“Your most unhappy customers are your greatest source of learning,” Bill Gates once said. Similarly, Ross Perot weighed in with, “You’d be amazed how many companies don’t listen to their customers.”
Clearly, purveyors of any consumer product – from toilet paper to automobile tires — have to stay on top of consumer trends. And cannabis entrepreneurs are no exception: A recent study by Digital Third Coast found that consumers are now developing preferences for not just what cannabis products to buy, but where to buy them. And those preferences go beyond the standard dispensary.
“Over half of all respondents think that cannabis should be available at their local pharmacies,” the Chicago-based cannabis research company found in its survey of 1,062 American adults. “Thirty-one percent want to be able to add cannabis products to their grocery lists.”
So, is cannabis coming soon to a supermarket, gas station or newsstand near you?
Digital Third Coast’s findings certainly support that outcome. New data supplied by Seattle-based cannabis research company Headset echoes and expands on this Digital Third Coast finding. “Sales of CBD-only products in U.S. recreational cannabis dispensaries have been dropping steadily over the last several years,” Headset reported. The company examined total sales of CBD-only edibles, tinctures, beverages, topicals and capsules in the earliest recreational cannabis markets: California, Colorado Nevada, Oregon and Washington.
It found that sales of these items dropped by 24 percent, from $75 million in 2019 to $67 million in 2020. “This group of products appears to be on track for another retraction in total sales in 2021,” the report said.
It added that in those same markets, the share of sales for CBD-only products within the subset of non-inhalable CBD-containing products declined from 16.8 percent in 2019, to 12.0 percent in 2020, and, in 2021 to date, 9.1 percent.
“This all indicates increased consumer purchasing at other channels such as online DTC and more traditional retail (grocery/drugstores health food stores, pet stores, etc.),” Headset Headset senior data analyst Cooper Ashley wrote in a statement explaining the data.
“This is not surprising, given that those other channels may already be a part of a CBD-only customer’s daily routine and – unlike cannabis retailers – they typically do not require a form of identification to enter or make a purchase,” Ashley wrote.
Also on the topic of consumer preferences was Headset’s finding that the CBD/THC ratio of the products that are selling well is important. The ratio to watch, Ashley wrote, “is certainly the group of products Headset labels as ‘THC heavy.’ These are products that contain more THC than CBD, such as Plus Products line of gummies.”
Sales of “THC Heavy” products in the non-inhalable product categories grew by 53 percent, from $51 million in 2019 to $78 million in 2020, Ashley wrote. “The market share of this ratio group within the recreational CBD landscape is growing fast,” the analyst wrote. Market share, in fact, has risen from 11.4 percent in 2019 to 16.4 percent in 2020, and that growth so far in 2021 stands at 22.8 percent, he noted.
“This will be an important ratio group to keep tabs on as more and more brands are using a small amount of CBD in a THC-dominant product to create and market a selection of mood-based experiences,” Ashley concluded, bolstering yet another familiar quote about shoppers: The customer is always right.