges.
Branding details: FIGR is a “handcrafted, homegrown” cannabis company that grows “cannabis you can count on”. FIGR is Prince Edward Island’s only cannabis producer. Much of their marketing is focused on the fact they trace their products from seed to sale. Consumers can track the entire journey of the products they purchase online using their “trace your product” functionality on their website.
Instead of marketing strain-specific or by Sativa/Indica distinction, FIGR has chosen to market based on flavour (similar to popular nicotine products like Juul).
Tokyo Smoke Luma
Products: Closed-loop pen-and-pod system. Go and Pause pods.
Product details: 0.42g cartridges with ceramic heating technology and coloured mouthpieces. Resembles the PAX Era or Juul device. Tokyo Smoke-branded devices (with red circle logo).
Branding details: Tokyo Smoke, a brand offered under the Canopy Growth / Hiku umbrella decided to launch their own closed-loop vape pen system.
Their Luma pods are offered in Tokyo Smoke’s intent-based product categories, including “Go” (a Sativa-dominant oil) and “Pause” (Indica-dominant oil). Each pod’s mouthpiece is a different colour, Go is yellow and Pause is purple.
Products: 510 Vape Cartridges – Northern Lights, Blue Dream, and 2:1 CBD:THC.
Product details: 0.5g cartridges featuring a ceramic coil and medical-grade glass. Made with 95% distillate and 5% terpenes.
Branding details: Wayfarer is one example of a brand that exclusively sells 510 vaporizer carts, offered by Shelter Brands (a BC-based brand house that also includes Journey, Wildlife, and Farmstead/North40).
The brand proclaims that it is “for those with uncompromising tastes” and promises that “Wayfarer delivers sleek design and an unflinching commitment to quality”.
510 Vape Carts
A variety of brands offer 510 vape carts. Most recreational brands that have ventured into 2.0 products offer at least one 510 vape SKU. 510 vape carts are proving to be incredibly popular with Canadians, especially those value and bargain consumers. 510 threaded systems allow consumers to try a variety of different brands and strains without the need for purchasing a new battery. 510 consumers are less likely to be brand loyal for this reason.
Interestingly, two formerly illegal market 510 vape brands have transitioned to the legal market. Both Flyte and Phyto are now available through regulated channels in British Columbia. However, products with the exact same brand name (and logo) are still available for purchase through illegal and unregulated channels at the same time, adding a layer of confusion for consumers.
Legal Phyto Extractions (bccannabisstores.com)
Illegal Phyto Extractions (Illegal Mail Order Service – First Result on Google)
The Future of Vape Pens in Canada
Similar to all other 2.0 categories in Canada, the future of vape pens is yet to be seen.
It will be very interesting to watch the battle between 510 threaded cartridges and the variety of closed-loop systems play out. As we conduct more market research, the cannabis industry will gain a better understanding of which types of consumers are purchasing which types of products. Early data shows that 510 vapes sell more volume, but these closed-loop systems may prove more lucrative for LPs that can succeed in the vaping space.
Vaporizer pens have largely recovered from the “vape crisis” controversy in 2019 and will likely continue their upward trajectory of growth for the next several years as novice consumers begin to enter the market.
The vape pen category in Canada still has a long way to grow before it matches the popularity of these products in the United States. Stay tuned to ADCANN as we track the progress of this category in North America.