It’s a little early to tell if October 17th will become a national holiday in Canada, but it’s still a day for celebration. As we congratulate Canada as the first industrialized nation to legalize cannabis as they did a year ago, we want to share some of our insights on what motivates cannabis consumers north of the 49th parallel.
Similar to the groundbreaking studies we’ve done on the US market to identify market segments, the Canadians surveyed fell into the same four segments. And like our first US study in 2014, Canadians primarily fell into two of the segments: Outsiders (28%) and Traditionalists (38%). In 2014 the US market Outsiders comprised 44% and Traditionalists 26% of the surveyed respondents. Outsiders tend to generally agree with legalization and consume cannabis, but they are much more conservative in how they express themselves and communicate about cannabis. We’ve seen over time that as legalization becomes mainstreamed, individuals in the segment tend to drift towards the Indie segment.
A broad stroke characterization of the Canadian market would be they’re “practical.” Canadian adult consumers who responded to the survey have embraced cannabis as a practical move. In essence, it was the time to do it. Whereas in the US legalization was viewed as a social shift driven by urban progressives in Western states. This is supported by the data point that 34% fewer Idealists make up the Canadian market. Idealists are a segment that favors progressive change for the sake of it.
Where we see the most significant variance between US and Canadian markets is in those segments most embracing and supportive of legalization. Indies and Idealists are change proponents. In the US these segments represent 52% of the surveyed population and 34% in Canada. We expect that in future surveys the percentage of Canadian Indies and Idealists will move towards the 50% mark as the population is more comfortable speaking out in support of legalization.
We’d be remiss if we didn’t mention the Traditionalists. As a refresher, the Traditionalists segment is resistant to change. While most do not favor legalization nor the use of cannabis, there is a small percentage that does consume. Our interpretation is that the black market was, and will continue to be a preferred commercial channel for some cannabis consumers.
Statistics Canada released interesting information indicating about half of all consumers do so for non-medical reasons only. And those who do consume for medical reasons are more likely to consume daily.
Viewing our findings through the lens of the StatsCan data, we concluded the following:
Our conclusion: medical users value quality and safety in their products. Thus it’s not surprising for them to be more law abiding and trusting of legal channels.
When asking Canadian consumers if they intend to buy cannabis for medical use, we received the following breakdown of responses.
What we have learned from our US research is that for Indies, Outsiders and Idealists, the “YES” column numbers are going to get larger. As cannabis mainstreams in Canada individuals will be more comfortable sharing their cannabis intentions.
The data indicates that about 60% of medical cannabis buyers will buy at least once per month. And about 25% will buy on a near weekly basis. Our initial take on this buying frequency is tied to purchase limits, higher consumption volumes among medical patients and possibly influenced by pay periods.
Our past research has found that the vast majority of medical cannabis consumers do so to alleviate symptoms associated with chronic pain, sleeplessness and anxiety/depression. These findings are consistent in both the US and Canada. Additionally for the US population, our studies have revealed more therapeutic consumption of cannabis occurs in adult use states than in medical legal states.
Current limited availability of form factors other than flower and concentrates limits growth in new consumer groups. Particularly those who by preference or physical ability cannot consume by smoking cannabis in flower form.
As a result of the flower and concentrates being the dominant form factor of products in Canada (though that’s ending soon), younger males tend to be the primary consumer group for adult use cannabis. They tend to be those most familiar with cannabis and have disposable incomes available for procuring cannabis products.
Canada’s legal framework delayed allowance of edibles into the market approximately one year. That year buffer ends October 17, 2019, when edibles will be allowed into Canadian retail stores.
Though both Canadian and US markets are still in their very early days, we believe in time edibles will become the product form of choice. Flower starts strong in legal markets but loses favor while edibles gain prominence. We have not defined why this is the case, our calculated assessment is that smoking in general has become less socially acceptable. Discretion and portability is also a driver of consumer interest in non-combustible forms of cannabis.
When considering the development of new brands or products, there’s little distinction in the minds of consumers about medical and adult use cannabis brands. As in the US, most frequent answers to questions about the differences between medical and adult use brands are “There is none” or “I don’t know/have no idea.”
Canadian consumers are more aware of the issues of potency and ingredients. The level of THC, higher for medical, was mentioned by Canadian consumers more than twice as often as US consumers. There’s also an awareness of cannabidiol (CBD) that’s twice that in the US. The US has since passed legislation triggering an onslaught of CBD headlines.
It’s safe to say the next round of research CBD will benefit from a lot more consumer awareness.
Of interest to marketers is another theme that is consistent in the US. That being, when asked what steps could a brand take to appeal to more people, the vast majority of respondents (34%) stated they “don’t know.” The second most mentioned tactic was lower pricing (11%) but the third highest response was advertising. This is a signal to cannabis brand marketers that brands driven by a marketing strategy with strong that visibility and awareness objectives is likely to pay off in increased consumer demand.
The Canadian market, much like the legal states in the US, is very immature. There is a great deal of consumer interest but developing a true national brand is a longer term proposition that will require a significant deal of consumer maturing and education. Brands that deliver on consumer expectations are in a better position to have long term success. Thus the big question becomes, “what do consumers expect from a cannabis brand?” and we’ll present those insights in future posts.
In summary, while there are differences, our initial insights into the Canadian consumer indicates more than a few similarities. Where the real differences exist is in the implementation of legal frameworks to govern the emerging cannabis market. Time will tell if Canada’s experiment in practicality on a national level, or the US’s patchwork approach, yields bigger wins for consumers and their respective tax dollar loving, but generally cannabis hating, governing bodies.