Data from legal U.S. cannabis dispensaries shows consumers willing to indulge in products containing THC give the highest priorities to convenience of use and a predictable experience.
Convenience explains why cannabis vaping products encompassed 67% of dollar sales at legal dispensaries monitored by BDS Analytics midway through 2019.
“The form of the product matters for consumers both new and experienced when they’re considering consumption of cannabis,” BDS vice president of consumer insights Jessica Lukas said in a June presentation at BevNET live.
At the time, legal sales of cannabis vaping products had been growing by about 70% year over year, according to Lukas. Since then, vaping of THC has come under a nationwide microscope given an outbreak of lung ailments, leading the Centers For Disease Control to recommend that consumers “not use e-cigarette, or vaping, products that contain THC.”
While THC-infused edibles certainly offer convenience, their effects have been less predictable than vaping because the human body responds differently to the psychoactive compound based on how it’s delivered.
“Consumers are looking for a controlled and dosed experience,” Lukas explained in her presentation. “The intention for a lot of people is not just to get so high they can’t get off the couch. They want to have a functional experience. This drives consumption.”
Almost 30% of edibles consumed were low-dose products — under 10 milligrams — because “it gives them control.”
Which leads to the two biggest hurdles to overcome when marketing products containing TCH to people who don’t already use them. First is that they don’t see it as fitting in with their lifestyle, followed by “they don’t know how it makes them feel, likely driven by a past bad experience” with edibles.
Armed with this knowledge, many dispensary brands make packaging claims that promise specific effects — among them energy, focus and relaxation.
“Again, consumers are buying products for a specific experience and thus this is working because it simplifies something that is very complex,” Lukas said.
According to BDS Analytics data from dispensaries in Arizona, California, Colorado, Nevada and Oregon, less than 10% of edibles sales were beverages, which is “still a very small marketplace in the dispensary channel.”
While 12 to 20-ounce beverages have been the norm, big inroads are being made by cannabis-infused teas and water soluble powders like Ripple, which can be added to the beverage of one’s choice.
However, what companies might learn about the marketing of cannabis and cannabis-infused products to date can’t necessarily be derived from what’s happening in legal dispensaries. For example, Kikoko, the #1 cannabis beverage in California, claims its products make everything from sleep to sex better.
Lukas predicted that the federal government will legalize cannabis in 2020, at which point states will still be able to control what happens within their borders. But the U.S. Food & Drug Administration won’t allow the same types of wellness claims that are now perfectly valid in dispensaries.
“You won’t be able to slap [the words] ‘calm’ or ‘sleep’ or ‘relax’ or ‘focus’ on a package unless you have testing to prove that,” says Lukas.
Meanwhile, individual states have been deciding whether legal vaping products can still be sold, creating a patchwork that will probably continue until the CDC has more solid evidence on the cause of the lung ailments.
MedMen, which operates 32 cannabis stores in nine states, said in a recent earnings report that in California and Nevada between January and March of 2019, 35% of its sales mix was vape, compared with 33% for flower (cannabis buds).
“Since the beginning of August, we’ve seen absolutely no decline in retail sales,” said Chief Financial Officer Zeeshan Hyder. “We did see a slight decrease in vape sales, but it was offset by an increase in other categories such as pre-rolled and edibles.”