Public support and acceptance for the legalization of adult-use cannabis is becoming increasingly mainstream. The consumer base, product preferences, and buying trends are changing rapidly as this happens. If you’re a retail marijuana business, it’s important to stay on top of these ever-changing trends so you can cater to your customers’ needs and keep your business thriving. Here are a few of the most important cannabis consumer trends to watch for in 2022.
As more state legalization bills begin to pass, the consumer market starts to diversify. Cannabis consumer behavior changes as cannabis will become less taboo and a more diverse range of demographics take part in the cannabis market. As the cannabis industry matures and gains legitimacy through legalization, its services and products should reflect the expectations of consumers.
In the past, pop culture and the media painted a picture of the average cannabis consumer as being young, lazy, and messy. But this is far from the truth. According to one study, about 88% of cannabis consumers identify with a new cannabis culture: sophisticated, professional, and productive In fact, millennials are by far the biggest age demographic among cannabis consumers.
At the same time, we can see that Gen Z’s market share continues to grow. This shows how diverse the range of customer segments for cannabis companies are, ranging from Gen Z to Baby Boomers. Different customer segments tend to favor different marijuana products and show different consumption patterns, for example, younger consumers tend to purchase more concentrates than older age demographics.
We believe that identifying and focusing on and targeting specific consumer segments based on local market analysis will significantly impact your cannabis business’s success, as it allows you to cater to each marijuana consumer’s unique needs. Examples of great customer segments to focus on are:
Medical Marijuana Patients: These users treat cannabis as a medicine and use cannabis for its health benefits. Usually, they consume cannabis to treat illnesses such as body pain, insomnia, and anxiety. These individuals are usually not looking for fun and exciting products like the latest infused cannabis beverages. They’re looking for practical items that are deemed essential for their conditions, and have a clear and easy form of use that can deliver exact dosages.
Try offering hybrids (CBD and THC) or Indica strains (just THC), as it is known to calm and provide full-body relaxation. While no industry is truly ‘recession proof’, the medical marijuana industry may provide greater protection from the economic ‘downturn than most others. Even if recreational adult-use consumption drops medical marijuana users will likely continue purchasing the product as is typically found with other medicinal products.
Professionals: Nearly 85% of cannabis consumers are employed full-time. The people in this demographic are more focused on careers, family, and potential health benefits rather than using cannabis for social gatherings or parties. In general, professionals are more attracted to cannabis brands that market the mental health benefits of cannabis to overall wellness (as opposed to the acute treatment for serious illness). They prefer an education-based approach to marketing, highlighting products based on data and case studies. Because they usually want to keep a professional relationship with marijuana, make sure to keep stock of quality paraphernalia.
Creatives: Artists and other creatives use cannabis to enhance their concentration and creativity. This demographic is what new frontier data calls “Contemporary Lifestylers” as opposed to the next type of casual user which they term – engaged explorers. Because of this, these consumers usually go for Sativa strains, as it is known to provide energy and increase productivity. In addition, they are also willing to explore new ways of consuming cannabis, such as cannabis-infused beverages. Try marketing to these individuals by inspiring them with success stories of people who used cannabis to their benefit and with new exciting marijuana products.
As we mentioned, the legal marijuana market is changing rapidly, and so are consumer preferences. Over the past year, marijuana e-commerce has been a prevalent force in the industry, especially during the COVID-19 pandemic. Online cannabis retail sales have skyrocketed, and are expected to grow. Many consumers are attracted to the convenience and ease of online ordering, so many businesses have incorporated e-commerce software into their websites. Online retail may allow you to be more reactive to industry trends and maintain an inventory that consists of popular product segments. Especially as the customer base keeps growing, you will start to see more variety in what sells well.
For example, vape pens are one of the most popular cannabis products today, and based on research their popularity will continue to rise. The type of cannabis consumer that is attracted to this product is typically younger people who want a quick, easy way to smoke cannabis with the ease of concealability. In addition, in some states, they are the only allowed form of smokable marijuana, which many customers still prefer. If a specific strain of vape pen is doing well in your store, you might want to market similar items and maybe suggest new, exciting products alongside it with a sale.
Another product group that has steadily gained popularity during the past years is edibles, such as gummies. Edibles are especially popular with customers who are new to cannabis products due to their convenience and consistent dosage. As the consumer base grows, it can be beneficial to cater specifically to new consumers.
Besides focusing on already popular products, we recommend also keeping an eye on upcoming trends in the cannabis industry. For example, cannabis-infused beverages are an up-and-coming product group that we might see gain popularity in the coming years. Doing market research on the next big cannabis consumer trend allows you to prepare for customers’ demands and stock inventory with new exciting products.
Even without federal legalization, cannabis sales are predicted to exponentially grow, with 2022 predicted to be near $30 billion. Retailers within the cannabis industry are noticing this trend, which brings a competitive edge to drive in prospective customers. As the legal cannabis industry continues to thrive, you will have to compete harder for your customer’s attention and business.
On average, people spend between $25-$50 per trip to the dispensary, with a small portion of customers spending $10 or less, usually picking up a single item like pre-rolls or vape pens. For many, choosing their dispensary comes down to who has the better sales. To attract more customers, you must appeal to a wide audience and market effectively to reach them.
Many dispensaries offer daily specials to keep customers engaged with their products, which in turn incentivizes the consumers to try new products and expand their taste within the recreational cannabis space.
You can offer promotions of specific cannabis products (flower, edibles, pre-rolls, etc.), time of day, or special events. Popular promotions include birthday discounts, referral discounts, first-time customer sales, and holiday sales. A great example of this is 4/20 sales. According to this study, marketing campaigns, via channels like SMS, can have a relative sales increase of up to 121%.
Feedback is important, and what keeps your business relevant, exciting, and fresh. The marijuana industry prides itself on being welcoming to all types of people: newbies, experts, old-timers, and more. Online reviews are a valuable way of boosting your online presence and credibility. This helps you to stand out amongst competitors. Especially new cannabis consumers can rely heavily on customer reviews when shopping.
Studies show that a potential customer places value on the number of reviews, rather than the contents of the review itself. Encouragement for leaving reviews can elevate cannabis businesses by making it more appealing for customers searching for a local shop. You can reward customers for leaving a review by offering coupons or discounts. In return, satisfied customers will be more inclined to leave a positive, thorough review that will boost your visibility in the market.
We understand that it’s inevitable there will be a customer with a bad experience at your shop. It’s best to handle the response promptly, offering a resolution to the problem at hand. Cannabis consumers are often guided by the presence and hospitality of the dispensary they shop at, so it’s important to demonstrate that in every aspect of your business.
We encourage you to also track non-retail cannabis market trends, as they influence the industry and reflect on customer behavior. According to studies, marijuana consumers value sustainability more than the average consumer. We believe that aligning your company values with those of your customers is a great approach to take. It helps to appeal to consumers and is also a responsible and sustainable way to run your company.
One topic of importance that is emerging in the cannabis industry is the focus on water conservation and sustainable practices. Cannabis cultivation requires a high amount of labor, water, nutrients, and more. Especially in states like California, more efficient ways to grow cannabis to curb water usage are important considering 2021 was the driest year on record. We anticipate that operators who want to stay ahead of the upcoming changes will take steps toward more energy and water-efficient cannabis business. For example, water restrictions could profoundly impact the commercial cannabis industry. Luckily, actions to lessen carbon emissions, and restrictions on electricity have already been implemented. Supporting sustainable operators and practices will communicate your company values to customers.
Brands are moving their operations to these newly-established states to replicate their success nationwide. For instance, DogHouse Cannabis, a brand from Oregon, expanded its resources into Michigan to capitalize on the fresh market with few cannabis brands’ insight. As cannabis legalization keeps progressing and new markets emerge as more states push to legalize marijuana we anticipate seeing many cannabis companies have the option to transform their operations and become multi-state operators.
Also, as the push for cannabis legalization continues, markets in newly legal states have a vast amount of untapped potential. Many states such as Ohio and Delaware are currently progressing toward legal marijuana. In addition, federal legalization is looking more and more likely as the MORE act, which would remove marijuana from the Controlled Substance Act and decriminalize cannabis federally, passed in the House. Although the act is likely to face tough opposition in the Senate, it is still a step towards federal legalization.