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The Recreational Cannabis Consumer - US - September 2018

"As of July 2018, nine US states and the District of Columbia have legalized cannabis for recreational (adult) use, and moves toward expanded legalization are underway. This has and will continue to impact some food and drink categories. Already, 34% of cannabis users have decreased alcohol consumption since legalization, likely contributing to the recent alcohol sales slowdown. Beyond the challenge to recreational categories, cannabis appeals for functional benefits, pointing to a need for other segments to be on alert. Leading reasons for cannabis use are relaxation and stress relief, and leading reasons identified for potential use include pain relief and medical conditions."
- Beth Bloom, Associate Director - Food & Drink

This report looks at the following areas:

  • Nine US states and Washington DC have legalized recreational cannabis
  • US sales of recreational cannabis estimated to reach $6.7 billion in 2018
  • Men under the age of 55 are the most likely cannabis users
  • Relaxation and relief drive cannabis usage
  • From “new” market to specialization in record time
  • A third of cannabis consumers have reduced alcohol consumption
  • Non-cannabis brands are getting in on the action
  • A shift in popular cannabis formats can be seen
  • A robust cannabis culture offers new paths for engagement
  • Market nascence means the risk of uncertainty

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • Nine US states and Washington DC have legalized recreational cannabis
          • US sales of recreational cannabis estimated to reach $6.7 billion in 2018
            • Men under the age of 55 are the most likely cannabis users
              • Relaxation and relief drive cannabis usage
                • From “new” market to specialization in record time
                  • A third of cannabis consumers have reduced alcohol consumption
                    • Non-cannabis brands are getting in on the action
                      • A shift in popular cannabis formats can be seen
                        • A robust cannabis culture offers new paths for engagement
                          • Market nascence means the risk of uncertainty
                          • The Market – What You Need to Know

                            • Nine US states and Washington DC have legalized recreational cannabis
                              • US sales of recreational cannabis estimated to reach $6.7 billion in 2018
                                • Consumers see legalization as good for economy, torn over public good
                                  • A third of cannabis consumers have reduced alcohol consumption
                                    • Stress and chronic pain present a need for cannabis use
                                    • Market Factors

                                      • Nine US states and Washington DC have legalized recreational cannabis
                                        • Figure 1: Status of cannabis regulation in the US, June 2018
                                      • Legalization viewed as good for the economy
                                        • Figure 2: Cannabis statements - opinion, June 2018
                                      • Sales reach $6.7 billion in 2018
                                        • Figure 3: US Legal Cannabis Spending, 2017-22
                                      • Stress and chronic pain present a need for cannabis use
                                        • Figure 4: Lifestyle statements - wellbeing, June 2018
                                    • Market Breakdown

                                      • California is the largest US legal market, presents strongest potential consumer base
                                        • Figure 5: Top performing adult-use markets, 2018 (est)
                                      • Popular cannabis formats shifting
                                        • Figure 6: Share of Products Sold at Cannabis Retail
                                      • Candy leads edibles sales in share
                                        • Figure 7: Edibles share in adult-use, 2017
                                    • Market Perspective

                                      • A third of cannabis consumers have reduced alcohol consumption
                                        • Figure 8: Cannabis statements - alcohol, June 2018
                                      • Cannabis performs well for fun and function, struggles with social acceptability
                                        • Figure 9: Motivations for drinking alcohol, August 2017
                                      • Alcohol sales stagnate
                                        • Figure 10: Total US volume sales of beer, 2012-2017 (est)
                                        • Figure 11: Total US volume sales of wine, 2012-2017 (fore)
                                        • Figure 12: Total US volume sales of spirits, 2012-2017 (est)
                                      • Cannabis consumers are more likely than average to drink alcohol
                                        • Figure 13: Substance usage, by cannabis usage, June 2018
                                      • Frequent cannabis users are most likely also to drink beer
                                        • Figure 14: Substance usage, by marijuana/cannabis usage frequency, June 2018
                                      • On-premise cannabis consumption limitations stunt permissibility…
                                        • …but a preference for staying in among younger consumers could benefit cannabis
                                          • Expanded legalization should ease access
                                            • CBD an opportunity for traditional CPG, doesn’t cut into cannabis use
                                              • Figure 15: Cannabis statements - CBD, June 2018
                                            • Market nascence means the risk of uncertainty
                                            • Key Players – What You Need to Know

                                              • Recreational market is stimulated by new product development
                                                • Non-cannabis brands are getting in on the action
                                                  • Cannabis culture ripe for engagement
                                                    • Craft will come to market sooner than later
                                                    • A Look at Brands

                                                      • Branding will gain importance as legalization expands
                                                        • Edibles (including drinkables) expand in multiple directions
                                                          • Kikoko tea gets specific about occasions
                                                            • Cheeba Chews highlight cannabis classification
                                                              • Kiva Confections offers low-THC options that allow consumers to maximize control
                                                                • Lagunitas brings a familiar brand to the cannabis space
                                                                  • Ceria Beverages uses big beer expertise to develop new beverage line
                                                                    • Constellation invests early in cannabis
                                                                      • Stillwater Brands puts the control in consumers’ hands
                                                                        • The benefits of association
                                                                          • Figure 16: Self perceptions, by cannabis use, June 2018
                                                                        • Splimm speaks to parents
                                                                          • Retailer Med Men emphasizes education, inclusion
                                                                            • Grass roots resources offer trusted guidance
                                                                              • Figure 17: Discovery, June 2018
                                                                            • Social networking goes beyond traditional brands
                                                                              • Figure 18: Discovery, by age, June 2018
                                                                            • Users aren’t picky about retail source
                                                                              • Figure 19: Cannabis statements - dispensaries, June 2018
                                                                            • Mainstream brands are welcome by a third of cannabis users
                                                                              • Figure 20: Cannabis statements – mainstreaming, June 2018
                                                                            • Mainstream brands already aim at a contact high
                                                                              • Figure 21: Jack in the Box – $3 Late Night Munchie Mash-Ups – “Monsters,” August 2018
                                                                          • Edible Formats of Interest

                                                                            • Sweets lead as edible format of interest
                                                                              • Figure 22: Edible/drinkable cannabis formats of interest, June 2018
                                                                            • Young consumers are interested in diverse, edible formats
                                                                              • Figure 23: Edible/drinkable cannabis formats of interest, by age, June 2018
                                                                            • Cannabis-infused alcohol interests a quarter of alcohol reducers
                                                                              • Figure 24: Edible/drinkable cannabis formats of interest, by alcohol behavior, June 2018
                                                                          • What’s Next?

                                                                              • From new market to specialization in record time
                                                                                • Keeping pairing in mind
                                                                                  • Health-focused food brands are a natural fit to enter the cannabis space
                                                                                  • The Consumer – What You Need to Know

                                                                                    • Cannabis users resemble profile of alcohol users
                                                                                      • More than half of cannabis users are drinkers too
                                                                                        • Relaxation and relief drive cannabis usage
                                                                                          • Alcohol outperforms cannabis for social acceptability
                                                                                            • Non-users say they just have no need for cannabis
                                                                                              • Interest in edibles presents an opportunity for food/drink manufacturers
                                                                                              • Cannabis Usage

                                                                                                    • Figure 25: Cannabis usage, key demos*, June 2018
                                                                                                  • Men lead cannabis use
                                                                                                    • Figure 26: Cannabis segmentation, by gender*, June 2018
                                                                                                    • Figure 27: Substance usage, by gender**, June 2018
                                                                                                  • 35-54-year-olds most likely to consume, but do so in moderation
                                                                                                    • Figure 28: Cannabis segmentation, by age*, June 2018
                                                                                                    • Figure 29: Substance usage, by age**, June 2018
                                                                                                  • Low income is not a strong barrier to cannabis consumption
                                                                                                    • Figure 30: Cannabis segmentation, by HH income*, June 2018
                                                                                                    • Figure 31: Substance usage, by HH income**, June 2018
                                                                                                  • Suburban dwellers are less engaged
                                                                                                    • Figure 32: Cannabis segmentation, by location*, June 2018
                                                                                                    • Figure 33: Substance usage, by location**, June 2018
                                                                                                  • Cannabis users are generally employed
                                                                                                    • Figure 34: cannabis segmentation, by employment status*, June 2018
                                                                                                  • Parents are just as likely as non-parents to use cannabis
                                                                                                    • Figure 35: Cannabis segmentation, by parental status*, June 2018
                                                                                                    • Figure 36: Substance usage, by parental status**, June 2018
                                                                                                  • Hispanic non-users are open to use
                                                                                                    • Figure 37: Cannabis segmentation, by Hispanic origin*, June 2018
                                                                                                    • Figure 38: Substance usage, by Hispanic origin**, June 2018
                                                                                                  • A quarter of non-users remain on the fence
                                                                                                    • Figure 39: Interest in using cannabis, June 2018
                                                                                                • Substance Usage Frequency

                                                                                                    • 40% of cannabis users do so daily
                                                                                                      • Figure 40: Usage frequency – marijuana/cannabis, June 2018
                                                                                                    • Daily cannabis use higher than alcohol
                                                                                                      • Figure 41: Usage frequency - Daily, June 2018
                                                                                                    • Functional drivers lead to daily use; alcohol can aim at recreation
                                                                                                      • Figure 42: Usage frequency - Daily, by reasons for use, June 2018
                                                                                                    • Younger adults show a higher proclivity for daily use
                                                                                                      • Figure 43: Usage frequency - Daily, by age, June 2018
                                                                                                  • Cannabis vs Other Substance Occasions

                                                                                                      • Cannabis is most commonly linked with home consumption
                                                                                                        • Figure 44: Correspondence Analysis – Symmetrical map – Occasions, June 2018
                                                                                                        • Figure 45: Occasions, June 2018
                                                                                                      • Women are interested in quiet, relaxing cannabis occasions
                                                                                                        • Figure 46: Occasions – marijuana/cannabis, by gender, June 2018
                                                                                                      • Young consumers open to a range of occasions
                                                                                                        • Figure 47: Occasions – marijuana/cannabis, by age, June 2018
                                                                                                    • Attribute Association

                                                                                                        • Alcohol is more likely to be viewed as socially acceptable
                                                                                                          • Figure 48: Correspondence Analysis – Symmetrical map – Attributes associated with alcohol/marijuana/cannabis, June 2018
                                                                                                          • Figure 49: Attributes associated with alcohol/marijuana/cannabis, June 2018
                                                                                                        • Even frequent users view cannabis as a treat
                                                                                                          • Figure 50: Attributes associated with Marijuana/cannabis, by marijuana/cannabis usage frequency, June 2018
                                                                                                        • Alcohol reducers think cannabis is natural, healthy, effective
                                                                                                          • Figure 51: Attributes associated with alcohol/marijuana/cannabis – respondents to agree they have reduced alcohol consumption since cannabis legalization, by perception of marijuana/cannabis and any alcohol, June 2018
                                                                                                        • Further information about health impacts of cannabis is needed
                                                                                                          • Figure 52: Cannabis statements - knowledge, June 2018
                                                                                                      • Cannabis Formats Used

                                                                                                          • The majority of consumers use inhaled formats
                                                                                                            • Figure 53: Marijuana/cannabis formats, June 2018
                                                                                                          • Majority of users turn to 2+ formats
                                                                                                            • Figure 54: Marijuana/cannabis formats – repertoire analysis, June 2018
                                                                                                            • Figure 55: Marijuana/cannabis formats, by reasons for use, June 2018
                                                                                                          • Edibles as point of entry
                                                                                                            • Figure 56: Marijuana/cannabis formats, by marijuana/cannabis usage frequency, June 2018
                                                                                                          • Women are strong targets for edibles
                                                                                                            • Figure 57: Marijuana/cannabis formats, by gender, June 2018
                                                                                                          • Half of users aged 22-34 do so using vape pens
                                                                                                            • Figure 58: Marijuana/cannabis formats, by age, June 2018
                                                                                                        • Perception of Cannabis Formats

                                                                                                            • Inhalable formats lead for basic needs; room for improvement exists
                                                                                                              • Edibles perform well for being good tasting and discreet
                                                                                                                • Drinkable formats experience low perception of efficacy, availability, and consistency
                                                                                                                  • Figure 59: Correspondence Analysis – Symmetrical map – Attributes associated with marijuana/cannabis types, June 2018
                                                                                                                  • Figure 60: Attributes associated with marijuana/cannabis types, June 2018
                                                                                                              • Reasons for Cannabis Use

                                                                                                                  • Relaxation and relief drive cannabis use
                                                                                                                    • Figure 61: Reasons for use, June 2018
                                                                                                                  • Daily users may be hard to convert
                                                                                                                    • Figure 62: Reasons for use, by marijuana/cannabis usage frequency, June 2018
                                                                                                                  • Female users look for relief
                                                                                                                    • Figure 63: Reasons for use, by gender, June 2018
                                                                                                                    • Figure 64: Lifestyle statements - wellbeing, by gender, June 2018
                                                                                                                  • Younger users want to slow it all down
                                                                                                                    • Figure 65: Reasons for use, by age, June 2018
                                                                                                                    • Figure 66: Lifestyle statements - wellbeing, by age, June 2018
                                                                                                                • Important Factors in Cannabis Choice

                                                                                                                    • Price and THC amount lead choice factors
                                                                                                                      • Figure 67: Important factors, June 2018
                                                                                                                    • Users are open to various strains
                                                                                                                      • Figure 68: Cannabis statements - strain, June 2018
                                                                                                                    • Three quarters of daily users are interested in THC amount
                                                                                                                      • Figure 69: Important factors, by marijuana/cannabis usage frequency, June 2018
                                                                                                                    • Women want to know what they’re getting into
                                                                                                                      • Figure 70: Important factors, by gender, June 2018
                                                                                                                    • Younger shoppers are interested in flavor/aroma
                                                                                                                      • Figure 71: Important factors, by age, June 2018
                                                                                                                  • Openness About Cannabis Usage

                                                                                                                    • The majority of users are open about their use
                                                                                                                      • Figure 72: Cannabis statements - openness, June 2018
                                                                                                                    • Infrequent users less likely to share
                                                                                                                      • Figure 73: Cannabis statements - openness, by marijuana/cannabis usage frequency, June 2018
                                                                                                                    • Young users are most likely to be open about usage
                                                                                                                      • Figure 74: Cannabis statements - openness, by age, June 2018
                                                                                                                  • Barriers to Cannabis Use

                                                                                                                      • The majority of non-users say they just have no need
                                                                                                                        • Figure 75: Barriers, June 2018
                                                                                                                      • Half of non-users aged 55+ say cannabis doesn’t fit their lifestyle
                                                                                                                        • Figure 76: Barriers, by age, June 2018
                                                                                                                    • Reasons for Potential Use of Cannabis

                                                                                                                        • Relief and health enhancement appear as the strongest potential draws
                                                                                                                          • Figure 77: Reasons for potential use, June 2018
                                                                                                                        • Discretion is a hallmark of interested non-users
                                                                                                                          • Figure 78: Occasions for potential use, June 2018
                                                                                                                        • Interest in edibles presents an opportunity for food/drink manufacturers
                                                                                                                          • Figure 79: Formats for potential use, June 2018
                                                                                                                      • Appendix – Data Sources and Abbreviations

                                                                                                                        • Data sources
                                                                                                                          • Consumer survey data
                                                                                                                            • Correspondence analysis methodology
                                                                                                                              • Abbreviations and terms
                                                                                                                                • Abbreviations

                                                                                                                                The Recreational Cannabis Consumer - US - September 2018

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