Legal marijuana faces hurdles not seen in other billion-dollar industries, but market research into consumer buying patterns and product development is making headway, dispelling myths about the typical marijuana consumer and giving insight into the cannabis consumer’s tastes.
In one study by New Frontier Data, analysts discovered that cannabis consumers are gravitating towards edibles and concentrate products, but moving away from flowers.
Demand for recreational cannabis flowers dropped 21 percent in 2016, and similarly in the medical marijuana market with a 22 percent decline. Conversely, recreational demand for concentrates saw an 11 percent increase, and a 17 percent increase among medical marijuana consumers. There was also an increase in the sale of pre-rolled joints, from 1 percent to 8 percent.
John Kagia, New Frontier Data’s VP of industry analytics, attributes these changes to a market that is operating “in the light of day,” and able to develop new products and methods in a legal environment.
“Concentrate-filled vape pens and sophisticated, dosed edibles simply weren’t available in the illicit market,” Kagia told The Cannabist. “Pre-rolled products have gone from an afterthought filled with leftover cannabis to a premium product made with high-end strains and sold in elegant, easy transport packages.”
Kagia also mentioned that concern for the health effects of smoking and discrete consumption could account for the increased demand for these products.
“You can smell a joint from a mile away, but vaping offers a discreet way to consume,”
he said. “Our society has also undergone a radical transformation in our views towards smoking tobacco, so the perceived benefits of vaping rather than smoking may also be one factor for the market shift.”
Edibles and other cannabis-infused products offer another way to discretely consume cannabis. Within this product segment, recreational sales outpaced medical sales by 300 percent during the first six months of 2016.
But medical marijuana patients are still spending. A decline in patients enrolled in Colorado’s medical marijuana program was expected when the state legalized recreational cannabis, but medical patients have brought balance to the market by purchasing premium edibles and concentrates. Overall, there was a 12,957 decrease in the number of registered medical marijuana patients from December 2015 to December 2016, but the taxes collected from patients during 2016 stayed consistent.
Research also showed that medical patients spend more than recreational consumers, and spend three times more overall. A second study was conducted by New Frontier Data, which collected data from over 300 markets across ten states. Medical patients made a purchase of $136 every 10 days, while recreational customers made a $49 transaction once every 14 days. According to Kagia, medical patients tend to purchase a single product in large amounts, while recreational customers tend to buy smaller amounts of a variety of products.
Beyond recreational and medical marijuana consumers, stakeholders in other industries are interested in the buying habits, purchasing power, and the overall demographics of cannabis consumers.
BDS has started tracking consumer trends in Colorado and California’s markets, and their research shows these markets are as diverse as they are large.
“We’re seeing some real differences between men and women, age groups, generations, attitudes and preferred methods of consumption,”said Linda Gilbert, who is leading this research for BDS.
said Linda Gilbert, who is leading this research for BDS.
For instance, men tend to use cannabis to unwind and socialize, whereas women tend to use cannabis to relieve stress and menstrual symptoms. Beyond that, cannabis users tend to be more active, are more likely to participate in outdoor activities, and are more likely to go to the gym regularly compared to non-users.
All of this research helps companies inside and outside the cannabis industry reevaluate how they approach cannabis consumers. “That’s one of the things that’s been really fascinating to me is how much it becomes part of a routine and lifestyle,” said Gilbert. “But it’s not a couch-potato lifestyle, it’s a healthy lifestyle.”
The premier boutique cannabis symposium, Cannabis Grand Cru, returned to Seattle in March for the first of multiple 2016 events. The Cru took over three venues around the city including the Fremont Foundry for Saturday’s main event.
The event opened with a Friday-night screening of “Evergreen: The Road to Legalization” at Central Cinemas, sponsored by local extraction company, Evergreen Extracts. The documentary chronicled the industry-driven controversy surrounding Washington’s 2012 legalization initiative, I-502. After the movie, the select group of attendees were given the opportunity to ask questions of the film’s director, writer, and producers.
More than 400 cannabis enthusiasts and curious onlookers joined nearly 50 speakers for a day jam-packed with education, networking, and fun. Having spoken at every Cannabis Grand Cru including the Inaugural Aspen event in November 2014, I am impressed with the constant improvements being made to the series — especially given the high caliber of the first one.
In an industry that is flush with expos and conferences, it’s often hard for us to decide which to attend. The Cannabis Grand Cru’s high speaker-to-attendee ratio, once again, provided an intimate atmosphere for networking and interaction.
Session topics varied from products and branding to legislation and advocacy, to our staple Cannabis Technology panel.
AC Braddock agreed that the event provided “much higher quality networking as the event is smaller and more intimate.” Braddock, who is the CEO of extraction-tech company Eden Labs, spoke at her second Grand Cru on “The Future of Extraction Technology” panel.
While networking is an integral part of any industry get-together, CGC also focuses on education. Ettalew’s Edibles CEO, Alison Draisin, said her favorite part of the event was “educating new people about the power of the plant.” Draisin was also speaking at her second Grand Cru, and was part of the “Cannabis Infused Journey Through Culinary Pairings”, a live cooking demo where they discussed terpene-pairings of cannabis and food, as well as antidotes for when you’re too high.
The final sessions of the day featured the “Four Horsemen of Washington’s 502 Legislation” on a panel about the state’s legal landscape on the main stage. Alex Cooley of Solstice Grown was joined by Aaron Pelley, Josh Berman, and Brian Caldwell to discuss current concerns surrounding the transition from medical to recreational cannabis and the future outlook on legislation in Washington.
Up in the penthouse, I was joined by my close friends and colleagues in our CGC-regular discussion about “Cannabis Technology, Data, and Analytics.” Cy Scott, Marie Veksler, Stewart Fortier, John Kagia, and myself convened to emphasize the importance that technology and data play in the legitimization and progression of the cannabis industry.
Once the day’s programming ended at 7:10pm (aka dab o’clock), the speakers and select attendees headed to the closing afterparty at Georgetown’s Brass Tacks which was sponsored by Calyx King, Whaxy and Pelley Law Group. The party allowed me to catch up with Grand Cru regulars like Addison DeMoura, John Hunt, and Sheriff Joe Disalvo of Pitkin County, as well as some new faces. We enjoyed the night over delicious food, beverages, and smoke.
The next day we all packed up and returned to our respective home cities. I know I am not alone when I say that I cannot wait until the next Cannabis Grand Cru.
Alison Draisin agreed, “This is a great group and I excited to work with them in the future!”
As cannabis legalization continues, the agricultural needs of cannabis are becoming more apparent.
A new report from the data firm New Frontier studies the long-term implications of energy consumption due to the cultivation of cannabis.
“Marijuana is the most energy-intensive agricultural commodity that we produce, and that’s largely because of the very high energy costs associated with its cultivation and production indoors,”
said John Kagia, director of industry analytics for New Frontier, to the Washington Post.
“We wanted to focus on this issue of energy use in the marijuana industry because we think it is one that is going to have very significant long-term implications.”
The new report suggests that the marijuana industry consumed one percent of the nation’s electricity.
Growing marijuana on an industrial scale requires massive amounts of electricity to control light, heat, humidity and HVAC conditions in indoor growing operations. While there are climates in the United States that can support marijuana growth, local and state laws often restrict outdoor growing operations. “There are some environments, by regulation or because of the environmental conditions, you would not be able to,” said Kaiga. While outdoor conditions might seem ideal, pest control becomes a significant issue, and has already caused product recalls due to the presence of pesticides.
To conserve energy, experts have been recommending legislation and incentives for growers to use clean energy, like solar energy and LED lighting.
“To date, they have still not been able to surpass the cost performance threshold offered by existing lights, but we are getting there, and we think this innovation that is happening around the lighting sector is one of the ways that this industry will be able to decouple itself from this extremely high energy use,”
In the meantime, Colorado and other states are taxing growers for excessive energy use. Even with the added costs, growers are still able to make a profit. However, that could change as more states legalize marijuana. “Currently, energy accounts for approximately half of the wholesale prices of marijuana, and as those prices fall, the share of energy and the total production cost will continue to increase,” said Kaiga. If falling prices are not an incentive for growers to change their methods, marketing cannabis products made with clean energy could entice consumers who are environmentally conscious, as it has in other industries.