Cannabis: In its short history of being a regulated substance in parts of the United States, many already consider it to be a staple of American culture. However it remains in many ways as nebulous and hazy as the smoke clouds people so often associate it with. The combination of long-standing stereotypes surrounding cannabis and lack of research and data on the social elements and implications of its use have led to a surprisingly high amount of misinformation. In order to address this lack of accurate information at its roots, NorCal Cannabis Company conducted a quantitative study of over 1,500 California residents to determine why such a lack of information exists and to de-mystify a few common misconceptions in the process.
Before diving into the data analysis, one more introductory question must be asked: Why California? California is on the forefront of the massive change occurring in cannabis markets around the world. Like other U.S. states, and other nations, who are moving fitfully but inexorably from prohibition to regulation, the California cannabis market is in the midst of a rapid evolution.
By any measure, California is the world’s largest cannabis market experiment. It has a population of 40 million residents, and a GDP which would make it, standing alone, the fifth largest economy in the world. For decades, California’s “Emerald Triangle” of three Northern California counties has been the country’s main domestic supplier of cannabis, and cannabis has been available with a doctor’s recommendation since Proposition 215 passed in 1996.
Since recreational cannabis was legalized by referendum in January 2018, based on a 2016 ballot measure, growth in the regulated cannabis market has been exploding. California is important because of its market size, but also because of its role in creating and exporting dominant companies and brands in emerging industries. At NorCal Cannabis, we believe that brands that win the California cannabis market will be best positioned to win U.S. market and beyond.
Myth #1: Recreational users get high for fun, medical users are focused on their own health.
Given that legal cannabis sales are largely broken up into “Recreational” and “Medical,” it would be easy to assume that consumers use the substance purely for one or the other: to have fun and party, or help treat diseases and ailments. The reality is that consumers use the substance for more than just “Column A” or “Column B.” But, surprisingly, there is little good data to answer that question in detail. NorCal’s study, however, shows that a majority of consumers use cannabis for physical and mental wellness. For example, when asked why they use cannabis, 69 percent of respondents say that they use cannabis “to help me relax.” The second most popular choice was “to help me sleep” (61 percent), followed by “to relieve pain” (56 percent), and “to feel less anxious and depressed” (46 percent).
Decades of propaganda and disinformation about cannabis have left behind a powerful social stigma. Depictions of cannabis usage in government-sponsored anti-drug messaging and portrayals of ‘stoner culture’ in popular media have created lasting stereotypes and assumptions about who uses cannabis and why. Our data, however, shows that cannabis is not used primarily for fun, but rather for physical and psychological relief and wellness.
Myth #2: Women are an emerging market segment of new cannabis consumers.
The reality is that women already use cannabis as frequently as men. However, there is a key differentiator in the fact that women use cannabis for different reasons than men. For example, when it comes to how many people use cannabis to aid with sleep, women outnumbered men, 68 percent to 58 percent. Consequently, they are more likely to consume cannabis before bed. Additionally, differing biology creates a different type of usage: 56 percent of female cannabis users aged 21-45 use cannabis to treat menstrual cramps, while 31 percent of women aged 45-54 use it to treat symptoms related to menopause. A fully mature cannabis market will need to address men and women in equal measure, but can and likely will evolve in unique pathways in order to address the differing needs and desires of each sex.
Myth #3: A handful of brands are dominating the California cannabis market.
Given its relatively long-standing history with the substance and geographic size, it’s easy to assume that California has the U.S. cannabis sector under its thumb. As it turns out, despite its size and amount of time in the cannabis space, there is currently no California cannabis brand with a widespread following. BDS Analytics, a company which tracks cannabis sales, tracked almost 15,000 different products for sale in California, including 4,060 vape products, 2,983 edible products, and more than 200 cannabis beverages. Despite this flooding of products, however, 41 percent of our survey respondents disclosed they had no favorite brand, indicating that there is a significant opportunity to build brand awareness, trust, and loyalty with consumers.
One possible reason for this is that overall consumer knowledge of cannabis brands is also quite low. When asked in open-ended format to name ANY brand of cannabis, only roughly one in three could. Another likely contributing factor to low cannabis brand engagement is that these brands are fairly new. The cannabis strain market simply has not existed long enough to entice consumers to focus on and remember particular brands, meaning that brand recognition and brand loyalty present companies with two incredibly important factors to focus on as the market continues to expand.
Myth #4: All Californians have access to legal cannabis
Despite what the average individual may assume, California is not an idyllic oasis, providing access for all who step foot into the state. In fact, it’s quite the opposite – California is a “Cannabis Retail Desert.” The numbers show that despite California’s high association with cannabis, consumers still face inequality in their ability to access safe, regulated cannabis. Despite a state-wide referendum in which voters approved legalization of recreational marijuana, 80 percent of municipalities in the state of California have banned physical cannabis stores. Additionally, 40 percent of the state’s population lives at least 60 miles from the nearest cannabis retail store, giving further credence to reality of California being a Cannabis Retail Desert.
This inconsistent access has driven many consumers to source cannabis from private illicit market dealers. When asked why, an overwhelming 74 percent of those surveyed responded with, “It is the most convenient option for me.” This knowledge, combined with the understanding that the majority of California cannabis consumers use the substance for a number of physical and mental wellness purposes, means that the Cannabis Retail Desert represents an obstacle for widespread availability and a serious impedance towards those who rely on cannabis for their health and wellness needs.
Myth #5: Consumers are migrating from dispensaries to deliveries.
Rounding out this list of myths is the all-too common misconception that consumers are drifting solely towards delivery services to procure cannabis. While the food industry may be trending towards that in recent years, this study has shown that most consumers want the experience of retail, and the convenience of delivery, working together. In fact, 92 percent of those surveyed cited “knowledgeable staff” as the most important aspect of a dispensary. This shows that cannabis users have a great attachment to the act of entering and purchasing products from a physical retail store. That said, 60 percent of those surveyed wanted to be able to pick up an order from a dispensary after ordering it online in advance, showing a considerable market for those who prefer their ordering and delivery to be done digitally.
What this boils down to is the fact consumers don’t want one thing or the other – they want both options. Synthesizing the experience of walking into and making a purchase at a store, with the practicality and convenience of online ordering and service, will greatly benefit dispensaries as they navigate the cannabis market’s evolution. Providing consumers with an omni-channel experience that is both high-touch and efficient is a smart, if not essential, way to adapt to the ever-morphing cannabis space.
To conclude, a considerable amount of misinformation has plagued the cannabis market in its infancy. From outdated stereotypes, to a prior lack of substantial and focused data and research on cannabis consumers, it’s easy to see why. With this most recent study by NorCal, however, it has become evident that the cannabis industry can and will meet its full potential – but only when it discovers and serves the many needs of all of its wide array of consumers. California may serve as a great case study for consumer research on this front, but it’s merely the tip of the iceberg for an industry on the cusp of widespread growth across the nation.