Cannabis industry reports

The demographics of cannabis consumers

March 31, 2020

Executive summary

This report focuses on the demographics of cannabis consumers. It uses data from loyalty program participants to examine the purchasing habits of different generations, examining their overall market shares, as well as specific preferences on price, product type, brands, and more. It will be especially useful to companies developing and marketing products to consumers, but also to journalists and observers who want to learn more about how consumers approach cannabis under the framework of legalization.

Introduction

In this report, we attempt to understand how age and gender affect cannabis purchasing habits. As in any industry, cannabis consumers from different generations have different purchasing habits, and the same is true for gender. By looking at things like Average Item Price (AIP) and Basket Size, we’re able to better understand the way the economy at large affects the cannabis industry. 

Because the cannabis industry is dominated by millennials, the amount of disposable income available to them has a lot to tell us about what does and doesn’t work in the cannabis industry. Big ticket items are going to sit on shelves a lot longer, for starters. On average, the younger generations have less to spend on each visit than their more established counterparts, but they do make up a vastly larger share of the overall market. It is not exaggerating to say that Gen Z and millennials combined could make up more than three quarters of the cannabis consumer base in a few short years.

Beyond the simple matter of sales and price sensitivity, these data show us that there are many soft preferences between generations. For instance, baby boomers still prefer flower, even after five years of exposure to other options. The youth preference for vaping mirrors that of the tobacco industry, with Gen Z and millennials being much more inclined to it. 

When it comes to gender preferences, it’s clear that the legal cannabis industry still leans heavily towards men. Men make up over 60% of sales across all generations and spend more on average than women. However, it’s interesting to note that, when broken down into categories, participation is about even in certain areas, mostly ones that are very wellness oriented. The broad preference among women for wellness products persists in the cannabis industry as well. And on the flip side, men prefer products that could be construed as more intense, like Concentrates. There is also a slight preference among women for CBD products.

Overall, the cannabis industry’s consumer base behaves according to long-established age and gender preferences, and newer but generally applicable ones. However, there are some cannabis-specific caveats, like the way that cannabis intersects with the wellness industry. This report will provide you with a detailed look at them.

Methodology

Data for this report come from participants in Washington store loyalty programs, which are linked up with Headset’s business analytics software. The data included are for 2019, from January 1 to August 31. Those data are cross-referenced with our catalog of millions of products to provide detailed information on market trends.

Headset’s data is very reliable, as it comes digitally direct from our partner retailers. However, the potential does exist for misreporting in the instance of duplicates, incorrectly classified products, inaccurate entry of products into point-of-sale systems, or even simple human error at the point of purchase. For this report, the data are also self-reported by loyalty program participants. Thus, there is a slight margin of error to consider.

Taking stock: Total sales by generation

Millennials have made up the majority of cannabis sales since legalization and continue to do so. They currently make up a little under 52% of total sales, with the remaining half split evenly between Generation X and the other three generations (baby boomers, the Silent Generation, and Generation Z). However, the real story here is about growth. Gen Z, as Generation Z is casually referred to, is just coming into the market, but are coming in hot. Their market share doubled from 3% in 2018 to about 6% in 2019. Each year has added one year of Gen Z to the market, so it’s reasonable to assume they could continue to make significant leaps until the entire generation is of legal purchasing age. If that trend continues unchanged, the entire market will be dominated by Gen Z and millennials in a few years.


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