Retal is abuzz with the momentum of companies jumping to create a niche for themselves in the emerging cannabis market. As cannabis becomes more widely accepted thanks to legalization, the market will continue to boom with new products. Here are the trends affecting cannabis and retail.
Cannabis Edibles and Retail
Though cannabis edibles are not legal everywhere, consumers are definitely interested.
Deloitte estimates that six out of ten interested Canadian cannabis consumers will decide to try new edible products when they become legal.
In US states like Washington and Colorado, consumers can already buy numerous products. This includes high-end candies, chocolates, mints, and even coffee.
Grizzle.com shared a report from BDS Analytics late last year. The report notes, “As smoking becomes less popular, the edibles market has become ‘the fastest growing and most profitable segment in cannabis.’ Some estimates put the edibles market to grow to $4 billion by 2022.”
Brands in this category are targeting a new, underserved consumer base with elegant packaging and sophisticated offerings. According to Vogue, edibles producer Lord Jones is an Instagram star thanks to its chic packaging. Celebrity collaborations with bands like Sigur Rós from Iceland also help.
“We realized there was a huge opportunity to normalize cannabis, to elevate the category, to standardize it, to make something that people could rely on. We wanted to appeal to the Whole Foods shopper or Equinox member or Coveteur reader. There was nobody speaking to that person.” – Rob Rosenheck, co-founder, Lord Jones
For Canadian Cannabis Retailers, adherence to the regulations for edibles should be top of mind. For every edible (or drink) contained in a childproof package, the product can only contain up to 10 mg of THC.
Additionally, Lord Jones is also popular for their hemp-derived CBD oils and lotions. A Forbes headline declares, “Cannabis Could be the Most Profitable Ingredient in Skincare.”
The CBD market grew to $170 million in 201. It is poised to reach $1 billion by 2020. Purveyors and users claim topical CBD products can offer relief for sore muscles. Moreover, purveyors claim CBD products have the added benefit of anti-inflammatory and anti-ache properties.
“Now that nine states and the District of Columbia have legalized recreational marijuana, and with many other states with varying latitudes of access, cannabis has gotten a whole lot more sophisticated. And the beauty business is not about to miss out.” – The New York Times
For instance, actress Olivia Wilde speaks highly of cannabis lotions. She says, “I discovered it through my friends in L.A. Recently I did a play on Broadway for six months, and my body was wrecked. My neck was really tight. The CBD has relaxing benefits, and the idea is to avoid using too many painkillers.”
Cannabis-based beverages are ready to challenge alcohol as a recreational alternative. A 2017 article by The Financial Post reports, “Canadians consumed as much as $6.2 billion dollars of marijuana in 2015, almost as much as they spent on wine.”
Established brands are taking notice. For example, Constellation Brands, owners of Corona and Kim Crawford Wines, acquired 10% of Canadian cannabis producer Canopy. Together they are developing a nonalcoholic cannabis beverage.
Cannabis Enhanced Cooking
Though cannabis is still illegal throughout most of the United States at the Federal level, it is already influencing culinary proclivities.
“Increasingly, marijuana is seen as a functional food, with purported health benefits far outnumbering what consumers can get from kale, turmeric or kombucha. With a new generation growing up in states where cannabis is legal (currently about 20% of the U.S. population), new products are rapidly entering the market.” – Forbes
The Specialty Food Association listed Cannabis as a top food trend in 2018. Cooking with cannabis is a growing health trend. Those using it claim it said alleviates pain, lessen anxiety and manage insomnia (Health.com).
New Customer Demographics
With legislated regulation leading to more predictable dosages, the future of cannabis and retail will see an influx of new customers. Often, these customer are looking for an alternative to opioids for pain management.
One such fast-growing group is seniors 70-90. A 2013 study by Health Canada found that two-thirds of registered medical marijuana customers were using the product to treat arthritis. Additionally, in 2016 The Globe and Mail reported, “In the United States, seniors have become the fastest-growing demographic of cannabis users.”
It was estimated that the legalization of Cannabis in Canada last year would potentially create a $23 billion business opportunity for retailers. In the US, BDS Analytics estimates the industry’s sales (cosmetics, consumables, and recreational cannabis) to rise to an estimated 21 billion by 2021.
OTHER CANNABIS RESOURCES
Refer to the Cannabis category for checklists, how-tos and best practices for the cannabis retail industry.