Data Analysis: The Consumer Demographics Driving Sales

As legal cannabis becomes increasingly accessible and popular in North America, more brands and retailers are trying to gain precise insights into who their customers actually are. In 2021, retail data indicated millennial male consumers were still driving the bulk of sales in key markets. However, the emergence of new brands, markets, and other global factors warrants an updated inquiry into consumer trends across the United States and Canada. Headset’s findings from the past two years identified two emerging demographics primed to reshape the consumer experience within the cannabis space: women and Generation Z.

Cannabis consumption by gender

Since 2020, there have been noticeable shifts among male and female consumers in the cannabis marketplace. Purchasing data from the first quarter of 2021 indicated male consumers were responsible for an overwhelming majority of sales across key markets such as California, Colorado, Nevada, and Washington. However, sales among female consumers rose by more than 55 percent from the start of 2020 to the end of 2021. By comparison, sales among male customers rose by less than 50 percent during the same period. Further analysis suggests female patrons of every age group except Gen Z purchase cannabis products in larger basket sizes than their male counterparts.

Changing consumer habits also have provided more insight into the preferences of female customers. Most notably, data shows female patrons prefer edible, sublingual, tincture, and topical products over beverages and capsules. Meanwhile, male consumers have a proclivity for concentrates, flower products, and vapor pens.

It’s important to note these product preferences tend to change across different generations. For instance, female Gen Z consumers appear to be outliers, preferring concentrates to edibles. Regardless of gender demographics, it’s becoming increasingly essential to monitor Gen Z’s preferences as their market share continues to grow.

Brands and retailers can leverage these recent findings to tailor their product offerings, in-store promotions, and inventory to drive growth—especially if they seek relatively untapped consumer segments. The recent upswing in demand among young female cannabis customers is a leading indicator of how cannabis experiences will evolve in the coming years.

Cannabis consumption by age group

Gen Z will compose a larger portion of cannabis consumer sales as they turn twenty-one. From the first quarter of 2020 to the final quarter of 2021, Gen Z’s market share increased by more than 80 percent. In fact, the group is the only age bracket with new customers entering the available market daily. While millennials remain the most prominent customer age group, contributing to roughly half of all sales, the foothold of each of the three older age groups has receded fairly evenly.

Not only is Gen Z growing at a faster pace than older generations, but they also have noticeably distinct preferences. Unlike Gen X, millennials, and baby boomers, Gen Z prefers concentrates and vapor pens over edibles and flower. Meanwhile, the products that appear to unite all generations are pre-rolls, the convenience and familiarity of which have a universal appeal to consumers of all ages and genders.

What does this mean for brands?

Granted, the branding of each of these form factors also plays a significant role in how different demographic groups engage with each product. In California, the Headset team analyzed the consumer breakdown of two prominent edibles brands, Froot and PLUS. Less than 40 percent of California edibles sales were driven by millennials, but 40.4 percent of Froot edibles sales were from this age group, resulting in a slight over-index to millennials for the company. With this information, Froot, a bright and playful value-priced brand, can market itself to millennials and new Gen Z consumers. By contrast, 30.2 percent of California edibles sales were driven by Gen X, but 34.7 percent of PLUS edibles sales came from this age group. The company’s understated branding and experience-based product line clearly resonated with older consumers and appealed to their specific preferences.

Understanding nuances in consumer behavior is vital to building successful brands and retail operations in today’s industry. As trends continue to change rapidly, it is more important than ever to monitor the needs and desires of consumers of all backgrounds.

Cy Scott is co-founder and chief executive officer at Headset Inc., which turns retail data into real-time market insights. Previously, he co-founded cannabis information network Leafly, obtained Kelly Blue Book’s first patent, and assisted TEN: The Enthusiast network in transitioning publications including MotorTrend and Automobile from print to digital.