As cannabis legalization sweeps across the United States, the cannabis retail industry is experiencing significant growth and change, presenting opportunities for the Consumer Packaged Goods (CPG) industry.
In this blog post, we'll explore some of the latest trends in cannabis retail and what they mean for both consumers and businesses.
Cannabinoid products, particularly those containing CBD, are expected to reach sales of $45 billion by 2024. CBD has become a popular ingredient in various product categories, from food and candy to beauty and wellness, making it a highly sought-after item by consumers.
Research has shown that there is no typical cannabis consumer, but they are typically around 42 years old, work full-time, live in cities, and are social, creative, and outdoorsy. They are willing to spend more for quality time, try new products, and are generally more satisfied with life. In fully legal US states, two-thirds of adults consume cannabis or are open to it.Dispensaries are the primary channel for CBD manufacturers and retailers, as 32% of current cannabis consumers consume for recreational/social and health/medical reasons.
With growth like this we are bound to see some significant trends impacting the industry.
Let’s explore them...
1. The Diversification of Products
One of the most significant trends in cannabis retail is the diversification of products. Gone are the days when cannabis was only available in flower form. Today, consumers can find a wide range of products, including edibles, tinctures, concentrates, and topicals. This diversification of products has led to an increase in consumer interest and demand, as people seek out new and innovative ways to consume cannabis. The CPG industry can take advantage of this trend in cannabis retail.
2. The Rise of CBD
CBD, or cannabidiol, is a non-psychoactive compound found in cannabis that has exploded in popularity over the past few years. CBD is believed to have a variety of health benefits, including reducing anxiety and inflammation, and it's now available in a wide range of products, including oils, tinctures, gummies, and more. With the passage of the 2018 Farm Bill, which legalized hemp-derived CBD products, the market for CBD has exploded, and it's now a popular ingredient in everything from beauty products to pet treats.
3. The Online and Delivery Services
Convenience is a significant factor influencing consumer choices, and consumer preferences and behaviors with cannabis are beginning to take shape. As more states legalize cannabis, online and delivery services are becoming increasingly popular, allowing consumers to purchase cannabis products from the comfort of their own homes and have them delivered right to their doorsteps. While some states still prohibit the delivery of cannabis products, others have embraced the trend, with businesses like Eaze and Drizly leading the way.
4. Focus on Education
Education is crucial as consumers are becoming increasingly interested in cannabis, but are overwhelmed by the product varieties, dosages, and branding available to them. As the cannabinoid market continues to expand, the need for consumer education will grow. This focus on education is helping to destigmatize cannabis use and is empowering consumers to make informed decisions about their purchases.
5. Embracing Technology
Finally, cannabis retailers are embracing technology to improve the customer experience, from point-of-sale systems to loyalty programs. Some retailers are even using virtual reality to allow customers to explore products and learn more about them before making a purchase. As the industry matures, we can expect to see even more innovative products, services, and technologies emerge, helping to make cannabis more accessible and appealing to consumers of all backgrounds. For the CPG industry, understanding and leveraging these trends will enable them to succeed in this evolving landscape.