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The Consumer Potential of Retail Cannabis

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The Story of Cannabis: What Investors Need to KnowAnatomy of a Cannabis PlantA Quality Cannabis ProductThe Rise of OrganicA Sustainable Cannabis ProductTGOD6 Non ActiveTGOD7 ActiveComing soon

The Potential of Retail Cannabis

The Consumer Potential of Retail Cannabis Products

“Eat, drink, and be merry” is becoming an increasingly common mantra for cannabis consumers.

It’s also a refrain that speaks the evolving demand picture for cannabis in a post-legalization environment, as it becomes clearer what products consumers want to see coming from the sector.

Today’s infographic comes to us from The Green Organic Dutchman, and it dives deeper into the profound investor potential in cannabis retail products, like edibles and concentrates.

The Allure of Retail Products

As the business of cannabis matures, several trends are directing its course. Consumer spending in North America is ballooning overall, but growth largely depends on the product type.

Product typeFlowerEdiblesConcentratesOther
2017$4.2B$1B$1.9B$1.3B
2022E$10.5B$4.1B$10.5B$4.1B
Trend↓ 14pp total share
(from 50% to 36%)
↑ 2pp total share
(from 12% to 14%)
↑ 13pp total share
(from 23% to 36%)
↓ 1pp total share
(from 15% to 14%)
CAGR20%33%41%26%
Source: Arcview and BDS Analytics

While seasoned consumers prefer smoking cannabis, other consumers are actually drawn to alternative forms that the plant comes in. Proprietary research from New Frontier Data reveals the products that most appeal to potential U.S. cannabis consumers:

  • 69% solid edibles
  • 54% liquid edibles
  • 44% topicals
  • 36% joints or blunts
  • 32% vaporizers (vapes)
  • 29% tinctures
  • 21% concentrates
  • 19% pipes / water pipes

The rising popularity in retail cannabis-derived products is being directed by consumers – and they’re using products for everything from relaxation to pain management.

Variety is the Spice of Life

Food and beverages, along with wellness products, are proving to be a huge draw.

Food & Beverages

Most people are aware of pot brownies, even if they haven’t tried them. The best known cannabis edibles are baked goods, and these days they’re also found as candy and chocolate.

Cannabis-infused drinks are also growing in popularity, in both alcoholic and non-alcoholic forms. Cannabis-infused water, juice, tea, coffee, and even kombucha are legally making their way onto grocery store shelves.

Of course, before edibles can become fully mainstream, there are a few considerations: stricter regulations for product consistency, not to mention appropriate packaging and labeling to keep them away from children. As an example, Canada will start allowing edibles and other products in October 2019, as they iron out these kinks a year after full legalization.

Health & Wellness

Cannabis has been treasured for its medicinal and therapeutic properties for centuries. In the present, it has re-emerged in an intersection with the wellness industry. In fact, many consumers are already using CBD-infused products in their daily life:

  • Relieving anxiety
  • Enhancing sleep
  • Managing pain
  • Personal care

Importantly, retail cannabis products are also helping consumers reduce their dependence on medications, and to kick unhealthy habits.

A Consumer-Driven Future

Consumers are not just eating cannabis up, but they are also drinking, vaping, dabbing — and the list goes on.

For these reasons, investors should keep an eye on the fast-changing multitude of products and trends within the sector, as they provide some of the best opportunities going forward.

In the final part of this series, we’ll dive into the role that the cannabidiol (CBD) compound plays in the cannabis market.

The Story of Cannabis: What Investors Need to KnowAnatomy of a Cannabis PlantA Quality Cannabis ProductThe Rise of OrganicA Sustainable Cannabis ProductTGOD6 Non ActiveTGOD7 ActiveComing soon

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CBD Oil vs. Hemp Oil: What’s the Difference?

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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

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
  • Relaxation
  • 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, with no THC
  • Broad-spectrum CBD oil: Contains CBD among other cannabinoids including low levels of THC

These oils are used in a wide variety of consumer products such as beverages, beauty products, and even pet food.

Hemp Oil

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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Cannabis

Consumer Archetypes Shaping the European CBD Industry

This infographic visualizes the non-consumer and consumer archetypes that could be position Europe as the leader in global cannabis consumption.

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Consumer Archetypes Shaping the European CBD Industry

View the high-resolution of the infographic by clicking here.

With a colossal base of 500 million potential cannabis consumers, and laws that are loosening at a steady pace, Europe could soon emerge as the global cannabis leader.

Cannabidiol, better known as CBD, has become one of the most popular forms of cannabis in the European market, but little is known about the consumers who are reaching for it.

New Frontier Data identified a spectrum of archetypes in an effort to better understand their consumption patterns.

What Makes Europe Different?

Although Europe’s cannabis market is still in early stages, the proximity of countries could be instrumental in how quickly it grows. Widespread legalisation could be accelerated due to neighbouring countries lowering the barriers for others—also known as The Domino Effect.

A total of 22 countries have now legalised some form of medical cannabis, while other countries have decriminalised recreational cannabis or have pledged to fully legalise it in the coming years.

There is a 60% to 70% chance that cannabis will be legal across Europe within the next three years, but more research is key to unlocking growth in this market—and that includes gaining a full understanding of what consumers want.

CBD Consumer Archetypes

New Frontier Data identified five CBD consumer archetypes and four non-consumer archetypes, based on their attitudes, beliefs, and experiences. The CBD consumer archetypes are as follows:

  • The Exuberant & Intense (11%): As advocates of the CBD movement, this group is devoted to trying different products and spends more than any other archetype in the process.
  • The Integrative & Consistent (29%): CBD has become an essential component in achieving a healthy lifestyle for this group, resulting in them consuming it at least once a week and putting them in second place for highest overall spend.
  • The Sceptical & Limited (20%): CBD products are used in moderate frequency, but have not been incorporated into this group’s lifestyle as they are generally wary of health claims. However, more information may soothe the concerns of this group over time.
  • The Receptive & Reserved (23%): Consuming a narrow range of products in moderate frequency, this group are more comfortable trying products based on recommendations from friends and family. Over time, as more people in their inner circle try different products, they will also gain confidence to follow.
  • The Ambivalent & Experimental (17%): This group will not consider purchasing CBD products themselves, but will consume products when they are shared by friends and family. While their beliefs are more conservative, new products could tempt them to make CBD part of their routine.

Interestingly, up to 98% of surveyed consumers claim that CBD has positively affected their quality of life in some way. In terms of product preferences, tinctures/oils are a consumer favourite, with a large portion of people using CBD to unwind.

Non-consumer Archetypes

Less than half of all non-consumers have heard of CBD. While some of them are not open to changing behaviors, others could soon convert to a consumer archetype, provided information and legalisation becomes more commonplace.

  • Unaware & Uninterested (43%): Having never come across CBD products online or in store, this group is broadly uninterested in learning more, but may be open to experimenting as the market becomes more regulated.
  • Knowledgeable & Primed (28%): This group expresses a strong belief in the benefits of CBD and their curiosity to learn more makes them the most likely group to become consumers in the next six months.
  • Informed & Indifferent (19%): A wide exposure to CBD products does not translate to intent to purchase, potentially due to this group’s lack of awareness regarding CBD’s beneficial properties.
  • Cautious & Curious (10%): Despite a strong curiosity towards CBD products, they remain apprehensive about the safety and legality of them.

Overall, 34% of non-consumers are curious about trying CBD products—which could yield significant growth for the cannabis industry in the coming years.

A New Successor to the Throne

The recent COVID-19 outbreak has also sparked major discussion around the use of cannabis. Some parts of the world have declared it as “essential”, as consumers use products to alleviate pandemic-fuelled anxiety, which has resulted in a huge sales boost for the industry.

This will likely translate to Europe, where almost half of CBD consumers claim its therapeutic benefits are their primary reason for use.

The reality is that the potential for European cannabis growth is significant, and to achieve this, both consumer and non-consumer motivations should be considered.

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