Marijuana’s new crop of consumers has been less than anticipated. Nobody said it’d be easy, but nobody anticipated it’d be quite this hard to get Californians to buy legal weed. That’s been the dominant takeaway from the Golden State’s first year of legalized recreational marijuana sales.
The N.Y. Times recently reported on how the promised flourishing cannabis economy and corresponding tax windfall haven’t materialized.
Actually, sales fell! About $2.5 billion of legal cannabis was sold in California in 2018, which was half a billion dollars less than the year before, when just medical marijuana was legal, the sales tracking firm GreenEdge found.
A report from Areview Market Research and BDS Analytics recently estimated that spending growth on legal cannabis will speed up this year, hitting almost $17 billion worldwide, and ballooning to $31.3 billion in 2022.
In its annual State of Cannabis report, the cannabis delivery platform Eaze highlighted that the market is rapidly expanding beyond young men—even if, as Peter Gigante, the company’s head of policy research, noted, one in five people surveyed admitted to buying from an unlicensed source in the last three months.
“I think there’s a lot of focus on getting consumers into the legal market,” he said.
Part of that will certainly involve tailoring products especially to new consumers, who may not have been willing to try out cannabis when it wasn’t legal. So who are those new consumers? Here are some of the stats from Eaze’s report, which was based on data from 450,000 buyers and about 4,000 survey respondents.
That’s how much the number of baby boomer—or age 50 or older—consumers grew last year, making them one of the fastest growing demographics for cannabis use.
That’s how much baby boomers spent each month, on average—the most of any age demographic. (By comparison: Generation X-ers spent $89.24, millennials spent $72.94 and members of Generation Z spent $62.35.) Millennials are still the biggest group of Eaze customers, though.
That’s the percentage of cannabis consumers who are women. Mr. Gigante predicted that by 2022 it’d be 50-50.
Female and baby boomer cannabis consumers, the report found, are driving a surge in CBD oils and more wellness-oriented products.
In fact, the report found, the share of consumers who primarily use CBD products are baby boomer women: 21 percent.
Although no actual numbers were apparently available, the expected tax revenues were off substantially. That is one of the primary reasons so much cannabis is purchased on the black market. There are no 25% taxes.
There may be other reasons as well. Next week I’ll tell you about my personal experience with the cannabis community.