US Cannabis Retail Market Report 2023
"The cannabis industry is on a positive growth trajectory thanks to expanding legalization and increased consumption.
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Overview
- What you need to know
- This Report looks at the following areas
- Definition
- Market context
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Executive Summary
- Top takeaways
- Consumer trends
- Cannabis usage supports wellness routines
- Figure 1: Frequency of cannabis use, 2022-23
- Invest in employees to retain customers
- Figure 2: Importance of friendly service at retail, 2023
- Promote value beyond price
- Figure 3: Desired information from dispensaries, 2023
- Secondary drivers expand reach
- Figure 4: Product trial motivators, 2023
- Competitive strategies
- Market predictions
- Figure 5: Cannabis retailing outlook, 2023-28
- Opportunities
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State of the Cannabis Market
- Legal differences shape markets
- Cannabis: State of Legality
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Market Value Indicators
- Cannabis market continues to grow…
- …but profit margins are being squeezed
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Market Drivers
- Hemp intoxicants are thorn in the side of the licensed industry
- Homegrower market can bolster the industry
- Cannabis reform could lead to more uses and benefits
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Key Players
- Dispensaries respond to market volatility
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Competitive Strategies and Market Opportunities
- Rethink retailer format and design
- Figure 6: Dispensary examples focused on the retail experience
- Prepare for the cannabis holiday calendar
- Invest in DEI
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- Figure 7: Pleasure Peaks – Instagram post, Lovers Bath Salts, 2023
- Destination: Cannabis
- Figure 8: Attitudes toward visiting dispensaries, 2023
- Rethink retailer format and design
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The Cannabis Consumer – Fast Facts
- Cannabis consumption trends are changing
- Customer service and safety measures determine where people shop
- Dispensary discovery is organic, but online sources will gain traction
- Promote value beyond price
- The dispensary is a gateway to building trust, loyalty and community
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Cannabis Usage
- Cannabis use poised to grow
- Figure 9: Consumption of alcohol vs consumption of cannabis – Trended use, 2020-23
- More adults may turn to cannabis in wake of economic stress
- Figure 10: Marijuana/cannabis use, by financial situation, 2023
- Increased daily usage points to its essential role
- Figure 11: Frequency of cannabis use, 2022-23
- Drive trial through lesser-known formats
- Figure 12: Usage and interest in cannabis formats, 2023
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- Figure 13: Hempvana pain relief cream, 2023
- Cannabis use poised to grow
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Factors Driving Dispensary Choice
- Invest in employees to grow loyalty
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- Figure 14: Dispensary choice factors, 2023
- Build trust through safety measures
- Figure 15: Qualities sought by consumers from dispensaries, 2023
- Expand reach with store design
- Figure 16: TURF analysis – Dispensary choice factors, 2023
- Adjust messaging to reach different age groups
- Figure 17: Qualities sought by consumers from dispensaries – Select items, by age, 2023
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Dispensary Discovery
- Word of mouth is important, but online sources will gain ground
- Figure 18: Dispensary discovery, 2023
- Dispensaries need to meet adults where they are
- Figure 19: Dispensary discovery – Select responses, by age, 2023
- Word of mouth is important, but online sources will gain ground
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Desired Information from Dispensaries
- Look beyond price to promote value
- Figure 20: Sunnyside loyalty program, 2023
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- Figure 21: Desired information from dispensaries, 2023
- Don’t overlook Gen X
- Figure 22: Desired information from dispensaries – Select responses, by generation, 2023
- Look beyond price to promote value
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Product Trial Motivators
- Price is important, but secondary drivers expand reach
- Figure 23: Olly and 1906 relaxation products, 2023
- Figure 24: Product trial motivators, 2023
- Health benefits instrumental in converting older non-users
- Figure 25: Product trial motivators – Select items, by age, 2023
- Encourage trial with packaging
- Figure 26: TURF analysis – Trial motivators, 2023
- Price is important, but secondary drivers expand reach
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Attitudes and Opinions toward Cannabis
- Brand loyalty up for grabs
- Figure 27: Attitudes toward cannabis brands, 2023
- Loyalty begins with the dispensary
- Figure 28: Lightshade CSR program, 2023
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- Figure 29: Opinions about dispensaries, 2023
- Empower young adults through flexibility and identity
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- Figure 30: Select opinions about dispensaries, by age, 2023
- Brand loyalty up for grabs
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Appendix – Data Sources and Abbreviations
- Data sources
- Market data
- Consumer survey data
- Abbreviations and terms
- Abbreviations
- Terms
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Appendix – The Consumer
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- Figure 31: TURF analysis – Retailer drivers, 2023
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- Figure 32: TURF analysis – Desired information from dispensaries, 2023
- Methodology
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Stay ahead of the curve by understanding key marketing and positioning strategies for cannabis dispensaries, and gain insights into the future trajectory of cannabis retail. Perfect for stakeholders seeking to capitalise on emerging opportunities in this fast-paced industry.
Below, we define what’s covered, detail the key topics analysed, and offer some handpicked insights from the report itself.
Definition of What’s Covered
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.
Key Topics Analysed
- State of the cannabis market and how it’s faring in the current economic climate.
- The evolving role of the dispensary.
- Cannabis consumption trends.
- Drivers of dispensary choice and loyalty.
- Product trial motivators.
US Cannabis Market Overview
The US cannabis market, shaped largely by evolving state-level legalities, experiences growth surges with every state’s embrace of legalisation. Yet, hurdles like THC’s federal classification hinder its full potential, and implications of nationwide legalisation loom large.
2022 saw retail sales dip by 20% due to price compression, challenging profitability. However, despite these challenges and volatile prices in mature markets, projections show promise, with the market’s resilience hinting at a correction phase, buoyed by consumer demand and wellness trends.
Cannabis Retail Marketing: Consumer Motivators and Opportunities for Dispensaries
Within this report, consumer trends are covered extensively, drawing from Mintel’s independent consumer research. Here we’ll discuss trends and their associated marketing opportunities.
Redefining cannabis marketing: beyond pricing to benefits and packaging
In the US cannabis market, while promotional pricing remains influential, there’s a growing emphasis on product innovation and benefits. Brands, taking cues from the vitamin industry, are adopting benefit-forward naming, exemplified by brands like 1906. Additionally, as the demographic of users broadens, older adults (especially those 65+) lean towards cannabis for health benefits. Effective marketing to this group requires health-focused messaging. Furthermore, the 22-34 age bracket shows a notable preference for compelling packaging, suggesting a future where packaging mirrors trends in sectors like food and beauty.
Seizing the canna-tourism opportunity
The rise of canna-tourism offers a lucrative avenue for dispensaries. With 60% of our consumer survey respondents expressing interest in exploring new dispensaries during their travels, there’s an evident desire to combine vacationing with cannabis experiences. Destination-worthy dispensaries, complemented by amenities such as lounges offering food and entertainment, are emerging as key attractions.
As the cannabis industry collaborates with the travel and hospitality sectors, establishing legal consumption areas and promoting authorised businesses will enhance the canna-tourism experience, converting travellers into loyal cannabis consumers.
This report reveals the latest consumer preferences and demands within cannabis retail, and offers marketing and positioning strategies for dispensaries. Get ahead in the cannabis industry and buy your copy today. Alternatively, browse our extensive library of cannabis market research.
Additional Features Included in Your Report
Different Digital Formats: PDF for conveniently sharing with your team, PowerPoint for quickly including in your presentation, as well as an Infographic and an Excel Databook.
Mintel’s Clients Portal: Our portal offers instant access to actionable analysis and trends pieces relevant to your industry that are published almost daily. You can also browse for more market research reports.
Expert Analysis
This report, written by Fiona O’Donnell, a leading lifestyles analyst, delivers in-depth commentary and analysis to highlight current marketing trends and opportunities in the US cannabis market, adding expert context to the numbers.
The cannabis industry is on a positive growth trajectory thanks to expanding legalization and increased consumption. Still, the industry faces hurdles including heavy regulation, price compression, oversupply and intense competition. Dispensaries need to adapt to this rapidly evolving industry by rethinking store format, highlighting wellness drivers and savvy promotional activity.
Fiona O’Donnell
Senior Director – US Reports
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