Michele Scott is a Senior Research Analyst at Mintel. Michele focuses on US Cannabis reports.
With Illinois bringing the number of US states with legalized recreational marijuana to 11, more companies and brands than ever are considering if and how they enter and navigate this new market. Luckily, we’re here to guide them!
First things first, here are four insights brands should consider when weighing their options on whether or not to make a move into marijuana.
1. Don’t expect a barrage of new users in the early days
The recreational cannabis user base is not likely to explode overnight. In the states that were recreationally legal in 2019, more than a quarter of those aged 22+ reported cannabis use but only two in five said legalization made them more likely to consume cannabis. This indicates that while being on the right side of the law is good, it isn’t necessarily a catalyst for participation. However, the quarter of “cannacurious” consumers and one-fifth of those who are still on the fence about trial/use are salient groups; this points to a potential increase in the user base over time.
Our research shows that the current user base is dedicated with three in four saying they consume cannabis at least weekly. Connecting with these consumers on a number of levels can be lucrative for brands.
2. Distinct consumer groups require distinct strategies
Experienced cannabis users most commonly reach for traditional formats; in fact, almost half use rolled joints and three in 10 use edibles. This is unlikely to change post-legalization – at least in the short-to-mid-term. But there will be a new crop of users who are less steadfast and less experienced for whom brands can innovate and target.
Reaching the experienced user with the familiar will be as important as finding ways to comfortably ease in newcomers. Diversified product lines are a smart strategy to cast a wider net: to both experienced users who may be brand-agnostic as well as reaching those who need more guidance.
3. It’s not (only) about a good time
Mintel research debunked the myth of the stoner in 2018, finding that the stereotypes about the typical cannabis consumer, and reasons for use, were more than a little off base. Less than a third of recreational users cited fun as the driver for use and that is still the case today. Instead, consumers say they turn to cannabis as a means to contribute to both physical and emotional wellbeing: two-thirds of recreational consumers use cannabis for relaxation and three in five to relieve stress. Pain relief, improved sleep and mood enhancement are also among top reasons for use.
This suggests that while fun is a motivator, it is only a small fraction of the equation. Brand communications should be tailored to lead with improved quality of life. Fun can be a part of these improvements, just not the sole focus.
4. The cannabis occasion is up for grabs
Cannabis occasions take place largely at-home, pointing to a variety of opportunities for brands of all sorts (ie CPG food and drink, foodservice, technology, entertainment, delivery services) to gain access to these consumers, some of whom are a bit habitual. Three in five cannabis users, and those interested in using cannabis, say they are interested in doing so at home when they are alone. While nearly half say they are interested in using cannabis at home with friends or family. Furthermore, our research shows that more than three-quarters of cannabis users do so during evening hours.
For brands looking to forge a connection with these occasions and consumers, the notion of winding down and relaxation are strong associative relations to make. Convenience and even technology will also likely play a role.
What we think
The key to unlocking success in the recreational cannabis space is diversification and inclusion as a one-size-fits-all approach to brand strategy will miss a huge portion of consumers. Brands should tailor their approach towards different levels of consumer experience, a range of occasions, and the age of the market.
But that’s not the only way to diversify. Opportunities exist for brands of all kinds, even those with no interest in creating a cannabis product. Complementary goods and services that have mass appeal can be tailored to this niche consumer base in a low-risk, high-reward way as the recreational cannabis consumer is a consumer of far more than just cannabis. Brands who can support and engage recreational users across multifaceted and multidimensional habits, hopes, and aspirations can tap into the excitement of legalization.