In July of 2019, Illinois became the 11th state to allow the adult use of recreational marijuana. Its state legislature is the first to legalize selling the drug. Marijuana remains illegal at the federal level, for now. But that hasn’t stopped blue-chip consumer packaged goods (CPG) companies from exploring cannabis-based products as many believe that federal legalization in the U.S. is only a few votes away.
Early Adopters of Cannabis
Constellation Brands is one of the larger companies betting on the future growth of marijuana having invested heavily in the Canadian marijuana company, Canopy.
A risky venture, perhaps, as marijuana will compete directly with the company’s core business of making and selling alcohol, wine, and spirits in the broader consumer psychotropic product category. But, if it works, it provides a fertile testing ground for the eventual legalization of marijuana in the U.S.
Caffeine products such as energy drinks, soda, and coffee also fall more broadly into the consumer psychotropic product category. Companies like Pepsi are taking a hard look at the cannabis sector as a potential growth market for them.
ThinkNow fielded a nationally representative survey among respondents aged 21 and older to get a basic understanding of consumer sentiment and demand for cannabis-related products. Some of the questions we asked are noted below, along with feedback from respondents. Take a look:
How big is the potential cannabis market as of today?
We asked consumers to select the statement that best describes their feelings about each of the following activities: gambling, smoking cigarettes, drinking alcohol, using recreational marijuana/cannabis, using medical marijuana/cannabis.
For this post, we’ll zero in on using recreational marijuana/cannabis.
Usage is consistent across the different ethnic groups except for Asians who are significantly less likely to state that they use recreational marijuana regularly or on occasion. Interestingly, this is consistent with the inverse, I’m against doing this myself, but I don’t mind if others do / I’m completely opposed to this.
The data suggests that most people across all ethnicities are against using recreational marijuana/cannabis themselves but don’t mind if others do or are completely opposed to it. Asians are the most likely to hold this view, which eludes to cultural biases that marketers should be aware of and know how to navigate around.
While Hispanic population growth has captured the headlines in recent years, Asians are the fastest-growing minority group in the U.S. now. If cannabis companies want to hit the mainstream when marijuana is legalized federally, marketers will have to put in the work to drive adoption among those likely to purchase while being respectful of those who do not.
For respondents against the use of marijuana/cannabis but not alcohol, we were curious as to why one was preferable over the other. Overwhelmingly, the most significant barrier is its legal status.
The good news for the cannabis industry is that marijuana’s legal status might be changing soon. But the bad news is the stigma. Marijuana is heavily perceived as a drug by 35% of respondents. Furthermore, almost 30% of respondents were brought up to believe marijuana is wrong, and it will be hard to change that mindset.
Brand Leaders in the Cannabis Industry
As more states legalize marijuana across the U.S., the fight for market share will heat up among established brands. Below are the current market leaders driving awareness among respondents who have used marijuana in the past 30 days:
There isn’t a clear leader in the industry from a brand awareness perspective, but Nature’s Medicine, Omaha Farms, and Caviar Gold take the top 3 spots.
Consumer Acceptance Far From Widespread
While there is a lot of buzz around recreational marijuana use, intermittent legalization is a tremendous barrier to widespread acceptance, as is overcoming the widely held perception of its drug status.
The majority of consumers in the U.S. are not as open to using marijuana as compared to alcohol, and advertising marijuana is destined to the same fate as cigarette ads.
Our data did show hope for the cannabis industry, however, with younger generations who weren’t necessarily raised with the same stigma surrounding marijuana as older generations.
Recreational marijuana has a long way to go before it hits the mainstream, but savvy consumer product brands will at minimum begin to research how and if this product fits into their future offerings and how they can do so responsibly.