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Posted by AGORACOM-JC at 4:30 PM on Monday, July 29th, 2019
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Who are the future cannabis consumers?

By Sydney Perelmutter

  • An Ernst and Young (EY) report released in April projects that by 2025, 20 percent of the Canadian population will be cannabis consumers and the size of the market (legal and illegal) could reach up to $11 billion.

The size of the cannabis market (legal and illegal) could reach up to $11 billion by 2025. Getty Images

Cannabis consumers have certainly come a long way since the flower-toting, tie-dye-wearing hippies or the weed-smoking, Cheech and Chong-watching stoners of decades past.

The stereotypes often associated with previous eras of cannabis use seem far less pervasive today, with current, sometimes-surprising consumers hitting more demographic markers. Here’s what recent figures and experts have to say about what this new wave of consumers could look like.

What do the numbers say?

The latest National Cannabis Survey (NCS), released in May, indicates that 5.3 million or 18 percent of Canadians aged 15 or older used cannabis in the first quarter of 2019, up four percent from the same quarter of 2018. This increase can be partially attributed to greater use among male respondents (from 16 percent to 22 percent) and people aged 45 to 64 (from nine percent to 14 percent).

The NCS data also shows an increase in the number of new cannabis users, some being first-timers and others former consumers who sought out cannabis again post-legalization.

Statistics from the National Cannabis Survey, 2019 Statistics Canada

A Pollara survey of about 2,000 people, released in March, notes those who bought legal recreational weed over the last year are likely to do so again in the coming year. In fact, purchasing legally is expected to be twice as popular as buying illegally, with 69 percent of respondents indicating the former and 31 percent indicating the latter.

An Ernst and Young (EY) report released in April projects that by 2025, 20 percent of the Canadian population will be cannabis consumers and the size of the market (legal and illegal) could reach up to $11 billion.

Are there archetypal consumers?

An Early Look Into Consumer Profiles is a report jointly released by Toronto-based Lift & Co. and Washington-based Headset Inc. in early June. Based on 862 recreational customer receipts and 347 respondents on Lift & Co.’s website, the report divides consumers into two main segments: the experienced user, the so-called connoisseur, and the new user.

Matei Olaru, CEO of Lift & Co., suggests that the connoisseurs of the Canadian market tend to be male millennials who know what they’re looking for, while new consumers tend to be 45 and older and require some guidance before purchasing product.

Deloitte LLP released a report leading up to the second wave of legalization—expected to take effect in October, with edibles, topicals and concentrates likely available in December—that classifies current recreational users as “risk-takers” and likely post-legalization users as “conservative experimenters.”

Deloitte’s new and likely user profiles Deloitte

Jennifer Lee, partner and national cannabis sector leader at Deloitte, explains that the risk-takers tend to be less educated and more willing to deviate from the law, while new-to-category consumers tend to be highly educated and have a higher income.

“The new consumers aren’t your typical quote-on-quote ‘stoners’,” Lee says of the conservative experimenters. They tend to be “family people” between the ages of 35 and 54.

Who is buying what?

New users are spending considerably more on balanced and lower-THC products (less than 19 percent THC), while experienced users spend more on higher THC products (over 20 percent THC).

THC percentage chart Ontario Cannabis Store

The Lift & Co. and Headset report shows younger buyers are spending less per purchase (averaging $55) and more on individual items (averaging $24). Buyers aged 55 and older are spending more per purchase (averaging $157), but buying more items at lower price points.

“If we look at what people are buying by age, we see that the older demographic disproportionately buys more oil than flower,” Olaru says. “So there’s an inherent prediction there that as new consumers come on, they will probably buy non-combustible products, such as edibles or beverages.”

Lee predicts that carbonated beverages and teas will be of interest to likely users, which she attributes to the trade-off between alcohol and cannabis.

“We found that usage occasion for cannabis is almost exactly the same as alcohol among older consumers,” Lee says.

Differences in what people buy, Olaru estimates, can be ascribed to experience with cannabis and income. “You can make an educated inference that millennials probably have less disposable income, so they buy fewer products than an older consumer,” he says. “If you look at the older, first-time demographic, they might not know what is good or bad, and believe higher price points equate to better products.”

Are the “canna-curious” the next untapped market?

A report co-authored by Lift & Co. and EY, released in June, reveals four broad consumer segments based on a survey of nearly 3,000 Canadians: pure recreational, pure medical, health and wellness and those who remain unconvinced. Dubbing them the “canna-curious,” Olaru thinks the skeptics can be converted.

“Even the unconvinced say they would still consider cannabis if it could help with something like pain relief. So to us, that says even the unconvinced are looking for some sort of relief or wellness, not for recreational use to party and not pure medical, but somewhere in between,” Olaru says.

The canna-curious, he predicts, will be more open to products that are lower in THC, higher in CBD and non-combustible.

Can the future cannabis consumer truly be defined?

Jenn Larry, president of CBD Strategy Group Inc., says there is “no ceiling on who will be interested in cannabis in the future because all cohorts could find themselves interested.”

Larry understands that consumers are divided into segments for marketing purposes, but says that there will always be a spectrum of groups. She identifies three groups that often go unnoticed by marketers: baby boomers, ‘the dad’ and 33- to 45-year-old females.

“Cannabis provides consumers with an intimate experience, but different people want different things so there’s no reason to limit who the consumer could be,” Larry says.

“I think the cannabis consumer is yet to be defined,” Olaru notes. “That’s really the big opportunity in cannabis.”


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