Brands looking to capitalize on future market growth need to look at how consumers are behaving today.
By Brian MacIver
Needless to say, the American cannabis market is booming (although inflationary forces may have something to say about that as consumer wallets get tighter). New adult-use markets are coming online, medical markets are expanding, and many of those changes are being done through voter-led ballot measures, showing the grassroots support the cannabis industry enjoys after decades of prohibition.
These industry-expansion efforts are yielding large returns. By the end of 2022, the total U.S. cannabis market is expected to reach over $30 billion in annual sales, a figure set to grow to $51.7 billion by 2027, according to Brightfield Group data, for a compound annual growth rate (CAGR) of 15.4%. Adult-use sales are expected to make up the bulk of sales by the end of Brightfield’s forecast period, reaching $37.3 billion and a CAGR of 11.5%.
The bulk of growth over the forecast period is expected to come from states that recently legalized or are set to soon legalize adult-use: New Jersey, Pennsylvania, New York and Ohio, to name a few. These large population centers will cause a boom to legal cannabis access, and divert even more revenue from the illicit to regulated market.
As consumers in those states start navigating the legal cannabis market and learn about various product types, a look at consumer trends today can give us a glimpse into what may be coming down line for these upstart markets.
The Queer Side of Cannabis
According to Brightfield’s Cannabis Consumer Survey data, 20% of US cannabis consumers identify as LGBTQ. For context, Gallup pegs LGBTQ people at 7.1% of the total US population.
This historically underserved consumer segment can present an excellent marketing opportunity for savvy brands who understand how to communicate to them, especially since they typically are more likely to consumer cannabis multiple times per day compared to their cisgendered counterparts. More than half (52.2%) of LGBTQ consumers reported consuming cannabis products several times per day in Q1 2022. Meanwhile, only 43.5% of heterosexual consumers reported similar rates of use in the same period.
LGBTQ consumers also consume more product types, making them some of the heaviest, most product-diverse consumer segments in the market. About 68% of LGBTQ consumers reported using flower in Q1 2022 (60% for heterosexual consumers), 55% reported pre-roll use (vs. 44%), 49% used pre-filled vape cartridges (vs. 41%) and 32% reported using raw concentrates (23%).
This high cannabis usage can be correlated to the LGBTQ population’s higher reported incidence of mental health issues. These consumers also are more likely to be using cannabis to help treat those conditions. The top indexing conditions LGBTQ consumers live with include: ADHD (~2x more likely as to live with and treat with cannabis as heterosexuals), PTSD (~2x more likely to live with and treat with cannabis as heterosexuals), and anxiety (~50% more likely to suffer from and treat with cannabis as heterosexuals).
Brands looking to tap into this consumer group can do so by being attentive to these needs and offer solutions and product recommendations that meet them where they are. While it may be difficult for brands to target medical needs effectively in the current regulatory climate, connecting with budtenders and offering them training and education can help them have those customer conversations, which, in turn, could lead to boosted sales.
Consumers who partake first thing in the morning (colloquially referred to as “Wake n’ Bakers”) are at the top of most cannabis brands’ target list, as these consumers generally have very high usage rates and spend more per month on cannabis products (36% spent more than $351/month on cannabis vs. 23% for all consumers in Q1 2022).
These consumers are likely to be female (52% of WnBs are women) and just under two-thirds are under 40 years old—brands looking to build long-term loyalty with consumers should be mindful that the stereotypical “stoner bro” persona is quickly becoming a thing of the past and better market to these young women.
Wake n’ Bakers are much more likely to use inhalable products like flower, pre-rolls, and dabbable concentrates—in fact, they were nearly twice as likely to use products like shatter, wax and live resins compared to all consumers in Q1 2022. Interestingly, gummies, a rapidly growing product type in the cannabis market, are growing faster among the general cannabis consumer population than these heavy consumers, a sign of Wake n’ Bakers preference for inhalable products.
Perhaps obviously, these perpetually intoxicated consumers over-index on all occasions of use compared to the general population, a rising trend compared to both Q4 2021 and Q1 2021. Leveraging need-state positionings (“great for cleaning your apartment,” or “get in the gaming zone”) can help these intentional consumers better find and use a brand’s products, as well as help foster brand loyalty.
Cannabis consumers turn to the plant and all of its formats for a litany of reasons, and old stereotypes no longer apply to this increasingly diverse population. Thinking of cannabis consumers as non-monolithic can help brands better identify trends and opportunities, and help them differentiate themselves from competitors.
While current regulations hamper brands’ ability to communicate their benefits directly to consumers, building awareness and favorabilitywith budtenders can be a great way to reach these narrower, but potentially lucrative, consumer segments.
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