Can a Cannabis Market Research Company in California Guide Strategy?

The national cannabis market is on the upswing, and in recent years several states have passed legislation decriminalizing marijuana possession or usage, or even legalizing it outright. What started with cautious legislation enabling doctors to prescribe medical marijuana has cascaded into overwhelming consumer applause that continues to grow in tenor.

Let’s take a close look at some statistics governing the greater market in the country.

According to some demographic analyses, 48% and 17% of recreational sales of cannabis products went to millennial and Gen Z users, respectively. How about in terms of national support? Apparently, in 2019, over 68% of participants polled were in support of cannabis legalization. That is an overwhelming majority, and it only promises to grow.

What about total users as a percentage of the current population? That’s estimated to hover somewhere around 12% of the current population. Apparently, slightly more men are current users, than women, but in the past three years, reported usage among female consumers has grown, leveling out at around 48% of users, splitting the market nearly 50-50.

These figures break up the market into actionable cohorts, but what about the promise of growth? What are estimates for legal cannabis sales in the United States?

Well, of course, figures will vary according to your source, but according to some figures, legal growth has been surprisingly high, no pun intended. You wouldn’t expect such overwhelming support from most consumers in the country without a corresponding increase in growth. According to some figures, cannabis sales through 2020 grew explosively. Whether fueled by the pandemic, stay-at-home orders, or ballooning public approval, 2020 cannabis sales grew by 60% – 67%, to be exact.

In 2020, the estimated value of the cannabis market was about 18 billion dollars USD – and it was and has been growing.

Now, how about consumer purchasing habits? What should we take a look at – frequency of use? Willingness to spend or budgetary considerations? Type of consumption method preferred? How about something else less predictable?

You’ll recall that many businesses were shut down during most of 2020. You may also remember – perhaps firsthand – that many people were forced to work from home or even, unfortunately, lost their jobs.

What else happened to cannabis consumer behavior during 2020, in addition to the fact that usage increased?

Well, buying habits shifted in a way that reflected similar changes in the greater market. Namely, consumers started relying on cannabis delivery services. Specifically, demand for cannabis delivery services inclined sharply. According to some figures, customer participation in cannabis delivery programs jumped by more than 50%.

That paints a picture for markets in which there were sellers that offered those services. Imagine what would have happened if all cannabis vendors offered those services? Likely, participation would have increased even further.

That being the case, not every vendor serves the same market – and since laws vary considerably from state to state, and since marijuana is still federally illegal, these national statistics might be of particular interest to most sellers operating from a specific state – which begs the question:

But What about Your Corner of the Industry?

The purpose of cannabis market research, specifically cannabis consumer statistics in California, is to learn as much as possible about your target customers. If you operate a cannabis dispensary, for example, in California, what consumers in Colorado or New York prefer may not matter too much to you. That solidarity might leave you with a warm fuzzy feeling, but in terms of actionable insights, there may not be much they can offer you.

This is why there is so much value in precision targeting and performing the right research, seeking the right answers – in the right places. Let’s consider some quick facts about the market for cannabis products in Califonia.

Cannabis Consumer Stats and Facts – California

  • In 2017, cannabis sales in California accounted for 34% of legal sales in the United States.
  • In 2020, California’s cannabis retail sales totaled around 4.4 billion dollars, up 50% from 2019.
  • This figure accounted for 27% of all legal sales in the U.S.
  • The cannabis market in California is expected to reach or exceed 5 billion dollars by 2022.
  • California is the single largest legal market for cannabis products in the United States.
  • According to some studies, around 20% of adults in California used cannabis recreationally in 2019, up from around 13% in 2011.

So does this mean it would be lucrative for you to invest in or open a dispensary in California? Are you currently employed by a dispensary and tasked with strategic growth?

The short answer is a resounding “possibly.”

Though the figures above are compelling in their own right, they are too raw to put to use for the purposes of devising strategic marketing positioning or making decisions about product research and development.

They just don’t paint a close enough picture about your own target consumers, perhaps because general statistics simply can’t do so. In order for you to effectively market your cannabis products, you need first to define your target audience, before a cannabis market research company in California can help you answer some of the following questions:

  • How often do my target users use cannabis products?
  • What types of cannabis products do they prefer to use?
  • Are there any opportunities for marketing or developing new cannabis products? (Such as edibles, drinks, tinctures, etc.)
  • What type of discretionary spending is my target market comfortable with?
  • Do I need to start providing delivery services?
  • Are there any seasonal trends I need to observe?
  • Are there any product lines I should stop supporting or continuing?
  • And many other similar questions.

If you’re looking for help making strategic decisions from a cannabis market research company in California, ISA Group can help. We offer a number of unique research products, including our bi-weekly CANNApinion surveys that can lend you tailored market insights to guide your strategic decision-making process.

Need a Cannabis Market Research Company in California?

You can’t answer questions until you ask them. Give us a call at 818-989-1044 or email us at hello@isacorp.com if you have any questions about how we can help you tailor your marketing strategy with custom insights.

How Professional Cannabis Consumer Insights Can Help Guide Strategic Decisions

States across the country have taken steps in the direction of cannabis legalization and decriminalization. Some states have legalized sales and; depending on the source you trust, as many as two-thirds or up to 68% of Americans believe that cannabis products and their associated consumption should be legalized. Consequently, the legal cannabis industry has consistently grown.

Whether you operate a successful dispensary and have been in business for years or you’re just looking into the financial implications of running one, there is value in cannabis consumer insights. Business leaders base much of their strategic planning around forecasts developed from extensive consumer opinion polling and other objective research.

But how can it benefit your business? Much of it comes down to how well you understand your consumers, what they do, why they do it, and what they want.

When historical sales data is insufficient, sometimes the answer lies with gathering the data proactively. Here are some of the key questions that cannabis consumer insights, consumer polling, and market research can help you answer.

How Do Customers Prefer to Buy?

Though this question, on the surface, looks like a high-level “cash or credit?” type of question, its implications run much deeper. Consider the shifts in purchasing habits that have taken place over the past two years or so.

More and more online and local shoppers are increasingly desirous of free shipping that is also stipulation-free; that is, customers who buy online want free shipping or free local delivery. Is your dispensary prepared to handle that?

For example, our research indicates that 33% of cannabis users in select markets relied heavily on delivery services during coronavirus lockdowns. Is that trend going to continue or will it falter? Past sales figures can’t tell you – only current polling and other research.

The bigger question is: is your dispensary poised to adapt to changing consumer preferences such as these?

What Are Customers Cannabis Consumption Habits?

Does your dispensary sell only flower? Or does it sell a range of different cannabis products, such as edibles, tinctures, concentrates, cannabis drinks or other unique products? More importantly, does this matter to your customers?

If your target buyer smokes flower, then you’re set for success. But what if your buyers only purchase flower incidentally, then decarb it themselves in order to make their own edibles? You might serve them better by expanding your product portfolio. Consumer data can yield insight into this consumer data.

Conversely, a product line expansion might be a wasted expense if it doesn’t result in sales and conversions. How and what your target buyers consume can help you grow strategically, making informed decisions that can justify that growth with sales – not just with a larger, costlier enterprise.

How Frequently Do Your Target Consumers Partake?

The prices you set and the type of buyer you want to attract will both affect and be affected by the consumption habits of your target market. Profitability will be affected by sales, and you might need to adjust prices accordingly to reflect projected sales forecasts.

As a very simple, high level, but reasonable example, if your target market only partakes occasionally, you might want to sell in larger or bulk quantities in order to meet that demand and expand profitability at the same time. Selling in smaller quantities might not make sense.

It all comes back to what your buyers do and when they do it – how often do your target consumers use cannabis, and can your dispensary meet that demand?

What Type of Budget Does Your Target Customer Set?

Similarly, you need to understand your target buyers’ budget as closely as possible. Other questions such as those related to price sensitivity are equally important to answer. If your branding appeals to a price-insensitive audience, a price scale or adjustment might be in order. The same could be said if your brand was not well-aligned with the actual visitors that came to your dispensary.

The key takeaway is that your price model might be inefficient, but you wouldn’t know it unless you can answer some key questions about how much your target audience intends to allocate to discretionary purchases of cannabis products.

What Types of Incentives Will Your Target Buyer Respond to?

Another basic but surprisingly relevant question revolves around strategic growth. It’s been shown time and time again that effective loyalty programs can improve customer satisfaction, boost customer engagement and retention, and increase sales. The operative word in that statement is “effective.”

What type of loyalty program will appeal to your target buyer? Why? What other strategic positioning incentives can you undertake in order to reach more consumers more effectively? Our consumer research shows that over 70% of dispensary shoppers would spend more if the dispensary offered a loyalty program.

What other questions about strategic growth do you need to be answered before you can justify the expense associated with rolling out new programs? You may be the only one to be able to ask those strategic questions, but our cannabis consumer insights can help answer them.

Basic Cannabis Consumer Insights: Your Buyer Persona

Reflect on what you’ve read so far. You’ll notice that we used the terms “target audience” and “target buyer” several times throughout this article. Before you can answer any of the other questions we posed with cannabis consumer insights, you need to define your target buyer – surprisingly, target buyers are not just the people that come into your dispensary to purchase. These are just buyers. Target buyers fit a profile defined by habits, preferences, and demographics that you must define in order to launch successful marketing campaigns.

Luckily, cannabis consumer insights can also help you define your target audience. To learn more about how you can get started making wiser marketing moves, visit our pages on Cannabis Market Research and CANNApinion Polling, or get in touch with us directly at 818-989-1044 or at hello@ISACorp.com.

4/20 Celebrations Rebound After Covid

Poll results from ISA indicate significant boosts in dispensary visits, gifting and trying new products for 4/20/2021

There’s a dramatic shift in the way cannabis consumers across the U.S. will be celebrating the 4/20 cannabis holiday this year, according to poll results from insights firm ISA, a Material Company. This year more consumers plan to host friends at home, visit dispensaries and celebrate in public places, such as live events or restaurants. This comparison is based on survey results from another ISA study fielded in April of 2020.

The percentage of cannabis consumers who say they will celebrate the holiday in some way has now outpaced pre-COVID-19 levels. In 2019, 70% of cannabis consumers said they would celebrate the 4/20 holiday. That percentage has jumped to 78% in 2021.

The most significant variance from 2020 poll results has been among people who say they are planning to celebrate 4/20 with friends at home. In 2019, before the pandemic, 58% of consumers who planned to participate in the holiday said they would celebrate at home with friends. That number dipped to 29% in April of 2020, and has now rebounded to 55%, indicating a return to normalcy for cannabis consumers who celebrate by hosting private events.

The findings could indicate the cannabis industry will experience a significant uptick in sales on and around April 20th, with more people venturing out to their local dispensary. The percentage of cannabis consumers who say they will visit a dispensary to celebrate 4/20 rose from 13% in 2020 to 30% in 2021, coming in slightly above the 2019 percentage of 26%. Additionally, more consumers plan to purchase 4/20 gifts for friends and family in 2021, compared to 2020. The 2021 poll revealed that 37% of consumers who celebrate 4/20 plan to buy gifts for others, while 16% reported doing so in 2020. Another positive sign for dispensaries and cannabis brands is that a significant number of consumers (40%) are planning to try a new product as part of their holiday celebration, up from 21% in 2020.

“The cannabis industry grew steadily throughout the pandemic,” said Adriana Hemans, ISA’s VP of Demand. “What’s exciting about the early poll results from 2021 is that cannabis consumers are coming together again for 4/20, seeking novel experiences with new products. Those products could potentially become part of their regular cannabis routines, providing additional growth opportunities for brands.” ISA will continue to gather data and insights from cannabis consumers in the days leading up to April 20th, providing business analysts, industry experts and media outlets with ongoing updates on consumer behaviors related to the 4/20 holiday. Figures presented in this press release are based on three studies – a nationwide poll of 1,001 cannabis consumers fielded April 26th through April 29th of 2019, with a 3% margin of error at a 95% level of confidence; a nationwide poll of 420 cannabis consumers fielded April 18th through April 20th of 2020, with a 5% margin of error at a 95% level of confidence, and a nationwide poll of 420 cannabis consumers with a 5% margin of error at a 95% level of confidence. To qualify for inclusion in all of these studies, participants indicated that they are over 21 years old and had purchased or consumed cannabis in the last 90 days. Participants in the 2021 study were gathered through ISA’s proprietary cannabis research panel – The Green Time.

 

Cannabis Consumers 4/20 Celebration Plans

ISA conducts 2020 Police and Community Relations Survey for StudyLA at Loyola Marymount University

ISA conducts 2020 Police and Community Relations Survey for StudyLA

This survey was conducted to measure public opinion toward the Los Angeles Police Department’s (LAPD) policing in Los Angeles, California

The Study

In the fall of 2020, Interviewing Service of America (ISA) conducted a survey on behalf of The Center for the Study of Los Angeles (StudyLA) at Loyola Marymount University to better understand the public’s opinion toward policing in Los Angeles. The questions asked in this survey covered topics such as trust in the police, community engagement efforts by the local police, race relations, and personal experiences with the police. The reason for the study was to gauge how residents feel about the job the LAPD is doing in relation to their mission: “to safeguard the lives and property of the people the LAPD serves, to reduce the incidence and fear of crime, and to enhance public safety while working with the diverse communities to improve quality of life.”

Methodology

The survey was conducted from August 21 to October 25, 2020 and administered in English, Spanish, Mandarin, and Korean. It utilized a mixed methodology to ensure representation of the diverse LA population, consisting of a 20-minute telephone interview, online surveys, and face-to-face interviews with 1,753 adults who reside in the city of Los Angeles. A minimum of 400 residents from each of the four LAPD bureaus were surveyed.

Results

When residents were asked how things were going in the city of Los Angeles, only 48.8% said it was going in the right direction. The level of optimism has been steadily dropping since 2017. Residents have more trust in their neighbors (64.6%) than the LAPD (51.2%) to do what is right. A huge number of Angelenos support community policing (88.2%), which focuses on having officers build ties and work closely with community members. Even with the overwhelming number of those who support community policing, only 9.8% say the LAPD’s role is to work with and be part of the community. A large number say that their role is to serve, protect and enforce laws (71.1%).

To learn more of the results of this study, visit StudyLA’s full article here.

Consumer Awareness Biggest Hurdle for Cannabis Beverage Makers

Assorted Cannabis Beverages

SoapBoxSample Poll Shows 45% of Consumers Unaware of Cannabis Beverages, Presenting Opportunity for Marketers

August 18, 2020, Los Angeles, CA — While the cannabis-infused beverage category is expanding rapidly, product awareness and brand awareness lag behind, according to a survey of 1,000 U.S. cannabis consumers fielded July 2nd through July 16th, 2020 by consumer insights firm SoapBoxSample. Results revealed that the top reason cited for not having tried cannabis beverage products is that 45% of consumers simply did not know they existed. Meanwhile, those who have tried it are likely to try it again. The most popular types of beverages consumers have tried and say they will have again are juice or fruit punch (68%), hot chocolate (61%) and non-alcoholic wine (60%). Certain categories of cannabis-infused beverages have even become a part of some consumers’ weekly routines including coffee (42%), tea (42%) and juice or fruit punch (41%).

“This study illustrates the enormous potential of the cannabis beverage market,” said Jacqueline Rosales, COO of SoapBoxSample. “Cannabis consumers are eager to try new products and they are expecting brands to bring products to market that speak to their specific tastes and preferences. By connecting with their target audience, brands can make strategic decisions supported by market insights.”

Beer without cannabis is the most popular alcoholic beverage in the United States. However, that popularity doesn’t seem to translate to the cannabis category. SoapBoxSample asked consumers who hadn’t tried a cannabis beverage about their interest level in 13 different types of beverages. The only beverage that ranked lower than beer were aperitifs. Only 33% expressed an interest in trying cannabis-infused non-alcoholic beer. By comparison, 79% said they would like to try a cannabis lemonade or limeade. Other popular choices for would-be consumers include iced and herbal teas (79%), juice/fruit punch (77%), and soda/sparkling seltzer (72%).

Cannabis beer brands may be hoping to win over consumers once they sample the product. However, consumers who have tried cannabis beer have less interest in trying it again, compared to other beverage categories. While 39% of those who have tried cannabis beer said they would drink it again, 68% of those who have had cannabis juice or fruit punch said they would drink it again and 61% of those who tried cannabis hot chocolate would have it again. Adoption rates of cannabis sparkling water (59%), infused coffee/cold brew (58%) and infused iced or herbal tea (56%) were also relatively high, while cannabis beer (39%) and aperitifs (28%) ranked lowest.

The emerging popularity of cannabis beverages is reflected in the data. Among those who have tried cannabis beverages, 29% tried it for the first time in the last month. To understand rapidly evolving consumer preferences, SoapBoxSample looked at consumer interest in beverage types and awareness of cannabis beverage brands. Overall, brand awareness is low. Around 60% of consumers said they were unfamiliar with all 23 of the brands tested in this study, indicating there is room for cannabis brands to earn market share by increasing brand awareness.

The reasons people cited for consuming cannabis beverages mirror the trends that can be observed in the larger cannabis market. The desire to ease anxiety (53%), aid in sleep (46%) and manage pain or illness (37%) are some of the top reasons cited for consuming cannabis generally. A few drivers of consumption that are unique to the beverage category include enjoying the flavor (40%), curiosity about the taste (25%), ease of concealment (22%) and faster onset (21%). Demographic information from this survey shows that the cannabis beverage consumer is likely to be a white male between the ages of 21-54, who is married with children.

Learn More About Cannabis Research here.

The Cannabis Conundrum Continues

By Dan Parcon, VP of Operations, SoapBoxSample

With the US cannabis industry expected to reach $13.6 billion in sales in 2019 and a whopping $66.3 billion by the end of 2025 (Forrester Research, 2019), the growth and adoption of cannabis is laden with challenges at every point in the seed to sale ecosystem. It’s fair to say at this point, the surface has only been scratched.

The rapid growth of the cannabis industry is evidenced by the number of cannabis business events that take place every year across the United States. In maturing markets, gatherings like these are crucial to the evolution of the marketplace. By learning from each other, cannabis business leaders can then draw upon the shared experiences of the community to help them navigate the new era of cannabis. Last month, cannabis thought leaders, business owners, investors, and experts gathered at the National Cannabis Industry Association event in Long Beach, CA. The chatter ranged from legislation to supply-and-demand to branding.

Brands and Dispensaries Face Big Hurdles in Earning Consumer Trust

As expected, there was endless conversation around the vaping controversy. A mishap in an emerging market like cannabis can have immediate and direct implications, and the industry may remain on high alert for the long term. With the real-time and rapid spread of news, and having little control over the narrative, those in the industry have a delicate balancing act to maintain.

“Our research has shown time and again that while consumers are insatiably curious about cannabis products, brands still have a lot of work to do in gaining consumer trust. The current vape crisis is a major setback for the industry, that is likely to impact consumers’ attitudes and behaviors for years to come,” said Jacqueline Rosales, COO of SoapBoxSample.

The idea that bootleg or “backyard” vapes are making their way to consumers, tainting things for those who do things right, puts stakeholders at risk. Lindsay Robinson Executive Director, California Cannabis Industry Association, stated “Counterfeit cartridges with very prominent names are being sold in illicit stores, often times people have a very hard time figuring out what is real and what isn’t real.”

The problem of consumers being distrustful of cannabis products extends beyond vapes and vape cartridges. Cannabis consumers are also wary of accurate labeling of other products, including the flower itself. Recent finding from SoapBoxSample’s CANNApinion poll, a bi-monthly survey of 1,000 US cannabis consumers, revealed that 28% of cannabis consumers say they are not very or not at all confident that the strains they purchase in dispensaries are accurately labeled. Dispensaries and brands face a big challenge in gaining the public’s trust. To move forward as an industry, companies need to assure their customers that their products are safe, legitimate, and accurately labeled.

Dispensaries Should Focus on the Shopping Experience to Build Loyalty

Experience plays a big role in the success of a dispensary. Jennifer Whetzel, Founder of Ladyjane Branding, said, “I’ve talked to a number of people who turned away from going to dispensaries due to their shopping experience.”

In more mature markets, the consumer has choices and can go elsewhere or leverage a delivery from their home. The great number of cannabis considerers account for much of the expected growth in the market. While they seek info online, they also rely on the expertise of those in the dispensary. A negative experience may not just lead the customer away from the specific dispensary, but away from even considering cannabis – whether it be for medical or recreational use. Perhaps of even more concern is budtenders and dispensary workers making uninformed recommendations resulting in negative experiences for the users.

SoapBoxSample’s recent CANNApinion Poll revealed that 57% of cannabis consumers say a consistent budtender is extremely or very important while only 30 % say they trust the advice of a budtender when researching products.

Brands and dispensaries must understand the products being sold, what products are trending, and more importantly, what their target audience is searching for. Many times consumers are looking for education and information, and most (66%) feel that they don’t have enough information to make an informed decision (CANNApinion Poll, August, 2019).

Marketing Messages Must Match the Consumer Wants and Needs

“Sometimes our message (of fun) gets a little lost, as being advocates we like to talk about core benefits. Sometimes these products are better for a fun and recreational use and there is no reason to shy away from that as long as we are targeting responsibly.” – Taylor West, Partner Heart and Mind Media.

There are some brands and markets solely focused on the medicinal benefits. Others market to recreational users. In some marketing, there is no delineation. With many scurrying to be first or at least quick to market, it seems traditional business practices around marketing, branding and adverting are being lost.

While there is acknowledgement within the industry about the need to adopt more sophisticated business practices, change is slow. One year ago (October 2018), at the USCC (US Cannabis Conference) in Phoenix, AZ, thought leaders discussed the role consumer research can play in the development of new cannabis products. Kaila Strong, Director of Marketing at Jupiter Research, had this advice for cannabis marketers — “When we’re dealing with wholesalers all the time I think we lose that connection with the consumer. You probably consume, but you shouldn’t assume that you are your consumer.”

The business challenges being discussed at NCIA all boiled down to one constituent – the consumer. There is no “one” cannabis consumer and therefore there is no “one” marketing strategy. Brands must have clarity on why they exist and who they want to sell to – and then hone in on the why to buy. Without direct feedback and insight in the whats and whys cannabis businesses are playing a dangerous game of guts and guesses. While cannabis companies are focused on staying afloat through the current political and regulatory climate, customer experience and consumer trust is everyone’s responsibility across the full ecosystem – from seed-to-sale.

As a consumer insights company committed to helping cannabis brands grow, we’re proud to be a sponsoring member of the NCIA. Our goal is to keep the cannabis industry moving forward through data and insights. To learn more, please visit https://www.soapboxsample.com/cannabis/.