Editor’s note: This week Hemp Industry Daily is highlighting stories and analysis on the delta-8 THC phenomenon. Today, a look at delta-8 THC sales trends in marijuana dispensaries. Read more in the special D-8 February issue of MJBizMagazine.

Plant-touching companies weren’t the only businesses surprised by the sudden and explosive growth of delta-8 THC in 2020. Sales of the novel cannabinoid surprised trade associations and ancillary companies as well.

Seattle-based cannabis analytics firm Headset compiled delta-8 sales numbers for MJBizMagazine, and they show the rapid rise in popularity of products that contain “delta-8” in their names.

Cooper Ashley, senior data analyst at Headset, cautioned that the figures are based on point-of-sale data and are susceptible to errors made by retail workers at checkout.

Still, the numbers paint a picture of the rapid increase in delta-8 popularity as well as the actions taken by regulators in markets where the data was collected: Arizona, California, Colorado, Massachusetts, Michigan, Illinois, Nevada, Oregon and Washington state.

We caught up with Ashley to learn about the D-8 phenomenon’s effect on retail cannabis sales. Answers have been edited for length and clarity.

The explosion of D-8 sales in the third and fourth quarters of 2020 coincided with a dip in the total cannabis market. Do you think the two are related?

You have to remember that growth in the second and third quarters of 2020—after the initial (COVID-19) lockdown and through the summer—was some of the biggest growth we’ve seen in the cannabis market in a very long time, including in more established markets like Washington and Colorado.

Q4 2020 was a return to normal after unexpected growth in spring and summer sales.

That’s also the time when people started to hear about (delta-8 THC) as an option, especially in the world of CBD and gray-market cannabis. That’s when it exploded in name recognition and popularity.

We can see that delta-8 sales exploded in late 2020 and continued to grow through Q2 of 2021.

Have you ever seen a cannabinoid rocket to popularity like this?

The only thing I can think of is CBD itself. It is reminiscent, but I definitely don’t think it’s as widespread or common as CBD was when it was gaining popularity.

Still, that quick rate of growth and adoption was similar to when CBD really took the country by storm a few years back.

The edibles category for delta-8 products is incredibly robust. Is that the case for other lab-made cannabinoids as well?

Tinctures, capsules, edibles and topical categories seem to cater a little bit more to a wellness-type customer.

We see a lot of CBN in the edibles category as well as ingestibles like tinctures and capsules. CBN, especially, is seen as more of a wellness-type cannabinoid. Customers are potentially looking more to treat symptoms/get better sleep (with CBN), and that tends to translate to noninhalable categories.

Edibles may be more approachable for new (cannabis) users or those looking to treat insomnia or treat pain.

What do you think caused the rapid decline in D-8 sales starting in 2021?

We can see that delta-8 sales exploded in late 2020 and continued to grow through Q2 of 2021, but in Q3 (they took) a pretty significant nosedive.

There were a few quarters when (D-8) growth was quick—probably because it was gaining popularity, and also it was quite unregulated.

Since it gained popularity, state governments have been forced to try to deal with it—and some have banned it. Now that it is more regulated, I think that level of growth has been naturally curtailed.

It had a moment of explosive growth, and I think that moment appears to be passing.

How does the price of delta-8 products compare with the other items you track?

It appears that customers who are looking for delta-8 products will have to shell out a bit more cash to get them.

Over the previous 90 days, the average item price of a delta-8 edible product was about 24% higher than a non-delta-8 THC edible.

Coming tomorrow: A look at consumer confusion about delta-8 THC.

The American Trade Association for Cannabis and Hemp, an industry trade and advocacy organization, has formed a new Cannabis Beverage Council to connect cannabis industry and beverage industry leaders focused on expanding the cannabis beverage segment.

Hemp-derived CBD beverages will be a growing segment among consumers, accounting for up to $1.3 billion in sales by 2025, Nielsen Global Connect projects.

The council was formed to “forge a new beverage market by harmonizing canna-beverage policies across the country,” ATACH President Michael Bronstein said in a statement.

Founding members of the council include Anheuser Busch heir Adophus Busch V, founder of Denver-based ABV Cannabis Co., and entrepreneur Scott Coors of the Coors Brewing family, who serves on the board of directors for SeroVita Holding Corp.

“At the repeal of alcohol prohibition in the 1930s, the industry came together to create an industry effort and agree on responsible consumption, policies, and best practices,” Coors said.

“ATACH’s new council for cannabis beverages is modeled after this concept, which is why I am a part of this historic moment.”

The council also includes founding members David Klein, CEO of Canopy Growth, Christy Zhou, vice president of legal and regulatory affairs at Organigram; Erik Knutson, CEO and co-founder of Keef Brands; Bill Silver, president of new markets at Cannacraft; Chuck Smith, CEO of BellRock Brands, Koji Pupo, vice president of business development at Columbia Distributing, Gary Kaminsky, director of legal compliance at Acreage Holdings, Jake Bullock, co-founder of CANN and Josh Lizotte, CEO of Rebel Coast.

Read more about the cannabis beverage market in Hemp Industry Daily’s free report, “How to Navigate the Complicated World of CBD in Retail.”