Canada could see as many as 3 million new consumers enter the cannabis market due to legalization and availability of edibles, extracts and topicals, according to a survey conducted by EY Canada and Lift & Co.
That figure represents the conversion of approximately 12% of current non-consumers.
“New product offerings will open the doors for experimentation among current and non-consumers giving cannabis companies the opportunity to capture a larger market share,” says Monica Chadha, EY Canada Cannabis Leader. “But companies should keep in mind that these consumer segments will have very different attitudes towards cannabis and product formats, ultimately driving the need for differentiated customer experiences.”
Current cannabis consumers make up 17% of the Canadian adult population, according to Statistics Canada.
The survey from EY and Lift & Co. finds “quality, intended effects and potency are some of the most important criteria for consumers evaluating purchases, with less focus on the brand,” a release notes.
Data indicates that 70% of current consumers who purchase through brick and mortar retail channels do not know what product or brand they are going to purchase prior to entering the store.
“Understanding the nuances of your customers’ values and interests, and having the right tools to determine these, are key,” says Matei Olaru, CEO for Lift & Co. “The right data will allow companies to continually innovate, create value for consumers and build customer loyalty.”
“Contrary to current consumers, the non-consumer segment is less concerned with potency and price and places more emphasis on clinical research and recommendations from health care practitioners to make purchasing decisions,” a release notes.
One-third (33%) of non-consumers surveyed report not knowing enough about cannabis to consume it. Going forward, they indicate an interest in experimenting with low dosage baked goods, confectionery and food additive products.
“Current non-consumers need more information before they feel comfortable trying cannabis products,” said Chadha. “Deciphering through online information for what’s credible can be a challenge. Companies will need to determine the best way of building awareness and educating targeted consumer segments as one way to help inform the purchasing decision and build brand loyalty.”
Olaru added: “Budtenders play a pivotal role in educating consumers at the point of purchase. Their recommendations are heavily influenced by word of mouth and online product reviews so engaging the budtender community will be a critical differentiator for cannabis brands.”
Read the full EY Canada and Lift & Co. report here: As 2.0 opportunities emerge, can you still compete with 1.0 strategies?.