How Consumers Are Shaping Cannabis Consumption
The cannabis industry continues to reach new heights, and according to market analysts, global legal spending on cannabis could reach $32 billion by 2022 — a majority of which is thanks to U.S. and Canadian consumers.
What’s driving the evolution of the market?
Cannabis is in the midst of a shakeup, and today’s infographic from Ionic Brands highlights how consumers are significantly shaping the landscape of cannabis.
Cannabis Concentrates: A New Frontier
For years, joints and blunts dominated the industry—but sales of traditional flower are swiftly losing ground to new products. Here’s how cannabis consumer spending looks across North America in a few short years:
|% Market Share||↓ 14pp|
From 50% to 36%
From 12% to 14%
From 23% to 36%
From 15% to 14%
Cannabis consumers are clearly moving away from simply smoking the product. Concentrates are the fastest growing industry segment, which is not surprising since they’re needed to make all sorts of products, from edibles to topicals and tinctures. Cannabis concentrates are also discreet, convenient, and more potent than other cannabis products, all of which contribute to their consumer appeal.
In fact, these changing preferences are disrupting other mammoth industries. Take JUUL Labs for example: the inconspicuous, smokeless device is chipping away at the tobacco industry, and now accounts for almost 73% of the e-cigarette market. JUUL’s growth is proof that consumers are driving the market, and this trend is also reflected in cannabis.
Among all cannabis concentrate types, vaporizers (vapes) overwhelmingly come out on top in established markets, accounting for 43% of sales in Colorado, 70% in Oregon, and 79% in California.
|Concentrate Sales (2018, Jan-Jun)||Vape||Wax||Shatter||Live Resin||Oils||Others|
Branding is Everything in Cannabis
The cannabis concentrates space is becoming increasingly sophisticated. With more money to be made from less product, concentrates offer higher margins as well. But in a fragmented market, brand recognition is arguably the biggest factor guiding consumer demand.
Returning to JUUL’s example, the company’s branding played a big hand in its accelerated trajectory—and in grabbing the attention of major players like Altria, the corporate parent of Marlboro. Altria made a landmark investment into 35% of JUUL in December 2018, bringing the latter’s value up to $38 billion.
In the nascent cannabis industry, consumers are still wondering who they can trust. A recent survey revealed that 72% of cannabis consumers rated branding as somewhat or very important in assessing a product’s quality and safety. Branded cannabis products are on the rise, but they’re not as established as Starbucks coffee or Apple iPhones quite yet.
When done right, cannabis concentrates brands are able to capture quite a significant chunk of the market:
Top 10 brands: 48.4%
All other: 51.6%
Top 10 brands: 46.6%
All other: 53.4%
Top 10 brands: 59.7%
All other: 40.3%
In a budding industry, such brand market domination is an impressive feat. However, a few barriers still stand in the way of these brands’ ability to scale on a national level: cannabis and related products aren’t legal in every U.S. state, while diverse state regulations also complicate the process.
Cannabis consumer brands that can spread out into multiple states, and develop consumer trust, will emerge as winners in this new, dynamic market.
Mapped: The European CBD Landscape in 2020
This graphic explains the innately complex legal status of CBD products in Europe and highlights the countries leading the CBD charge.
Mapped: The European CBD Landscape in 2020
To say CBD has risen in popularity over the last decade is an understatement.
Not only have CBD consumer products rapidly infiltrated a long list of industries, new research discoveries continue to prove their therapeutic benefits. By 2023, the European CBD market is estimated to reach €1.4 billion.
However, a big problem remains—there is an incredible amount of uncertainty surrounding what is legal, and what isn’t. The above infographic from Elements of Green sheds some light on the innately complex legal status of CBD products in Europe.
The Great CBD Debate
CBD—short for cannabidiol—is a non-psychotropic compound produced by cannabis plants.
While most European countries have legalised it in some way, the caveat for many is that it must be extracted from industrial hemp, thus containing less than 0.2% THC—the intoxicating compound also found in cannabis. On the other hand, countries such as France and Norway only permit CBD isolate (the pure form of CBD) with no THC.
In 2019, the European Food Safety Authority (EFSA) designated CBD products as a novel food. This means that companies should seek authorisation to bring products to market, although it is not required by law.
However, the industry has now hit a fork in the road, as the European Commission (EC) recently announced it will be suspending applications for novel foods status while it determines whether or not certain CBD products should be labelled as narcotics instead.
The Legal Landscape in 2020
As the industry flip flops between regulations, consumers and investors need to understand that each country has its own laws surrounding the use of CBD.
|Country||CBD Legal Staus|
|🇦🇹 Austria||Legal grey area (legal lean)|
|🇧🇦 Bosnia and Herzegovina||Illegal|
|🇧🇪 Belgium||Legal grey area (restricted lean)|
|🇨🇿 Czech Republic||Legal grey area (legal lean)|
|🇭🇷 Croatia||Legal grey area (legal lean)|
|🇪🇪 Estonia||Legal grey area (legal lean)|
|🇫🇮 Finland||Legal grey area (restricted lean)|
|🇭🇺 Hungary||Legal grey area (legal lean)|
|🇮🇸 Iceland||Legal grey area (legal lean)|
|🇮🇪 Ireland||Legal grey area (restricted lean)|
|🇮🇹 Italy||Legal grey area (restricted lean/legal for medical use)|
|🇱🇻 Latvia||Legal grey area|
|🇱🇮Liechtenstein||Legal grey area|
|🇲🇹 Malta||Legal grey area/legal for medical use|
|🇲🇰 North Macedonia||Legal for medical use|
|🇳🇴 Norway||Legal for medical use|
|🇵🇹 Portugal||Legal for medical use|
|🇷🇸 Serbia||Legal grey area (restricted lean)|
|🇬🇧 United Kingdom||Unrestricted|
While a handful of European countries have made it illegal to import, buy, or possess CBD, the vast majority have legalised CBD products that either comply with the Novel Foods Act, or can be obtained from a licensed medical practitioner.
Of these countries, Germany and the UK lead the European CBD market, followed by Switzerland, Austria, Spain, and Greece.
A Call For Change
A progessive stance on cannabis legalisation combined with increasing consumer demand has led to several countries showing remarkable growth, such as Poland, Bulgaria, Netherlands, and Luxembourg.
Luxembourg in particular presents a compelling growth story, as it plans to fully legalise adult-use recreational cannabis in 2021, which would make it the first European country to do so.
Despite its small size, Luxembourg could in fact be instrumental in encouraging neighbouring countries to implement similar reforms, also known as the neighbour effect.
Growing Pains of a Nascent Industry
Considering each country has its own unique restrictions in place, CBD consumers should educate themselves on the regulations and laws relevant to them.
Despite these often confusing laws and restrictions, it is clear that demand for CBD products is growing exponentially. As a result, the continent may have the potential to overtake North America as the largest CBD market in the world.
CBD Oil vs. Hemp Oil: What’s the Difference?
CBD Oil vs. Hemp Oil: What’s the Difference?
For many consumers, cannabis plays a significant role in the treatment of medical conditions and managing general well-being. As a result, certain products have seen a rapid increase in popularity in recent years.
But while awareness of these products is at an all-time high, false or misleading information continues to cause confusion, and creates an unnecessary barrier for consumers who want to experiment with, or try different products.
For example, 69% of cannabidiol (CBD) products are reported to have inaccurate labeling, so it’s no surprise that some consumers are uncertain about the suitability of these products and are hesitant to invest.
Today’s graphic from Elements of Green dives into the differences between popular cannabis products, CBD oil and hemp seed oil—more commonly known as hemp oil— and the common misconceptions that are inhibiting consumers from entering the space en masse.
Same Plant, Difference Characteristics
Typically, both CBD oil and hemp oil originate from the hemp plant, a non-psychoactive cannabis plant. Therefore, it typically does not result in any intoxicating effects. However, many consumers mistakenly believe that CBD or hemp products will get them high, when in fact it is the marijuana plant—hemp’s psychoactive cousin—that can induce mind-altering effects.
Even though both oils are extracted from the same plant, they each have very different characteristics and uses that consumers should be aware of.
CBD oil is extracted from the flowers, leaves, stems, and stalks of hemp plants, and contains high levels of the naturally occurring CBD compound. Various CBD oil formats include tinctures, vape oil, and capsules, which are commonly used for their proven therapeutic benefits, such as:
- Pain management
- Stress relief
- Treatment of medical conditions such as epilepsy, schizophrenia, multiple sclerosis, and arthritis
- Reduction in anxiety
- Sleep aid
When it comes to product labeling, consumers should be aware that different types of CBD oils exist, depending on the chemical compounds—known as cannabinoids—they contain.
- CBD Isolate: Pure CBD, with no other cannabinoids such as THC
- Full-spectrum CBD oil: Contains CBD among other cannabinoids, including THC
- Broad-spectrum CBD oil: Contains CBD among other cannabinoids, with no THC
These oils are used in a wide variety of consumer products such as beverages, beauty products, and even pet food.
Hemp oil, on the other hand, is extracted from hemp seeds and contains no cannabinoids such as CBD and THC. It is used more like a traditional cooking oil, but can also be found in topical creams and lotions.
More recently, hemp oil is being hailed for its use in industrial products such as concrete, bio-plastics and fuel. While it has huge potential for use in both consumer and industrial products, its benefits differ slightly to CBD oil:
- Source of plant-based protein and rich in fatty acids and antioxidants
- Reduces inflammation
- Reduces severity of skin conditions such as acne, eczema, or psoriasis
- Anti-bacterial properties
- Could reduce PMS or menopause symptoms
Consumers should ensure that hemp oil is listed as the active ingredient on the product’s packaging, but it may also be listed as cannabis sativa seed oil.
Busting the Myths
While there is strong scientific evidence to support the efficacy of CBD oil and hemp oil, companies need to commit to both appropriate and safe labeling regarding dosage levels and ingredients.
Following that, previously held stigmas and misconceptions should slowly disintegrate as these products become more widely available and consumers increase their knowledge and understanding of their benefits.
Considering that the popularity of cannabis consumer products has only exploded over the last decade, initial confusion surrounding them is to be expected, and the true potential of these products is yet to be realised.
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