CRAC Archives

Anne-Marie FischerJune 20, 2019

Data is everything in cannabis right now. With this “data race” going strong, the cannabis industry is benefitting from useful data as firms compete to release the most interesting data on the profit-driving consumer behaviors of cannabis users.

Now, we have new insights on the why around cannabis use and overall cannabis attitudes, thanks to a new cannabis-related data set that the analysts call a “giant sandbox of data to play in.”

Consumer Research Around Cannabis has partnered with Radium Research LLC to provide the cannabis industry with insights they have never seen before through the use of predictive analysis, an approach to data that allows analysts to make predictions about future behaviors, attitudes, and consumer patterns.

Whereas the cannabis industry thus far has relied on attitude surveys, Point of Sale data and state reports to understand the who, what, where, when, and how of cannabis consumption, these new research partners are offering the why… and you may be surprised by what they found.

Using data from over 110,000 local market surveys that spanned the Greater Toronto Area and 85 U.S. markets, the analysts mined the 15 key factors that drive people to say that they support legal cannabis. Key indicators included voting behavior, whether they drink alcohol, whether they use tobacco and even looked at whether they attend religious services on a regular basis.

In their analysis of the data, what stuck out most is that the choice to support the legalization of cannabis is an issue of morality, and largely coincides with a person’s likelihood to attend regular religious services. For instance, in the case of Illinois, the analysts found that those who attended regular religious services were 83% opposed to cannabis legalization, while those who did not attend religious services were 89% in favor.

Jeffrey Stein, VP of Consumer Research Around Cannabis explained to Green Market Report that asking several hundred behavioral questions on medical and recreational cannabis use can offer predictive analysts a window to understanding the “key ingredients” that lead someone to support legal cannabis.

Dr. Paul Crowe, President of Radium Research, who created his company to apply his experience in predictive analysis in product innovation and segmentation, reminded us that a lot of the data going around in the cannabis space right now is like looking through a “rear view mirror”, whereas the approach of predictive analytics allows us to look ahead, and innovate.

“Innovation is the lifeblood of any company,” says Stein, “If you don’t innovate you’ll sink because someone will always innovate better than you. Once the “big guys” of the cannabis industry jump in [to the data game] you’ll need to know the future.”

This partnership between Consumer Research Around Cannabis and Radium Research offers the cannabis industry, policymakers and companies from other industries an opportunity to truly get into the heads of potential, current, and future consumers in order to predict what makes them tick.

An example of how this data can be used by cannabis companies is comparing purchasing data, for instance, individuals who use a vaporizer to consume cannabis, and their attitudes towards cannabis, and the reasons they use it. Companies in their marketing approaches can now understand certain drivers for consumers and market their products based on these indicated attitudes.

This team has partnered with NORML of Illinois & Chicago to offer their data, and the approach of predictive analysis, as a tool to help this group “know exactly where they need to go to change attitudes.”

Jack SmithOctober 23, 2018

A new study shows that 69.5% of Las Vegas residents approve of legalized marijuana. While marijuana is legal in the state, usage has now surpassed more than the 50 percent mark, implying that people are becoming more comfortable with it as time goes on.

The study, produced by Consumer Research Around Cannabis for Green Market Report, shows that 52.2 percent of approximately 1.4 million respondents approve of marijuana use for both recreational and medicinal purposes. An additional 16.7 percent approve of it for medicinal use, though they have no opinion or disapprove of recreational use, while 0.6 percent approve of recreational use and have no opinion or disapprove of medicinal usage.

Just 14.7 of respondents disapproved of cannabis in both recreational and marijuana settings and 12.2 percent did not have an opinion either way.

Marijuana became legal for recreational use at the start of 2017 and acceptance of it has jumped since late 2017, as 52% of respondents said they had used or bought it in the fall, up from 44 percent in the spring.

Who’s Buying

Cannabis consumers range all parts of the spectrum, covering a wide range of demographics. Nearly half of the adult population 21 and over, 772,000, said they were cannabis consumers. They are approximately 45 years in age, have an average household income of $53,263, and have an average home value of just over $278,000. Forty-one percent of consumers are married, while 49 percent have kids at home.

By comparison, the 1.49 million people living in the market average 47 years old, 45% are married and 46% have children, making the numbers comparable.

“The percentage of adults A21+ that are currently using cannabis for medical reasons has increased to 18.1% from 14.3%,” the study said. “Top health reasons for consuming cannabis include: treating temporary/minor pain, chronic pain management, alleviating mental health issues, to assist with sleep and to treat a non-pain medical condition.”

18% of the consumer in the greater Las Vegas area have been buying cannabis in order to treat addiction problems. This could be for alcohol or opioids. According to the most recent data, Nevada ranks in the top ten states for drug and alcohol abuse. Nevada is also the second in the country for non-medical use of hydrocodone and oxycodone. Per capita sales of oxycodone have increased 366% in the last 10 years, while sales of hydrocodone have increased 233%.

Actual Sales

For the fiscal year 2018 (July 2017-June 2018), the Nevada Department of Taxation reported that it collected $27.3 million in wholesale cannabis taxes and $42.5 million in retail taxes. Taxable sales reported by adult-use retail stores was $529.8 million.

If spring is considered April, May, and June, sales increased from $47.5 million in April to $48.3 million in June. Nevada has only reported sales through July 2018, but the numbers continue to climb to $48.4 million. If the CRAC is accurate then the state is in for a very generous fall.

The Vegas cannabis market continues to grow as big retailers like MedMen continue expanding their retail footprint and the new enormous Planet 13 dispensary prepares to open on November 1. This dispensary will cover 16,500 square feet inside a 40,000 square foot cannabis entertainment destination. A cannabis superstore is surely going to generate big sales.

Video StaffOctober 4, 2018

At the recent Green Market Summit on September 14, 2018, a group of top cannabis industry professionals discussed The Economics of the Cannabis Consumer. David Dancer, Chief Marketing Officer at MedMen, Jeff Stein Managing Partner at Consumer Research Around Cannabis and Bethany Gomez Director of Research at Brightfield Group talked about which consumers were the most loyal cannabis consumers and what they bought.

Understanding who is using cannabis can help businesses gain a significant advantage over
competitors. According to a recent research study from DIG Insights, approximately 25% of
Americans have used cannabis in the past year. At present, the majority of current cannabis
users are men under the age of 40, with roughly 86% of all cannabis purchases nationwide
being illegal purchases. Read more in the Economics of Cannabis Consumers report.

Debra BorchardtSeptember 18, 2018

The news that soda giant Coca-Cola (KO) could be considering an investment or partnership with Aurora Cannabis (ACBFF) rocked the cannabis industry. First, because Coke is the king of beverages and secondly because cannabis is been so taboo in the consumer products industry.

“Consumer research shows Coca-Cola’s interest in marijuana is well-founded,” said Jeff Stein, Vice President at Consumer Research Around Cannabis (CRAC), a U.S. consumer company that specializes in researching the general consumer market and more recently, targeting cannabis consumers. “Soft drink users are more inclined to cannabis use than the general market according to our ongoing studies,” he said. The online study covered 36,199 adults of all age groups regarding purchasing behavior.

CRAC said that the more a person drinks soda, the more likely they are to purchase cannabis. Stein said that about 15% of the general market says they would buy adult use cannabis over the next year, but people who drink soda at least five times a week or more, that number pops to 18%. A whopping one out of five people who drink ten or more sodas a week plan on buying adult use cannabis in the next year.

	% General	% Of Adults Who Are Extremely
Consumer In Past 7 Days	Market Adults	/Very Likely To Buy Marijuana	Index*
MONSTER	1.1%	2.1%	201
MOUNTAIN DEW	8.3%	13.0%	157
FANTA	1.8%	2.6%	142
SPRITE	8.5%	10.7%	126
DR PEPPER	9.3%	11.5%	124
PEPSI COLA	19.9%	23.7%	119
COCA COLA	27.7%	31.8%	114
CANADA DRY	1.6%	1.5%	97
DIET MOUNTAIN DEW	1.2%	1.1%	89
7-UP	2.2%	1.9%	88
A&W ROOTBEER	1.7%	1.3%	79
DIET DR PEPPER	1.5%	1.1%	72
DIET PEPSI	3.8%	2.5%	66
COKE ZERO	2.2%	1.5%	65
DIET COKE	6.6%	3.7%	56

Chart provided by Consumer Research Around Cannabis

* 2.1% of adults are extremely or very likely to buy marijuana this is 2 times the general market that drinks. Monster thus an index of 201. If it was the same as the general market the index would be 100.

31% of those surveyed that drank Coke in the past seven days were very likely to buy adult use cannabis, 23% of Pepsi (PEP) drinkers were extremely likely to make a purchase and Mountain Dew was in third place at 13%. Mountain Dew is owned by Pepsi and mostly associated with young, male consumers due to its sponsorship of many action sports. The caffeine in Mountain Dew is significantly higher than Coke.

The soda drinkers that are least likely to purchase adult use cannabis are diet soda drinkers. Only 1.1% of diet Mountain Dew drinkers and 1.1% of Diet Dr. Pepper drinkers plan on making a cannabis purchase. The only other soda drinkers that weren’t diet soda drinkers that had a low likelihood of buying adult use cannabis were people that drank A&W Root Beer, 7-Up and Canada Dry.

Soda’s Pharmaceutical History

The two products also have a somewhat shared history. Cannabis was originally a medicinal drug in the late 1800’s that was sold by pharmacists and carried by the major drug manufacturers of the time like Eli Lilly and Pfizer. Soda was initially sold as artificial mineral water and was also used for medicinal purposes. This is why the soda fountains were first found in drug stores. Cocaine and caffeine were sometimes added to the drinks for medicinal purposes.

So, both of these products began life in the drug store and now both could find themselves on a shelf at a dispensary together. Coming full circle.

William SumnerFebruary 9, 2018

With recreational cannabis now legal in the state of California, the Los Angeles Greater Metropolitan Area is poised to become one of the largest cannabis markets in the world. In such a highly competitive market, the companies that succeed are going to be the one that are able to capitalize on business intelligence, such as consumer data.

In the latest Cannabis Marketplace Report published by Consumer Research Around Cannabis, researchers give us a snapshot of the Los Angeles Greater Metropolitan Area and provide some interesting insights about the consumers living in the second largest cannabis market in the United States.

According to the report, there are approximately 13.7 million adults over the age of 21 and approximately 5.3 million of those people are cannabis consumers. An estimated 45.6%, or 6.24 million, of Los Angeles area residents, approve of both recreational and medical cannabis and another 19.1% approve solely of medicinal cannabis.

In terms of monthly expenditures, cannabis consumers spend the most on flower. On average, roughly 1.7 million LA cannabis consumers purchase flower every month, spending approximately $85. Edibles and pre-rolled cannabis come in second (1.5 million) and third (1.2 million), respectively, for a number of average purchasers; but consumers overall spend more money per month on cannabis pills ($64) and vape oils ($63).

Compared to everyone else in the market, cannabis consumers are exceedingly average. The average age of an adult cannabis user 21 years or older in the Los Angeles area is 47, the average age of an LA cannabis consumer is 46. Likewise, the average household income is $63,852, compared to $61,148 for cannabis consumers. The average home value of a cannabis consumers is $463,031, compared to the market average of $469,380.

However, there are some differences between cannabis consumers and non-consumers. Cannabis consumers are four times more likely to be employed full-time, forty-three times more likely to be B2B decision makers, and are seventy-two times more likely to be a business owner, partner or corporate officer.

LA cannabis consumers are also five times more likely to work a white-collar job, ten times more likely to frequent restaurants, and twenty-two times more likely to plan on taking a college course within the next twelve months.

Despite the public perception of being couch dwelling burnouts, cannabis consumers are what many advocates have been saying for a long time: normal people. They’re middle-aged, middle income, and own their own home. As cannabis becomes more mainstream, most businesses would do well to heed this lesson; especially those who wish to become successful in the highly competitive market of Los Angeles.

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CRAC Archives - Green Market Report

Predictive Analysis in Consumer Data Gives Insight into Cannabis’ Future

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