Cannabis industry reports

Getting to know the cannabis consumer with customer metrics

June 23, 2020

Executive summary

This report looks at the intersection of sales data and demographic data, both as two ways to look at the market, and as one integrated one. While Headset’s new Insights Demographics dashboard can pull cross-referenced demographic and sales data for any product category, this report is based on data from the Pre-Rolls category as an example. It juxtaposes demographic data with data on price sensitivity, segment preference, and accompanying purchases, aiming to provide a comprehensive view of the Pre-Roll customer base.

Introduction

What exactly are we talking about when we say consumer metrics? We’d define it as the perfect marriage of sales data and demographic data. Many of our previous reports have drilled down into one topic within each of those realms, but this one attempts to synthesize them. It’s based off of the work we’ve been doing on our new Insights Demographics dashboard, which is exactly what it sounds like: all of Headset’s real-time sales data and opt-in consumer demographic data, all in one place. The idea is to answer the all-important question in any consumer packaged goods environment: Who is buying what?

Within the Pre-Rolls category, we see a strong lean towards younger generations. Gen Z buys Pre-Rolls many times more often than the Silent Generation. Those generations are also interesting in terms of gender, as there isn’t much perceptible gender difference in affinity except in the oldest and youngest cohorts. From there, we drill deeper into the “what” part of that “Who is buying what?” question, looking at companion purchases — Flower is actually not as popular among Pre-Roll buyers as you’d think — and different segments within the Pre-Rolls category. 

This should surprise exactly no one, but the Silent Generation isn’t super into Cannagars/Blunts. Martha Stewart might be part of that cohort, but then again, not everyone her age hangs out with Snoop Dogg. We also examine segments by gender, which confirms some previously seen trends around CBD. Lastly we look into price, which also corroborates some previous data. Older generations tend to be significantly less price sensitive, while Millennials and Gen Z — still an overwhelmingly larger part of the cannabis consumer base — go for lower priced items. That doesn’t hold true across all segments, just most of them, but it’s especially true for CBD.

Overall, this report offers a lot of insight into one of the most iconic product categories in cannabis. Joints are a classic consumption method, and have made the transition to legal cannabis (where they’ve been slightly rebranded as Pre-Rolls) pretty seamlessly. But while we love offering detailed category reports like this, the really big news here is that data like these are available across all categories. Our Insights customers who add the Demographics dashboard can call up detailed customer data for any category or segment, all updated in real-time. Knowing what’s selling is vital, of course, but knowing who you’re selling it to is even more powerful.

Methodology

Data for this report comes from real-time sales reporting by participating cannabis retailers via their point-of-sale systems, which are linked up with Headset’s business analytics software.

The data included are from the 180 days prior to May 28, 20209, unless otherwise noted. Data comes from California, Colorado, Nevada, and Washington, and is from adult-use cannabis sales. Sales data are cross-referenced with our catalog of over 500,000 products to provide detailed information on market trends.


Demographic information comes from loyalty programs at Headset retailers. This information includes birth-year and gender for many customers as well as a customer number (much like a loyalty card number when you shop at QFC or Safeway).

As this report deals with age groups, we use the following definitions:

Generation Z: born 1997-2012, currently aged 8-23

Millenials: born 1981-1996, currently aged 24-39

Generation X: born1965-1980, currently aged 40-55

Baby Boomers: born 1946-1964, currently aged 56-74

Silent Generation: born 1928-1945, currently 75-92


Source: https://www.pewresearch.org/fact-tank/2019/01/17/where-millennials-end-and-generation-z-begins/


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.

Towards a total addressable market

When most of us think about a product’s total market, we think total revenue. But to get a complete picture of the market, we have to compare that to its customer base. Those metrics are presented for Pre-Rolls here as a side-by-side, allowing us to see that while Pre-Rolls accounted for only 9.1% of total sales in the last six months, just about a third of all customers bought a Pre-Roll. Instantly, that tells us that Pre-Rolls have a comparatively lower price point. But it also tells us that they’re immensely popular, and likely bought frequently as add-ons. If you were doing a deep dive into your consumer base, this would tip you off to look deeper into basket data for Pre-Rolls, finding out which products they’re most frequently bought alongside. Not to belabor the point, but that’s exactly what Insights as a whole, and Insights Demographics specifically, is designed to do.


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