There are many facets that influence sales trends within the cannabis industry. However, no question may be as alluring as: who is buying all this cannabis? At Headset we’ve reported on the ‘who’ of the cannabis customer before, but with new markets entering the industry, brands constantly emerging and consolidating, and other global factors continuing to influence supply and demand, it’s high time for a refreshed look at cannabis customer demographics.
In this report, we’ll explore the proportional sales contributions of customer demographic groups over time and compare these trends across the US and Canada. By analyzing basket and category wallet share trends, we’ll gain a better understanding of how different customers shop and what types of products they tend to purchase. Finally, we’ll use our new brand-level demographic analysis to better understand a specific brand’s customer base.
When we examine how different age groups and genders purchase cannabis in the US and Canada, we notice some interesting trends. For example, sales to both Male and Female consumers have grown in the US, with sales to Females increasing slightly more at 55% from Q1 2020 to Q4 2021, and sales to Males increasing 49% in the same time period. But when we compare the US with Canada, it seems Female consumers spend more money on cannabis in Canada, contributing 36.7% of total sales in Canada in Q4 2021, compared to 32.6% in the US. When we look at age groups in the US, it’s clear that Gen Z consumers are quickly aging into the market, with total market share rising from 8.3% in Q1 2020 to 15% in Q4 2021. Diving further into age groups, it seems different groups have different product category preferences as well. For example, younger age groups have an increased likelihood of purchasing Vapor Pens, while the opposite is true of Edibles.
All data is directly from Headset Insights and is aggregated across California, Colorado, Michigan, Nevada, and Washington cannabis markets in the US and Alberta and Ontario in Canada. Unless otherwise noted, the time frame for sales analyses is Q4 2021.
Let’s first begin our analysis by comparing sales of cannabis to men and women over the past couple of years. We can see that over the previous two years, sales to both Female and Male customers have grown, with sales to Female customers rising slightly faster than sales to Male customers. When comparing Q1 2020 to Q4 2021, sales to Female customers increased by 55% while sales to Male customers increased by 49%. While only about a third of total sales are to Female customers, their market share has increased slightly over the previous two years rising from 31.7% in Q1 2020 to 32.6% in Q4 2021.
Now let’s look at the proportion of total cannabis sales by age group over the previous two years. The most notable trend is the rapidly rising sales contribution of customers in the Generation Z group. Total market share has nearly doubled over the last two years, rising from 8.3% in Q1 2020 to 15% in Q4 2021. This is largely influenced by the fact that they are the only customer age group with new customers entering the available market on a daily basis by turning 21 years old. The market shares of each of the three older customer age groups have receded fairly evenly. Millennials are still the largest customer age group by a very wide margin, supplying nearly half of all US cannabis sales last quarter.
In this graph we can see the differences in sales share to each customer age group between US and Canadian cannabis markets during Q4 2021. One major difference is the higher sales share of Canadian Gen Z customers in comparison to their American counterparts. This is not surprising as the age for legal cannabis purchasing in many Canadian provinces is 19 compared to 21 in the US. An additional notable trend is the lower proportion of total sales to older customers in Canada. For example, at only 7.5% of sales, Baby Boomers contribute only half as many sales to the Canadian cannabis market as they do to the US cannabis market.
In this chart, we compare the relative Q4 2021 sales share of each demographic group, age and gender combined, and look at both the US and Canada. We can see that there are several demographic groups with nearly identical sales shares between countries such as Millennial Males (contributing almost exactly one third of total sales in both countries). However, in most demographic groups there are significant differences. For example, both Gen Z and Millennial Females logged much higher sales shares in Canada last quarter than their American counterparts. In fact, Female customers overall contributed 36.7% of total sales in Canada while in America that value was only 32.6%.
Now with a baseline of understanding about the relative total contributions of each demographic group, let’s explore how they choose to shop. This graph shows the average item price and the average basket size for each demographic group in Q4 2021, which indicates on average how expensive the products they purchase generally are, and how much they tend to spend in a single visit to a cannabis store. Firstly, we can see that across age groups, average item price stays fairly constant. However, across generations, Male customers tend to purchase more expensive products than Female customers. When we shift our view to basket size, we can see a very significant trend of larger average transaction sizes as customer age increases. For example, Female Baby Boomers spent an average of $70.07 per transaction in Q4 2021, 41% larger than Female Gen Z customers. Because the average item prices of these two demographic groups were nearly identical, we must conclude that Female Baby Boomers were simply buying more products per trip than Gen Z Females.
Some of the most fascinating trends we find in cannabis data are the differing preferences for various product categories across customer age groups. There are several categories that are clearly much more appealing to younger or older customers, while other categories tend to appeal to all age groups. On this graph, we can see that the likelihood of any customer to purchase a Vapor Pen is inversely correlated to their age. Additionally, Edible wallet share drastically increases along side customer age. Pre-Roll wallet share, on the other hand, is remarkably constant across age groups, indicating that the convenience and familiarity of a pre-rolled joint has universal appeal.
Instead of showing the category wallet share within gender, as we did for age groups on the previous graph, this chart shows the proportion of total sales within each category supplied by Male and Female customers during Q4 2021. Remember that the overall sales percentages to each gender were 32.6% Female and 67.4% Male, so any difference from those values within a given category indicates a shift away from the market average. We can see that there are a couple of categories that over-index toward Male customers, such as Concentrates and Flower, while others skew heavily toward Female customers. For example, nearly half of all dollars spent on Topicals in Q4 2021 were spent by Female customers.
For one final analysis of category-level demographic trends, we’ll take a look at two categories that various demographic groups engage with very differently. Here we see the relative category wallet share of each demographic group (including both age and gender), to the Concentrates and Edible categories. This graph indicates that younger customers give much more of their total spend to the Concentrates category than older customers. Additionally, within each age group, Male customers tend to spend more on Concentrates than Female customers. The trend for Edibles is the complete opposite with a higher wallet share among Female customers and relative spend growing steadily as customer age group increases. Female Baby Boomers’ wallet share to Edibles is more than three times higher than that of Male Generation Z customers.
At Headset, we recently launched a new custom report on Brand Demographic Affinity to help run more thorough analyses than ever before. These reports are incredibly powerful tools to help you better understand that all-important question of who is the customer. The graphs below show one of those available analyses for two prominent California Edible brands: Froot and PLUS.
These graphs show customer sales contribution over the previous 180 days, broken out by age group, to the category at large and to the individual Edible brand. For example, in the top graph we can see that 39.7% of California Edible sales were driven by Millennials but 40.4% of Froot Edible sales were from this age group. This results in a slight over-index (102) to the Millennial age group for this brand. Any index value greater than 100 indicates that the given age group spends relatively more on that Edible brand than the category average. An index value less than 100 indicates the opposite.
Here we can see that these two brands are succeeding with distinct customer age groups. Froot, a bright and playful value-priced brand is succeeding with younger customers, as indicated by the high 135 over-index to Gen Z consumers. PLUS, on the other hand, is doing much better with older customers, perhaps due to their more understated branding and experience-based product line.
This demonstrates that even with a solid understanding of the demographic trends of a certain category, there are many more nuances to explore at the more granular brand-level.
Understanding nuances in consumer behavior are vital to building both a successful brand and retail operation in today’s industry. Don’t bring products to market without granular demographic data to inform product positioning and your overall go-to-market strategy. Retailers can’t miss opportunities to build more loyalty and grow specific segments of their customer base without knowing where they’re spending their wallet. Demographic data is essential and Headset can provide specific analysis to further your understanding of your customer base or target audience. Learn more by requesting a demo.
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