Hey, y’all! Happy Sunday - I hope you’re all having a great weekend and are ready to start your week off strong tomorrow. Today, I’m talking about the changing cannabis consumer and how businesses can respond to this change. 80% of adults in legal markets are open to trying cannabis, have tried it, or regularly consume it. The number of cannabis rejectors are dwindling - signaling the work we are doing is effective. There are a few other things to know, though, so let’s dive in. |
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I’m a firm believer in niche-specific events for the cannabis industry. I developed this opinion after hearing such positive feedback from a recent event by The Cannabis Marketing Association.
There are too many things happening in cannabis for one event to benefit everyone. That’s why I’m so excited that PBC Conference 2022 is partnering with The Green Paper to promote their upcoming cannabis conference in DC! PBC 2022 is the conference for cannabis payments, banking, and compliance.
Hear from powerhouse speakers like Senator Jeff Merkley, Congresswoman Eleanor Holmes Norton, Mitch Baruchowitz, Founder & Managing Partner of Merida Capital, and more. More than 15 different state cannabis regulators are also participating.
Be part of the conversation advancing the cannabis banking ecosystem and register for PBC 2022 on September 7th and 8th in DC!
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The changing tide of cannabis consumers |
“The most constant thing is change,” -several are quoted as saying, probably about the legal cannabis industry. |
New developments are happening in our industry all the time. A new way of doing business, a new M&A, a new state coming online.
It’s a full time job to keep up with it - which is why my full-time job is to keep up with it so you don’t have to 🙂
Consumers are also changing and businesses have to keep up with that to succeed & stay competitive in our growing space. Thankfully - I’ve got ya there, too.
There are a mountain of reports on cannabis consumers. Who they are, why they consume cannabis, where they shop, and what they are buying, and more.
And a lot of the reports conclude the same thing: consumers are in an experimental phase and want to try new products, brands, doses, dispensaries, etc. It’s a sentiment I’ve echoed in a lot of my pieces, too.
But BDSA’s most recent report is one of the first I’ve seen that has found data about how the consumer’s habits are changing. |
Consumers are settling in
According to BDSA’s most recent data, there was a decline across all major form factors by recent consumers (within the last six months). Consumers could simply be settling into what works for them and purchasing less options, explaining the decline. Overall cannabis sales are down, too, but there are several circumstances at play.
Here are the form factor numbers: 54% of consumers are sticking with flower 42% go for edibles 35% are choosing topicals (this def shocked me - I expected a smaller number) 31% of consumers purchase vape cartridges
28% of consumers are grabbing pre-rolls 19% for beverages 18% are buying dabbable products
And 11% for tinctures |
Gummies, vapes, and flower are losing steam quicker than other product categories.
Topicals, though, are rapidly gaining preference, despite losing market penetration at a greater rate (9.5%) than every other category. Consumers are finding what works for them and topicals serve a niche group: people with chronic pain. Consumers are also beginning to fall into brand loyalty - a concept that hasn’t really existed in the legal cannabis market yet.
Several brands are entering the scene at once, consumers are excited about the options and try everything they can get their hands on - so widespread brand loyalty hasn’t developed, especially in new markets.
As the legal market evens out, consumers are finding the brands that work for them and beginning to stick with them.
I’m for sureee one of them 🙋♀️ (Shout out to Sinse and Good Day Farm - my two faves in Missouri rn)
Cannabis rejectors are disappearing
80% of adults in legal states are bought into legal cannabis - the number of those who aren’t is shrinking.
Those who reject cannabis fell 15% to just 23% of adults from the Fall of 2021 to Spring 2022. This should energize us, y’all. This tells me: 1. Our efforts to change the stigma surrounding cannabis are working
Keep talking about it, but please exercise patience & kindness as you try to educate people about cannabis. Remember the issue isn’t with the person you’re talking to - it’s with the propaganda that has been spewed for decades. It can be hard for people to move past that, but studies show they are moving past it - so just keep working patiently!
2. People are seeing that introducing a legal cannabis market doesn’t mean “lazy, dopehead degenerates” take over the city.
In fact - here’s your periodic reminder that legal markets have produced several positive benefits for communities including: |
Eventually, I envision any type of cannabis propaganda to be a distant memory, so long as we continue moving in the same direction we’re headed.
It’s important to remember that some people aren’t necessarily against cannabis, it just doesn’t work for them & that’s totally fine.
55% of cannabis rejectors in BDSA’s report said they “didn’t like how it made [them] feel” while 45% don’t consume because it “doesn’t fit [their] lifestyle.”
However - 25% of those who are against it would consider it if a doctor recommended it and 20% would be open to consuming it if they got sick and cannabis relieved their symptoms.
The most important thing is for people who reject cannabis to see the good it brings.
I encourage cannabis operators to give back to their local communities as much as they can, as well as getting out there and meeting people - especially people who might disagree. Introduce yourself and tell your story.
Especially if you’re a medical consumer, you can really serve that roughly 25% of people who would be open to consuming cannabis for medical reasons - just by listening to their hesitations and sharing your story.
Listen when they tell you why they are against cannabis and understand that you might not change their opinion with one conversation. There are few things more powerful than civil, respectful discourse between two people who disagree.
That is how seeds are sown and people’s minds change down the line.
Cannabis brands: think long-term
Many cannabis brands aren’t looking ahead and will be swallowed by brands that are.
There’s a “get rich quick” mentality with many new cannabis brand executives who don’t know much about the industry. They are often the ones not thinking into the future.
Which is laughable, because when you know much about the industry, you know that we’re the furthest people away from “getting rich quick.”
Sure, there’s fantastic opportunities to make money in this space - but when people are waiting 2+ years to even be issued a license, getting rich quickly isn’t usually in the cards for cannabis operators.
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Once you arrive, you’re now appealing to the cannabis consumer. And we’re not an easy demographic to please, rightfully so. AND - we’re in a transitional phase. Now is the time to cultivate brand loyalty because it’s beginning to take root in legal markets.
It’s also time to get serious on your SKUs. If you’re offering multiple products in different form factors, understand that hitting the nail on the head with all of them will be challenging.
Consumers are beginning to know their preferences and sticking to them. Niche brands who focus on one form factor can oftentimes zero in on their consumer’s pain points better than brands trying to do it all - capturing & retaining market share.
Focus on your customer and what equals long-term profitability (meaning profit - not sales) for your brand. Get in front of your customer and deeply understand their needs and pain points.
That’s how you get and stay ahead from where we stand right now. |
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THE GREEN PAPER'S PERSPECTIVE |
1) Workers clash with the states over cannabis consumption TL;DR: A Florida Dept. of Corrections officer is suing after being fired for medical cannabis. It likely won’t hold up. TGP's Perspective: On the same day this story broke, a Nevada court ruled that off-duty recreational cannabis consumption is not protected under state law. The ruling specified non-medical cannabis consumption, but the reasoning is cannabis’ federal classification as a Schedule I substance. Medical cannabis has the same classification, there is no difference. So I think this reasoning could be used in other places, including Florida and this case with the correctional officer.
Also, The Florida Department of Corrections maintains a drug-free workplace policy, including prohibiting the use of “illegal drugs on or off duty.” This includes medical cannabis.
I don’t foresee the correctional officer winning his case, but I look forward to the day someone does. |
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Here are some jobs that I’m curating for the cannabis industry. Use this link to submit your role to be featured if you’re looking to hire.
Ruby on Rails Developer, ISA Corp:
ISA Corp is a market research firm focusing on cannabis and Web 3. It’s mindblowing to imagine that we are at a point in history where that’s a viable operation. ISA Corp is hiring an experienced Ruby on Rails developer to join their growing company. Read more about the role here! Senior Planner - Merchandising, The Parent Company:
With Jay-Z as part of the executive leadership team, working for The Parent Company will easily be one of the coolest experiences of your career. The Senior Merchandising Planner will come with 5-6 years of Merchandise Planning experience. Apply here! Sales Development Rep, Forian:
Forian houses BioTrack and Cannalytics - two of the most sophisticated pieces of cannabis software out there today. BioTrack reports directly to several state governments, cementing a reputable name for themselves already. Apply here! |
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What I'm Buying: Home stuff - I am ready to get my house functional and decorated/organized just how our family uses it. There’s a ton of disorganization and wasted space - which isn’t unusual for a family with 3 small kids 🤪
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What I'm Eating: We went to Chili’s yesterday and y’all - there was mold in the tomatoes in Tony’s pasta. And we NEVER COMPLAIN at restaurants. I always have better luck with locally-owned restaurants anyways, I’m sticking to that forever now 🤮
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Who I'm Talking To: Today is my mother in law’s birthday - so of course we gave her a call! She was just here visiting and we had a great time. Happy bday, Glamma! 🎉🎉🎉
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What I'm Up To: Tony is traveling to Vegas again next week for The Cannabis Conference in Vegas, so I’m flying solo with the girls again. I hope he has a great time! I’ll be in Chicago for Benzinga’s conference next month if anyone is going to attend.
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Thanks for the read and see you Tuesday. Let me know your thoughts on today's newsletter by replying back to this email! — Kaitlin |
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