This report provides comprehensive and current information and analysis of the recreational cannabis market including recreational cannabis market size, anticipated market forecast, relevant market segmentation, and industry trends for the recreational cannabis market in the US.
Current market landscape
Cannabis remains relatively stable in terms of usage rates, reasons for use and even format. In fact, usage has only fluctuated 4 percentage points from 2019-22, despite hugely impactful external factors of pandemic lockdowns and elevated stress to the high inflation environment.
Even still, because cannabis is siloed state-by-state, each mini market will experience very different impacts of inflation. While prices like food and fuel are rising nationwide, this is not the case for cannabis across the board. Currently, some states are seeing cannabis prices rise while other are seeing them fall, due to a combination of supply chain headaches and how well (or poorly) growing seasons have gone.
Market share and key industry trends
- Cannabis use is holding steady with 32% of adults in legal use states reporting use in the last three months, the same share who reported use in 2020, and only up slightly since prepandemic numbers in 2019 (28%).
- Fewer consumers are using topicals, vaporizers, drinkables, drops and tinctures, indicating potential dissatisfaction with products and a corresponding emphasis on exploration.
- 64% of consumers in 2022 use cannabis for stress relief, down from 68% in 2020.
Expected recreational cannabis market trends
Even if faced with financial challenges, half of cannabis consumers would not change their spending on cannabis, and another 13% might even spend more. Thus, cannabis brands may actually have more opportunities than challenges during inflation, at least compared to products in cannabis’s competitive set, such as alcohol. Challenges, then, come from within the market, ie, competition with other brands. Highlighting value, including both price and quality components, is an obvious win that may yield loyalties that outlast inflation.
Read on to discover more about the recreational cannabis consumer market, read our Cannabis Accessories Market Report – US – 2022, or take a look at our other Cannabis research reports.
Quickly understand future recreational cannabis markets
- State of the cannabis market.
- How inflation is impacting the cannabis market and the opportunities and challenges it presents.
- Trended data regarding cannabis use, formats and use-cases from 2019-22.
- Interest in and experiences with cannabis.
- The role of dispensaries and brands in the recreational/legal adult use market.
Covered in this cannabis market research report
Brands include: Scott’s Miracle Grow, Constellation Brands, Molson Coors Brewing, Anheuser-Busch InBev, Canopy Growth, HEXO, Tilray, Curaleaf, Green Thumb Industries, Trulieve Cannabis, Verano Holdings, Canopy Growth, Cronos Group, Cresco Labs, Columbia Care, Sundial Growers, Beyond / Hello, The Green Solution, MedMen, Decibel, The Botanist, RISE (operated by Green Thumb Industries), Green Goods, Native Roots, Synchronicity Holistic, Serra, Maitri Meds, Compassionate Clinics of America, Leafly: Cannabis 101, Illinois Cannabis Training Center, highVIBE Cannabis Flow, Dispensary33, Mary’s Medicinals Transdermal Patch.
Expert analysis from a specialist in the recreational cannabis market
This report, written by Michele Scott, a leading analyst in the Cannabis sector, delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.
The cannabis market has always been distinctive and complex. Usage remained steady in 2022 despite high inflation that is expected to continue in 2023, which further demonstrates its uniqueness, especially compared to other discretionary products. Users are unwilling to forgo cannabis, even as prices rise, presenting an opportunity for brands to highlight value. Competition will be fierce, leaving less room for error than ever before.
Michele Scott
Associate Director
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Overview
- What you need to know
- This Report looks at the following areas
- Scope
- Market context
- What you need to know
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Executive Summary
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- Top takeaways
- Market overview
- Figure 1: Cannabis outlook, 2023-28
- Opportunities and challenges
- Identify new use cases to attract potential users
- Cannabis will prove resilient, but brands will be challenged as competition intensifies
- Figure 2: Potential changes in spending due to financial challenges, 2022
- Loyalty matters for retailers
- Figure 3: Dispensary loyalty and frequency of use, 2022
- “Recreational” users need more than just fun – they also want function
- Figure 4: Cannabis attitudes, 2022
- Consider cannabis as an alc-alternative
- Key consumer insights
- Cannabis is evolving; usage rates are relatively steady
- Figure 5: Trended use of alcohol and cannabis, 2019-22
- Top reasons for use are consistent, declining formats indicate opportunities for improvement
- Figure 6: Top reasons for cannabis use and formats in decline, 2019-22
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State of the Cannabis Market
- Legal differences shape markets
- Cannabis: State of Legality
- Most popular formats are classics
- Figure 7: Cannabis format use, 2022
- Legal differences shape markets
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Market Value Indicators
- Cannabis market continues to grow
- Non-cannabis brands play in rec space
- Cannabis market continues to grow
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Key Players
- Recreational brands dominate market
- Top 10 brands, by market cap:
- Dispensaries
- Top dispensaries:
- Comparison with tobacco sets perspective
- Recreational brands dominate market
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Market Factors
- Inflation hits differently
- Figure 8: Consumer concerns, April – November 2022
- Climate changes the market
- Cultural health narratives make space for cannabis
- Spirituality opens doors for THC
- Inflation hits differently
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Competitive Strategies and Market Opportunities
- Create dispensaries with added value
- Figure 9: Dispensaries with added value
- Educational programming can come from multiple directions
- Figure 10: Educational programming resources
- Create a community
- Integrate other platforms
- Rethink “topical” cannabis
- Figure 11: Alternative topicals options
- Create dispensaries with added value
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The Recreational Cannabis Consumer – Fast Facts
- The market is maturing, and so are consumers
- Frequent users are also cost conscious
- Cannabis is (somewhat) recession proof
- Dispensaries are key
- The market is maturing, and so are consumers
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Trended Cannabis Use
- Cannabis use remains consistent
- Figure 12: Trended use of consumables, 2019-22
- Lapsed formats present opportunities, challenges
- Figure 13: Format use, Trended, 2019-22
- New uses emerge as stressors normalize
- Figure 14: Reasons for use, trended, 2019-22
- Cannabis use remains consistent
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Frequency of Cannabis Use
- Daily use continues to present opportunity
- Figure 15: Frequency of cannabis use, 2022
- Consider competitive sets for frequent users
- Figure 16: Cannabis use frequency, by HHI, 2022
- Daily use continues to present opportunity
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Interest and Experience
- Re-engage lapsed users
- Figure 17: Cannabis interest and experience, 2022
- Convert interest to use with multi-pronged approach
- Figure 18: Cannabis interest and experience, by age, 2022
- Re-engage lapsed users
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Potential Spending Changes
- Cannabis enjoys some cushion against financial challenges
- Figure 19: Potential changes in spending due to financial challenges, by category, 2022
- Trade over to cannabis amidst money trouble
- Figure 20: Potential to spend less due to financial challenges – Select categories, by age, 2022
- Don’t discount lower-income consumers
- Figure 21: Potential changes in spending on cannabis due to financial challenges, by HHI, 2022
- Cannabis enjoys some cushion against financial challenges
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Approach to Cutting Cannabis Costs
- Competition heats up among brands
- Figure 22: Approach to cutting cannabis costs, 2022
- Mid-income consumers are most mobile
- Figure 23: Approach to cutting cannabis costs, by HHI, 2022
- Dispensaries need to bring value
- Figure 24: Approach to cutting cannabis costs, by age, 2022
- Competition heats up among brands
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Dispensary Loyalty
- Loyalty is up for grabs
- Figure 25: Dispensary loyalty, 2022
- Value will impact dispensary loyalty in different ways
- Figure 26: Dispensary loyalty, by HHI, 2022
- Build loyalty among those under 35
- Figure 27: Dispensary loyalty, by age, 2022
- Loyalty is up for grabs
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Cannabis Attitudes
- Lines between use cases are blurring
- Figure 28: Cannabis attitudes, 2022
- Personal wellness is the key to brand wellness
- Figure 29: Cannabis attitudes, by HHI, 2022
- Education adds value for younger cohort
- Figure 30: Cannabis attitudes, by age, 2022
- Lines between use cases are blurring
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Appendix – Data Sources and Abbreviations
- Data sources
- Consumer survey data
- Abbreviations and terms
- Abbreviations
- Data sources
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