Building Bigger Cannabis Brands with Better Data

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It’s hard to imagine what newbie customers must be thinking as they peruse retail cannabis menus these days. First, they must decode the categories—“flower,” “vape,” “extract”—and then wade through hundreds of products in each section, all described in esoteric canna-ese. The process is enough to induce severe mental fatigue. Luckily, there’s a product for that…somewhere on that damn menu.

For their part, cannabis brands are becoming more savvy about reaching out directly to customers with targeted marketing campaigns and loyalty programs heavily reliant on data collected, crunched, and analyzed with every new purchase.


While most other retail markets have decades of demographic data from which to draw, the cannabis industry has a much more limited view of its customer base, both old and new. A cottage industry of analyst firms has sprung up to satiate the demand for more data and insight into this rapidly evolving industry, and until brands better understand what products and effects their customers crave, the hunt for bigger, better datasets will continue. Along the way, companies will develop more accurate and detailed consumer profiles, and if things go according to plan, brand allegiances will start to translate into lifelong customers.

Digging up details

As brands begin interacting more directly with a growing number of consumers across the United States, their goal is to establish strong, long-term, mutually beneficial relationships. One of the most challenging aspects of this pursuit is anticipating what products will capture the interest of fickle, often underinformed shoppers. It’s no wonder brands have begun relying on focus groups, surveys, research studies, and data analytics to shed light on cannabis trends and consumer preferences. Third-party cannabis and CBD consumer data can help companies develop more effective media campaigns and ad targeting by revealing audiences’ current interests and predicting how those interests may change over time.

Adriana Hemans is the director of demand and special projects at SoapBoxSample, where she consults with cannabis brands (among others) and designs surveys to get inside the heads of cannabis consumers. Hemans said the company surveys 1,000 cannabis consumers across the U.S. every two weeks. She and her team survey nationwide rather than focusing on mature markets, because they want to understand how trends might change once cannabis is legal everywhere.

“Brands want to know what people are buying, number one,” she said. “We tell them it’s important to look at point-of-sale data, and it’s also important to know sales are increasing in edibles, for example. But if you don’t understand the motivations that are driving those purchases, and if you don’t understand what those usage occasions look like or who your consumers are psychographically or demographically, you only have a very small piece of the picture. So, we spend a lot of time educating people about the importance of exploring all those things.”

Digital marketing company Fyllo also spends a good deal of time educating its clients, according to Chief Executive Officer Chad Bronstein, who brought his background working with technology companies to bear on the cannabis industry. Like SoapBoxSample, Fyllo collects and analyzes data from a variety of sources instead of relying on point-of-sale (POS) information alone. “Brands want to drive sales, which is the goal with their current customer base, but they also want to know how they can extend and grow the brand,” he said. Broad-based data like Fyllo’s “allows them to really scale their audiences and find something in a new consumer that they can build on.”

Consumers are not merely neat little packages of discrete datasets.

On the West Coast, few companies have a better view of the consumer landscape and mindset than Blackbird, which started out as a delivery service before expanding into distribution, transportation, and software development. Drawing on its network of distribution hubs and suite of software services, Blackbird tracks and monitors nearly every point in the supply chain from seed to sale in Nevada and California.

“During [the COVID-19 pandemic], brands and manufacturers have been removed from most touchpoints they have with consumers, which were in dispensaries or at in-person events,” Blackbird Director of Marketing JamalEdeen Barghouti said. “Now they need a way to connect with consumers and tell them about their products in their own voice, because they can’t rely on budtenders. So, Blackbird as it exists today is both a software and operations company that provides marketing tools for cannabis operators.”

Using the MyBlackbird platform, clients can store and analyze data including in-store and online inventory, sales records, and customer information—all essential ingredients for creating targeted marketing and communication campaigns, along with loyalty programs.

Methods and analysis

Data and analysis are essential not only for success, but also for survival. Some of the biggest brands in the industry discovered early on how insight gleaned from crunching numbers affected sales performance and responded by…crunching even more numbers.

Joe Hodas entered the cannabis industry after working in marketing for the consumer packaged goods, fast-casual dining, and healthcare industries. Now he serves as chief marketing officer at Wana Brands, one of the leading edibles companies in the United States and Canada. Data informs all decisions at Wana, he said—so much so, in fact, that the ten-year-old company recently hired its first in-house data analyst.

“We have spent [time and money on analysis for] the marketing side in particular, digging into who are the right companies to partner with to capture data and identifying where the pain points are—anywhere that data would be beneficial to us,” he said. “But we’ve also spent a lot of time using that data to figure out ‘Okay, now we have it. So, what do we do with it?’ Having someone in-house now, we can take unstructured data and really begin to do some analysis and get some additional insights out of it.”

Not all data is created equal. Brands in emerging states such as Michigan, Oklahoma, Massachusetts, and Illinois are just beginning to get a sense of what products interest their customers and why. Meanwhile, mature brands in Colorado and on the West Coast are looking for more detailed preferences and profiles that might reveal insights that could lead to competitive advantages.

“You can almost look at it on a state-by-state basis, and if you’re talking to a company from California or Colorado, they tend to be very savvy and very sophisticated in terms of using traditional business methods like market research to evaluate new products,” Hemans said. “They use testing, advertising, branding, and messaging to connect with their consumers and create these feedback loops that help them develop a new generation of products.

“On the other hand,” she added, “some of these emerging markets like Oklahoma are in that wild, wild west stage we were in about five years ago, and it’s cool to be able to come from a mature market and help guide these new entrants.”

When the pandemic threw the industry a curve ball in the spring of 2020, cannabis companies were forced to make some difficult strategic decisions in order to adapt to new realities. Many companies ramped up their delivery apps, menus, and services to better meet customers where they were. Whereas budtenders had been the primary influencers up to that point, since then companies have found new ways to sway consumers using digital and interactive platforms designed to educate and entice them into trying new products. Sometimes those platforms cut out the budtender altogether.

Until brands better understand what products and effects their customers crave, the hunt for bigger, better datasets will continue.

The Peak Beyond’s interactive smart stations and displays allow customers to browse and research products in retail stores up and down California; fortunately, all California shops were deemed “essential services” and allowed to remain open. Chief Executive Officer Jeff La Penna said his company now tracks more than 30,000 user engagements and more than 10,000 product interactions per day. In 2021, The Peak Beyond plans to launch a new product that will give companies more in-depth insight about how consumers make buying decisions as they peruse new products.

“We’re building a consumer behavior data dashboard that will allow [our clients] to log into our platform and monitor consumer behavior data in their store through our systems,” La Penna said. “They will be able to pair that with the transactional data they already get with their [point-of-sale system] and get some really awesome insights on how people are shopping. Then, they can use that to inform the layout of their store or what products they put out at certain times.”

The Peak Beyond’s system tracks customers as they engage with the smart stations’ interactive tables and menus, allowing companies to see how customers view and/or research products. Retail clients can use that information to adjust their marketing content and sales strategies.

“The branded environments give the customer access to the brand’s full marketing asset catalog, so it actually loops back around and can inform their marketing KPIs [key performance indicators],” said Jennifer Dye, co-founder and chief marketing officer at The Peak Beyond. In marketing-speak, KPIs (such as page views, traffic, and click-through rates) are data points collected by companies to help evaluate the success of marketing content and strategies.

In addition to interactive smart stations, the company also is developing a mobile and online ordering application that will allow consumers to access menus from home and on the go. “Part of what we’re addressing by creating this mobile ordering app is working to close that loop as far as our system goes and addressing the trend toward customer brand loyalty,” said La Penna.

Building consumer profiles

One of the most significant ways companies use data is to build consumer profiles around which they can customize marketing and sales tactics. Some even use these profiles to anticipate what consumers will want in the future. But data becomes even more powerful when it is assessed holistically as part of a larger picture. After all, consumers are not merely neat little packages of discrete datasets.

In 2020, a Forrester Research study commissioned by Fyllo surveyed decision-makers in marketing, analytics, product, sales, and compliance roles. Some of the takeaways from the study include:

  • Many brands lack a full picture of audience behaviors and interests. Fewer than 40 percent of respondents said they understand their audiences’ interests in emerging product categories, and only 34 percent have gained insight into their audiences’ interests and lifestyles.
  • Nearly nine in ten respondents (88 percent) believe understanding and speaking to customers’ interests and lifestyles is “very important” or “critical” to the success of their marketing programs, serving both to improve the impact of current campaigns and to identify net new opportunities to grow their audiences and customer bases.

In addition to data from the cannabis industry, Fyllo draws from other retail sectors including beauty, sports, and health and wellness to build a more comprehensive consumer profile for its clients. SoapBoxSample’s Hemans agrees building profiles of consumers based on a broader set of criteria is the best way to understand buying habits and product preferences. “I was in a data-room session yesterday with some big brains, and they did some very sophisticated analysis in a segmentation study,” she said. “With that, we’re developing six consumer profiles that create a more holistic picture of these customers and their lifestyle, not just related to cannabis. This really provides brands with some guidance as to who these people are, what their usage looks like, and what their lives on a whole look like.”

Although marketers stress the importance of staying ahead of and anticipating consumers’ interests and buying habits, that’s easier said than done, according to Forrester. “Most brands have a limited view of audience interests and behaviors that would power their media strategies over the long term,” the report noted. It also concluded brands are eager to expand their potential customer bases and are particularly interested in “high-value audiences,” which include online high-spenders, customers with high household incomes, early adopters, and influential customers who can help expand a brand’s reach.

“The safety of data is a huge conversation right now, and with cannabis that is still very, very sticky.”

JamalEdeen Barghouti, director of marketing, Blackbird

To help its clients build customer profiles, Blackbird compiles data from many different points along the supply chain; as a result, the company can offer brands a detailed view of consumer demographics and transactional data. According to Barghouti, “Most brands have large marketing teams and, from that perspective, the ability to isolate one customer who has a 16-percent chance of conversion versus a person who just happens to see your website. That is going to be a better use of people’s time and resources.”

He said texting and loyalty programs are especially popular with retailers because they allow marketers to refine audience profiles and better understand product trends before offering deals that are most likely to engage their customers. In a market where many consumers are newbies making sometimes random and arbitrary choices between products, it’s all the more important for brands to home in on their target customers as quickly and accurately as possible.

“If you’re a brand that has, say, a topical product, we can come to them and say, ‘Don’t waste your time exploring every single type of cannabis consumer. Just focus on what the topical consumer behaves like,’” said Hemans.

Tracking consumer trends

Gathering and analyzing data is one thing. Figuring out how it applies to your business and what to do with it is a different ballgame altogether. For brands looking to make a splash in new markets, understanding and utilizing consumer sales data is a high priority—and it’s not an easy proposition when most dispensaries offer dozens of brands and display hundreds of different products on their shelves.

Hodas said analyst firms and other second-party data providers are helpful in revealing consumer behavior, but blind spots exist; thus, the whole picture hasn’t emerged just yet. “They are great in terms of defining an audience and targeting that audience; being able to look all the way down even to the level of foot traffic in the stores that maybe can be driven by digital advertising. But I still don’t have the data that ties it all up…so we’re dancing around” the endgame, he said. “When I look at our platform, figuring out a way to say, ‘here’s a programmatic ad buy with a certain offer [that asks consumers to] go into a certain dispensary, and then I can tie it back to the POS to see [a targeted consumer] reserved a product based on [customer relationship management], all of those parts and pieces,” then he’ll have a successful paradigm. “We’re still missing that last link, and that frustrates me to no end,” he said. “I don’t have control over that.”

One of the most fundamental, yet nuanced, pieces of information companies need to understand is what type of results consumers are looking for when they buy particular products. Do they simply want to get high and relax, or do they have more complex motives?

“It’s important to understand if your consumers are looking for psychoactive products, do they want to feel all the effects? Because we’re seeing more and more people saying, ‘I want to use cannabis, but I don’t want to get high; I just want all the other benefits that come along with [cannabis use],’” said Hemans. “So that’s a really important distinction. We’re developing some consumer segments right now, and one of them is people who use cannabis to be more creative with some focus. They find [cannabis] to be almost like a stimulant. And it’s interesting, because it just really highlights how different the effects are for different types of people. For some people, it’s waking them up, getting them motivated. And for other people, they’re like, ‘I just want to sit on the couch.’”

How is all the sensitive information being stored and secured, and who will have legal access to the storehouse?

Hodas said when Wana set out to develop gummies that would take effect faster than typical edibles, the company spent several years refining the formulation, surveying consumers and evaluating product feedback at each step in the process. Product development “was partly driven by data and consumer feedback, and now that it’s in the market we can begin to test what messaging really resonates with consumers,” he said. “With that product in particular, the fast onset resonates, but we also were seeing data that was telling us there was literally confusion in the marketplace because other products and companies had said, historically, ‘This is a fast-onset product.’”

By the time Wana’s new gummies hit the market, the company had focused on a new theme for its messaging campaign: the type of high the Quick Fast-Acting Gummies deliver. Hodas said when edibles pass through the digestive system, THC transforms into 11-hydroxy THC, which is more potent than the native THC compound and takes much longer to kick in. When Wana tested its fast-acting gummies, which take effect in ten to fifteen minutes, developers realized the product produces a delta-9 type of high, which is what users experience when they smoke cannabis.

“So that message [of a delta-9 experience] really began to resonate, and we saw sales begin to creep up pretty aggressively,” Hodas said. “Since launching in March [2020], our three Quick SKUs have been in the top ten in varying levels in the market on a monthly basis for the past four to five months.”

Even with retailers, analyst firms, and brands working together to collect and crunch reams of data up and down the supply chain and across the U.S., a complete picture of modern cannabis consumers lies a good distance in the future—if one can be developed at all considering the creature’s complexity. As with all data collection in the digital age, an elephant in the room overshadows the effort: How is all the sensitive information being stored and secured, and who will have legal access to the storehouse?

“The safety of data is a huge conversation right now, and with cannabis that is still very, very sticky,” said Barghouti. “The majority of people who still are arrested or charged with cannabis-related crimes are people of color. When you are more likely to be pulled over and you’re more likely to be charged with a crime, then what does that mean about that person’s data? If somebody is able to subpoena information and decide this person is an unfit parent because they spend this much on cannabis… You know what I mean? There’s so many ways the industry needs to be very aware of how data can be perceived by those outside the industry, so we have to be able to add context to it around safety and security.” 

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