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EXECUTIVE SUMMARY
- What you need to know
- Market predictions
- What consumers want & why
- Opportunities
- AI poised to play a pivotal role in future of cannabis retail and marketing
- Premium, wellness-focused products and market positioning
- Community activism required
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MARKET DYNAMICS
- Market context
- Market drivers
- The US expanded by 3.1% in Q3 2024
- Graph 1: quarterly real GDP growth, 2021-24
- Annual inflation slightly rose in November
- Graph 2: headline CPI and core CPI, 2021-24
- The unemployment rate edged up to 4.2%, but job creation rebounded after a sharp downturn in October
- Graph 3: unemployment rate, 2019-24
- Consumer sentiment reached an eight-month high
- Graph 4: consumer sentiment index, 2022-24
- Nearly 45% of consumers have seen their financial situations change for the better in the past year
- Graph 5: change in financial situation over the past 12 months, 2023 and 2024
- Households’ outlooks on their personal finances remains bullish
- Graph 6: opinions on financial future, 2024
- Graph 7: income growth in the past 12 months, by financial outlook, 2024
- Opportunity to highlight the value benefit of marijuana/cannabis use
- Graph 8: marijuana/cannabis use, by financial status, 2024
- Cannabis has room to grow with expanding legalization
- Graph 9: cannabis consumption where legal for recreational use, 2024
- Cannabis seen as “healthier” alternative to alcohol
- Graph 10: consumption of alcohol vs consumption of cannabis – trended use, 2020-24
- Growth in younger population bodes well for cannabis retailers
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CONSUMER INSIGHTS
- Consumer fast facts
- Consumer fast facts (cont.)
- The cannabis user
- Majority of adults are users or open to use
- Graph 11: experience with and interest in cannabis, by segmentation group, 2024
- Women under index in cannabis use
- Graph 12: experience with and interest in cannabis, by gender, 2024
- Cannabis use declines with older generations
- Graph 13: experience with and interest in cannabis, by generation, 2020-24
- Hispanics over index in cannabis use, and Asians show interest
- Graph 14: experience with and interest in cannabis, by race/ethnicity, 2020-24
- Cannabis use is stronger among those with restricted financial situations
- Graph 15: experience with and interest in cannabis, by financial status, 2020-24
- Frequency of use and dispensary visits
- Cannabis use is habitual
- Graph 16: frequency of use in past three months – any cannabis or CBD (NET), 2024
- Marijuana/cannabis is more frequently used than CBD-only products
- Graph 17: frequency of use in past three months, 2024
- Gen Z is more apt to be daily cannabis users
- Graph 18: daily use of cannabis or CBD (NET), by generation, 2024
- Majority of cannabis users visit dispensaries many times per month
- Graph 19: cannabis dispensaries visitation frequency, 2024
- Cannabis formats
- Legacy formats drive use of inhaled and ingested cannabis
- Graph 20: experience with and interest in cannabis, by format, 2024
- Innovative formats spark significant interest; heightened interest levels highlight various opportunities for growth
- Graph 21: experience with and interest in cannabis, by format (NET), 2024
- Emerging formats offer discretion, customization and health benefit
- Dispensary discovery
- Dispensaries are primarily discovered through word of mouth
- Graph 22: source of dispensary discovery, 2024
- Gen Z go online to discover dispensaries
- Graph 23: source of dispensary discovery, by generation, 2024
- Celebrities’ influence creates awareness and mainstream acceptance
- Factors in dispensary choice
- Convenience and price are key drivers in choosing a dispensary
- Graph 24: factors in dispensary choice, 2024
- Gen Z looking for selection and information, while older generations prioritize location
- Graph 25: factors in dispensary choice, by generation, 2024
- Desired dispensary attributes
- Friendly customer service is essential
- Graph 26: desired attributes in a dispensary, 2024
- Gen Z looking for experiential shopping experience
- Graph 27: desired attributes in a dispensary, by generation, 2024
- Attitudes and behaviors toward dispensaries
- Dispensaries need to spread goodwill and provide an educational experience
- Giving back and providing education can create personal connection and loyalty
- Graph 28: attitudes toward dispensaries, 2024
- Younger generations looking for a personal connection to their dispensary of choice
- Graph 29: attitudes toward dispensaries, by generation, 2024
- Loyalty programs are a vital tool for customer retention
- Graph 30: opportunities for dispensaries, 2024
- Appeal to younger generations with experiences and technology
- Graph 31: opportunities for dispensaries, by generation, 2024
- Accessibility, confusion and stigma present challenges
- Graph 32: challenges for dispensaries, 2024
- Younger shoppers more likely feel confused and embarrassed
- Graph 33: challenges for dispensaries, by generation, 2024
- Product trial motivators
- Leverage referral offers and promotional pricing to encourage trial
- Graph 34: product trial motivators, 2024
- Gen Z attracted to products with appealing formats, packaging and flavor
- Graph 35: product trial motivators, by generation, 2024
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INNOVATION AND MARKETING STRATEGIES
- Marketing and advertising
- Goodwill initiatives can make a difference
- Community activism
- Making cannabis accessible to those in need
- Giving back to those who have served
- Elevating the cannabis shopping experience
- Cannabis lounge offers communal and artistic experience
- Creating a memorable experience
- Strategic pricing and promotions are essential
- Holiday price promotions will boost engagement
- Ongoing ways to save + daily deals
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APPENDIX
- Market definition
- Consumer research questions
- Consumer research methodology
- Generations
- Abbreviations and terms
In states where recreational cannabis is legal, 35% of adults aged 22+ use cannabis for this purpose. Recent trends, such as the rise of ‘sober curious’ behaviors, have driven growing interest in cannabis as an alternative to alcohol. Interest is further fueled by the growing recognition of cannabis’ health and wellness benefits as well as the increasing variety of cannabis formats that allow for discreet and convenient use.
Despite positive growth trends, cannabis dispensaries encounter distinct challenges when it comes to promoting their businesses online and in social media due to strict restrictions and platform guidelines. As a result, word-of-mouth marketing plays a key role in raising awareness, while reward programs are vital for customer retention.
As the industry evolves, cannabis retailers must adapt positioning and marketing strategies to effectively reach current and potential users. Dispensaries are shifting away from purely transactional and less personal environments to spaces that prioritize aesthetics, design, technology and consumer comfort. Incorporating AI technology, digital elements, and immersive environments can enhance the shopping experience, while also educating and empowering consumers. This approach will help dispensaries appear more relatable and aligned with the values of their core audience.
This report looks at the following areas:
- Factors that are influencing the US cannabis market
- The profile of the cannabis user along with format preference and frequency of use
- Frequency of dispensary visits, how users learn about dispensaries, and what’s important when choosing where to shop
- Attitudes and behaviors toward dispensaries, including opportunities and challenges from the consumer perspective
- Product trial motivators
Dispensaries are becoming more immersive, tech-driven environments that educate and empower consumers, and represent the values of their target community.
Vince DiGirolamo, Director, North America Reports
Market Definitions
This Report investigates the role of the dispensary and related marketing as it relates to how people shop for cannabis. Data draws from states where recreational cannabis use, in addition to medical use, is legal. For the purposes of this Report, Mintel has used the following definitions:
- THC: Tetrahydrocannabinol, the component of cannabis that’s primarily responsible for the effects of marijuana on a person’s mental state.
- Recreational cannabis includes legal adult use of THC products.
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