14 min read
What are the Demographics of the Cannabis Industry?
Understanding customer needs is the key to any successful retail business, even more so in the cannabis industry. Using consumer data helps brands make informed decisions about what products to sell and how to market their brands. Businesses use demographics, statistical studies of human characteristics, from population size and age to race, cultural backgrounds, and education to collect data. In the retail market, demographics are crucial to understanding customers’ preferences and current trends. They also allow companies to outline sales projections, market size, and advertising campaigns.
Consumer insights are also significant for cannabis businesses, especially given the rapid expansion of marijuana usage and its legalization across the states. To address a broader audience and beat the competition, dispensaries must first understand who their customers are, introduce solutions to attract and retain different customer groups, and ensure greater financial returns.
Cannabis Consumer Demographics
Due to its rapid expansion, the cannabis market will soon open its doors to more and more users, which will vary in age, gender, preferences, and even generations. With consumers becoming aware of what products they want and how they want them, they will have no problem turning to companies that can satisfy their needs and preferences.
For this reason, the industry will need to improve its marketing strategies and expand its reach across prospective customers, which they can do through consumer demographics. This analysis will help detect what the ideal customer looks like, what they prefer, and how to make informed decisions about new products to offer. Consumer demographics do not only involve a user’s age, but they also cover race, educational background, income, and even geographic locations.
Why do Cannabis Consumer Demographics Matter?
There is a widespread misconception that the only people who actively consume cannabis are Millennials, though this is far from true. As marijuana legalization expands throughout the country, more and more people of all ages and all walks of life are approaching dispensaries or looking for a way to purchase cannabis products. For this reason, research on customer trends is now more important than ever, as cannabis users are looking for uniqueness in their products. To stay competitive in the market, dispensaries must find new ways to make their customers’ experience more personal and need-based. This is where demographics come into play.
Demographic breakdowns help dispensaries find new marketing opportunities to attract prospective customers and beat the competition. For instance, promoting the business over multiple social media will have a greater impact than using only one platform. Learning to put consumer demographics into action will guarantee success for your marijuana dispensary.
Utilizing Demographic Insights
Knowing cannabis demographics is not enough. Another crucial step is utilizing all information and outlining a strategy to retain current customers and attract new ones. Each person’s interest in marijuana products will depend on their needs, preferences, and knowledge about the effects of the plant itself. Some may look for medical remedies, while others would rather experience marijuana on a recreational basis. Bear in mind that cannabis demographics can be highly volatile, as users’ behavior depends on their age and the way each generation was raised at a specific point in time.
Generation Z (Born Between 1995 and 2015)
While some Gen Z’ers may not have the required age to purchase legal cannabis, this digital generation is growing up in a world where the best opportunities are found over the internet, including the adult-use market. As they grow older, they will likely acknowledge the value of cannabis much faster and find strong affinities to be part of this industry upon turning 21.
Attracting and Retaining Gen Z Cannabis Consumers
- Use Social Media
Young people spend most of their time looking for the latest trends on their favorite social media. The best way to reach out to young generations is by posting new and interesting content regularly.
- Tailor Product Types
Gen Z’ers like to experience different products, mainly recreationally and find the type that best suits their desires. For this reason, it is best to provide a wider array of options.
- Enhance Shopping Experience
Although they are born tech-savvy, these people do not ignore an appealing store and value modern retail experiences and technological store features.
- Offer Specials and Discounts
Given their young age, this generation lacks disposable income, so many Gen Z’ers may not have a lot of money to spend. In this case, discounts can play a valuable role.
- Join the Influencers Community
Coming back to social media, influencers’ recommendations can have a high impact on Gen Z’s purchasing decisions, especially when it comes to cannabis.
Millennials (Born Between 1980 and 1994)
Millennials are thekey to the modern consumption of cannabis as the leading working drug. From reducing anxiety to stress relief to entertainment, young millennials are integrating CBD products within their lifestyle, proving that marijuana is not as dangerous as one may think. These are not random cannabis consumers, but people who try new products based on their needs and know exactly what they want out of their purchase..
Attracting and Retaining MillennialCannabis Consumers
- Embrace Good Causes and Social Values
Millennials appreciate when a company embraces good causes and values. Make sure your dispensary is not just a point of salebut a place that improves society for the best.
- Maintain Your Social Media Presence
Social media should go beyond traditional brand advertising. Millennials use these platforms to make their voice heard, whether through complaints, polls, or live streaming. Give them a chance to voice out their issues and have them resolved.
- Enhance Retail Customer Experience
Retail stores are very attractive to Millennials, especially when they are given a modern touch. Integrate technology and diverse product selection, and make sure budtenders can assist customers with the best purchase recommendations.
Generation X (Born Between 1965 and 1979)
Gen X’ers are often overlooked, yet they are among the largest consumers of cannabis. They tend to have a higher disposable income than younger generations, which they can spend on a wider range of cannabis products. These people like clarity and reliable purchases, so if you are looking to build a long-term relationship with a Gen X, make sure you are upfront about the quality of your products and that you are a trusted vendor.
Attracting and Retaining Gen X Cannabis Consumers
- Foster Customer Loyalty
The best way to attract and retain Gen X customers is through brand loyalty and trust. In such cases, remembering their names or the characteristics of their favorite products goes a long way and will ensure these people will return to you in the future.
- Use E-mails
When it comes to Gen X’s, traditional emails work perfectly. This group is very active in their inbox, so monthly newsletters with product specs will easily catch their attention.
- Update Your Online Platforms
Gen X’ers are still big users of Facebook, so make sure you update this social media regularly. Keep it simple, without showing too many images or sales information. A stellar online presence will ensure success among this generation and will guarantee higher brand recognition and returning customers.
- Be Upfront
Gen X’ers are the powerhouse working society. They are mainly CEOs and entrepreneurs, so they like honesty and an upfront personality. Be straight to the point about your products, their effects, and their benefits. If they are convinced, they will not only invest in your products but also be more likely to return.
Baby Boomers (Born Between 1944 and 1964)
Just like Gen X’ers, Baby Boomers are another underappreciated section of the cannabis users population. What many fail to consider is that this generation has been responsible for large socio-economic shifts, including the push to legalize the use of medical marijuana. Because of their overall health status, they are more likely to experience chronic pain, stress, or other health conditions, which may be relieved with cannabis products. If handled properly, baby boomer customers can significantly boost the industry’s revenue, especially with regards to medical marijuana purchase and consumption.
Silent Generation (Born Between 1928 and 1943)
Traditional and highly conservative, the Silent Generation is more prone to follow the rules and respect authorities, though they can still have an impact on the cannabis market. Similar to Baby Boomers, this segment of the population would rely on the medical benefits of marijuana rather than its recreational use. They are in smaller percentages than the other generations, yet they still have an impact on marketing stats, particularly emails.
Segmentation Examples for Cannabis Retailers
The success of cannabis dispensaries depends on how they utilize various marketing strategies to reach their target customers. Segmentation, for instance, helps divide the market into distinct groups based on specific characteristics such as age, lifestyle, or habits. Cannabis retailers can now base their marketing campaigns on these distinct subsets. Three main cannabis-specific market segments are worth discussing in more detail: seniors, fitness enthusiasts, and cannabis newcomers.
Contrary to popular beliefs, more and more seniors are replacing pharmaceuticals with cannabis after discovering that the benefits provided by the plant are equal or even greater than their traditional prescriptions.
- Preferences: Edibles, vaporizers, topical applications (cremes, lotions, etc.)
- Consumption: High CBD/low THC solutions to relieve mild symptoms or heavy indica solutions before bedtime for more intense pain or to support their sleep
- Shopping: Early hours of the day
Health and Fitness Enthusiasts
Athletes and fitness enthusiasts are another fast-growing category of cannabis users. Just like senior citizens, these people are integrating CBD into their training regimens, whether to recover after heavy workouts, combat soreness, and muscle inflammation or even enhance their overall training performance. With society becoming more health-conscious, one may expect an increasing consumption of cannabis as a health supplement.
- Preferences: Vaporizers, edibles, topical applications against inflammation
- Consumption: Daily microdoses or pre/post-workout
- Shopping: Order ahead, express checkout
Newcomers are people from many different age groups and backgrounds who, despite their differences, share one common trait: a curiosity for cannabis and the excitement of trying something new. As marijuana legalization spreads, more would want to explore this market in more depth and perhaps introduce new habits into their lifestyle.
- Preferences: Various (edibles, pre-rolls, tinctures)
- Consumption: Evenings or weekends, rarely during the day
- Shopping: Evenings and weekends, open to budtender suggestions
The more you learn about the market, the easier it will be to create an excellent purchasing experience and retain customers over the long term. Segmentation will help you understand the market in more depth, including consumption habits, shopping patterns, and even product preferences. Once your core segments have been identified, you can now redesign the strategy of your dispensary to offer targeted promotions and product offers.
According to a thorough study conducted by Headset, there is a significant difference in who purchases cannabis across market segments. While the majority of cannabis consumers are men, each generation shows consistent gender differences:
- Generation Z: Men 62%, Women 38%
- Millennials: Men 67%, Women 33%
- Generation X: Men 62%, Women 38%
- Baby Boomers: Men 60%, Women 40%
- Silent Generation: Men 65%, Women 35%
It is also interesting to note that gender breakdowns do not only depend on what generation people belong to but also on what products they consume. On the one hand, women’s taste gravitates towards wellness, including CBD oils (8.3% of purchases against men’s 5%), skin formulas, and stress-relieving treatments. On the other hand, men prefer more potent products such as high-potency concentrates, pre-rolls, flowers, or vapor pens.
Below are examples of category sales by gender:
- Beverages: Men 61%, Women 39%
- Edibles: Men 55%, Women 45%
- Capsules: Men 53%, Women 47%
- Vapor Pens: Men 63%, Women 37%
Each cannabis user is different and with distinct preferences. While these statistics are striking, there are cases in which gender preferences may vary. For instance, it was found that there is a relative gender balance in purchasing wellness-related topicals such as tinctures, capsules, and sublinguals.
One of the biggest changes in the cannabis industry is led by female customers, who are slowly becoming growing marijuana consumers and frequent dispensary visitors. From menstruation relief to sex-related pain, many women are turning to their favorite CBD brands, integrating light cannabis into their everyday life. Many “canna-curious” female consumers expect a higher level of customer service as well – for them, it’s not just about the product itself, but the entire shopping experience. For this reason, companies must focus their marketing efforts on representing products that attract female consumers, whereas dispensaries should find new ways to deliver a customer service experience that accommodates both genders.
The 2019 National Survey on Drug Use and Health (NSDUH) aimed at breaking down cannabis users by race in an attempt to demonstrate whether race plays a role in a dispensary’s customer base. Upon analyzing data single race participants aged 18 or over, the results were as follows:
- Native Americans: 20.4%
- African Americans: 20.0%
- Caucasians: 18.9%
- Hispanics: 15.2%
- Pacific Islanders (Hawaiians): 14.6%
- Asians: 7.9%
It was also found that biracial people, or those with more than two races, used marijuana at a significantly higher rate, reaching 30.5%. Nevertheless, aside from the very low rate recorded for Asian people, one may notice that the difference in cannabis use among the other races is very minimal, with Black and White Americans using nearly the same amount of marijuana. The effectiveness of this analysis should be considered only concerning a person’s race, though this information is not sufficient enough to confirm that cannabis consumption is directly linked to a person’s racial background. Measures of marijuana use depend on a wider variety of factors such as geographic location, lifestyle demands, personality, etc.
The same 2019 survey that analyzed cannabis consumption by age has also focused on users’ education level, retrieving the following data:
- Some College/Associate’s Degree: 21.5%
- High School Graduate: 17.5%
- College Graduate: 15.8%
- Some High School: 15.7%
From the data above, it seems like high school dropouts were the least likely to use marijuana compared to college graduates, though the gap is relatively small. Just like race, education level and school performance data should be considered with caution. In particular, one must consider the effects of adolescence, which brings new changes into a young person’s life, both mentally and physically, thus playing a role in the way they approach both cannabis and their school performance.
Below is one of the most recent breakdowns published by NSDUH in 2019, analyzing cannabis use based on employment status. It shows that full-time employees consume less marijuana than their part-time counterparts, though unemployed citizens hold the highest percentage of use:
- Unemployed: 29.3%
- Part-time: 21%
- Full time: 19.9%
- Other (i.e. students, full-time childcare, retired, disabled, etc..): 12.6%
While the effects of drug use on employment status are still under discussion, past studies have found that drug use may lead to negative employment outcomes or reduce the likelihood of employment altogether. Nevertheless, research consensus is lacking, so the correlation between the two factors should be considered with caution.
With regards to the poverty level, the NSDUH offers a thorough breakdown of cannabis use based on people’s different financial backgrounds. It was found that those with higher income are less likely to use marijuana compared to families or individuals who live below the poverty line.
In 2016, a large-scale study conducted by the Journal of Drug Issues found that many of marijuana frequent users were poor and mostly uneducated, i.e. lacking a high-school diploma. Authors Jonathan Caulkins and Steven Davenport discovered that the characteristics of marijuana users from 2002 to 2013 were very similar to cigarette smokers’ trends. This led to the conclusion that, over time, cannabis use was more similar to tobacco than alcohol, meaning that more people were using it daily. This new habit came to be known as the substitution effect.
Also, consider the poverty rate by gender and employment status and the way it affects cannabis use. Bear in mind that the higher the poverty rate is, the higher cannabis consumption will be.
- Male Employed: 12.66% poverty
- Male Unemployed: 49.09% poverty
- Female Employed: 29.95% poverty
- Female Unemployed: 71.74% poverty
With cannabis acquiring a major national presence, its prevalence across different segments of the population will too. From vapes to pre-workout edibles to stress relief CBD, each consumer will have different preferences on how to purchase and use marijuana and for what purpose. For this reason, consumer demographics will help cannabis businesses understand the way people use marijuana and what factors drive their habits. In addition, marketing insights will help dispensaries target what groups are more likely to buy their products and discover new trends that will bring the company to a better position to succeed.