Tapping New Cannabis Consumer Markets – The Power of Curation

Tapping new cannabis consumer markets for dispensaries and brands is not always easy. Pairing restricted marketing channels and regulations can present many challenges.

What if the answer is NOT the next best marketing campaign or highest-THC product but simply meeting consumers where they are?

Let me explain my point of view a little further. When first jumping into cannabis market research in early 2021. I was fascinated by the number of industry experts talking about the plant.

Familiar with the legacy market and born in Nebraska, where cannabis is still inaccessible and illegal, it blew my mind! There was a professional world of people doing their thing related to cannabis.

Master Mode vs. New Cannabis Consumers

After spending hours reading, absorbing, learning, and studying the market to get more information, I could not help but notice one common thread.

While the information I found was incredible and valuable, it mostly assumed consumers had a fundamental understanding of the cannabis market at depths industry experts and professionals understood it.

In simpler terms, we might be drinking too much of the Kool-Aid and convincing ourselves the consumer is enjoying the same drink. Some rad inspiration dropped in an interview with Gary Vee in 2018 still feels true today. We’ve made progress, but we have a long way to go. 

New to the legal market, I experienced confusion and intimidation but was willing to explore, given my background and knowledge of the legacy world.

So where are the new cannabis consumers in their purchasing journey?

Through talking to people, consumer research, validation work, and considering my experiences– the reality is their Kool-Aid tastes different.

They still feel the deep stigmas or understand so little even the difference between a battery and a cartridge can be confusing.

If we consider the consumer perspective, there has to be a better approach to tapping new cannabis consumer markets, educating to break stigmas, and simplifying product selection.

Now– using the mindset of meeting consumers where they are. Let’s dive deeper into some topics we hear about regularly and how we might demystify some of the current assumptions.

Tapping New Cannabis Consumer Markets Buying Weed Wrong Google Search Result Page

Google SERP results for Buying weed wrong

Consumers only want high-THC products

Man, you have to love this one! Data shows customers are primarily asking for the products that test the highest in THC—forcing brands to produce products with higher THC content to compete.

It implies cannabis consumers only want to be as high as possible, not great for our cause or breaking stigmas. The discussion often points to consumer ignorance and lack of knowledge, as explained in more detail in this Forbes article. Almost always without any better advice or solutions to navigate selections (even from experts).

Hypothetical product selection – ask yourself this?

If you went to Walgreens looking for a pain reliever to help a killer headache and there were only three aisles of product classification (Up All Night, In The Middle, On The Couch), and you had to select products uneducated, hoping to relieve your head pain, what products are you grabbing first?

Better yet, what aisle are you starting in?

Yep! I’m starting with the highest percentage of whatever XYZ active ingredient I might find too! That, and Up All Night, party!

“If one active ingredient—THC—is made to shine above all the others, and there’s limited education about it, it makes sense that flower consumers will prioritize THC.”

-Christine Giraud for Leafly

Leading us to the next point of discussion and confusion beyond the importance of THC potency education. We send mixed signals about our current labeling structure used to help consumers with better product selection.

Tapping New Cannabis Consumer Markets Indica, Sativa, Hybrid Google Search Result Page

Google search results for Indica, Sativa, Hybrid information

Idica, Sativa, Hybrid?

Headed to visit the budtender with hopes they are a strain wizard or at least give a shit.

Here’s a quick breakdown of how we often hear professionals talk about (Indica, Sativa, and Hybrid)? 

  1. The labeling structure is inaccurate.
  2. It means nothing and tells the consumer nothing.
  3. The effects are more about terpenes and cannabinoids, but most consumers do not understand the complexity. 

Again, words of experts talking, not consumers trying to familiarize themselves with a new, extremely regulated, ever-changing– and confusing market.

If the professionals spend that much time talking and writing about it, you can almost guarantee the average consumers are TV series LOST– floating on a different island.

Recreational consumers were never waiting for approval

Opinion time, favorable or not.

There’s not necessarily a large number of recreational consumers waiting for the federal government to approve their consumption. That’s why the legacy market exists. Shhhh!

This consumer group has NOT changed beyond new product horizons, and they can only get high on so much of the supply.

So, the question is, how do we increase demand, educate consumers and break stigmas?

Because, Listen Linda, Listen– that is the ONLY way to start breaking the barriers to new market share. We point to the problems in our industry as professionals with a growing list of articles written across topics providing some clear validation.

Painting bigger pictures – It’s time to be Picasso

The reality, we’re too busy hustling our day-to-day so we can keep the lights on to be Picasso painting bigger pictures right now. I get it!

But when the retail price of cannabis continues to drop, feeling like a race to the bottom, with squeezed margins and no wiggle room left to compete. It is time to look at ways to diversify the market, or the pain is not going away anytime soon.

Often we hear, “we’re waiting it out.” I mean this wholeheartedly, what are we waiting for exactly? For a flatlining recreational consumer base to get richer or grow bigger lungs?

We already know what a maturing market looks like, California and saturation.

It is simple economics that a continued increase in market supply (new brands and products), paired with a limited and flatlining demand (consumer market), will continue to drive prices down.

That sounds a bit gloomy but stay with me for a second.

What are your plans for overcoming current and future challenges to reach your goals of expansion or increased revenue? Have you thought about it?

We have, more than we care to admit! Let’s dig in a little.

Tapping New Cannabis Consumer Markets

When you look at the standard models for growth and diversification created in other markets, the cannabis industry still has a lot of work to do.

Take the Ansoff Matrix for example, due to the state-by-state nature of legalization and the product development trends that follow, you have an influx of different stages happening across state markets, mostly developing quadrants 1-3 (market development, product development, market penetration).

Tapping New Cannabis Consumer Markets Ansoff Matrix graphic

Tapping New Cannabis Consumer Markets Ansoff Matrix example.

That makes sense, right?

The industry still has a lot of maturing to do and in traditional markets, a product growth strategy would execute a market diversification plan (or the introduction of new products/services to a new market) last because it’s the riskiest strategy.

HA HA…if you have been here long, you know this is NOT a traditional industry. Most traditional industries are not up against fighting stigmas from almost half a century of propaganda and war on drug campaigns.

It’s going to require more risk, surprise!

Just kidding, risk is not a new concept for you fucking troopers!

We need some out-of-the-box thinking to break the cycle, and we can’t wait until the market fully matures before we look at diversifying if we want to turn the race around.

The opportunity to tap into new cannabis consumer markets, break stigmas and increase market size does exist!

It lies in meeting new consumers– (the canna-curious, have a need, new to the sesh), where they are in their purchasing journey. Helping them discover products based on their personal needs, life events, or ailments.

It’s going to take more creativity than a super drippy ad campaign to open that door to exploring, many were conditioned to believe that cannabis is the devil’s lettuce. Some are completly unaware cannabis can have wellness effects.

To be clear, I’m not suggesting you go slap some lame-ass branding that looks prescriptive on the packaging either. Health and wellness consumers are still cool and trendy, while they might not resonate with the drippy stoner content, they still want to feel hip, now, and wow!

So what questions do we ask?

Why would a new consumer seek cannabis as an alternative? That’s the question we need to lean into. They might become recreational users over time, but getting them to try and experience the benefits begins with having a solution to their needs today.

A reason that aligns with their moral compass, if you will.

Tapping New Cannabis Consumer Markets consumer intent profile graphic

New Cannabis Consumer Intent Profile

How can we meet new cannabis consumers where they are?

Our team at DankLocal, feels strongly that curated cannabis subscription services have a few benefits in tapping new cannabis consumer markets by meeting consumers where they are.

  1. Product Curation makes it easier for consumers to navigate products based on their needs. In Walgreens’ terms, it creates a section for the – pain reliever, relaxation, and better sleep products, so consumers are not stuck grabbing the highest percent of whatever to try.

  2. Product Discovery new consumers need to try several products and cannabis strains to find the ones that work best for them. With product availability frequently changing, it provides consumers the convenience of regularly trying and discovering new items curated based on their specific needs.

  3. It’s intimidation-free removing the need to be an expert or do research to find and try curated products aligned to their needs.

  4. It’s more discreet, in a society still driven by stigma a discreet option is necessary to reach some consumers. Everyone is not ok with the possibility of running into Betty from the block at the Dispo, especially new consumers.

Now, implement a system that allows a feedback loop for improvement, and were on our way to tapping new cannabis consumer markets and better understanding and serving cannabis consumer needs.

The Power of Cannabis Curation for Dispensaries and Brands

In a new expanding cannabis market, the power of curation is not only beneficial for consumers, but it brings many benefits for dispensaries and brands too.

While a focus on saturating the recreational market will only go so far– the health and wellness consumers are an underserved, lightly tapped potential.

“We estimate the spend on wellness products and services to be more than $450 billion in the United States and growing at more than 5 percent annually.”

– McKinsey Company

Back to our Walgreens analogy, the value of having a feedback loop from consumers on the products best aligned to certain aliments or conditions creates an environment where product differentiation becomes easier than Indica, Sativa, hybrid, flower, wax, cart, and better branding.

Instead, you can be the pain reliever or sleep better at night company. Making room for more brands to diffrentiate and shine on a less competitive battle field with bigger market share.

AND– in turn, providing better data to educate budtenders serving in-person traffic or future brands to evolve products that serve consumer needs.

Let the consumers do the research and validation work!

A few final thoughts

Are we 100 percent sure we have the answers to all the market share problems and stigmas, nope!

What we know is a pile of research, validation, and logged conversations indicate it’s a step in the right direction to breaking ground for a more mature market.

Alternatively, we can keep doing the same shit, expect different results, chase the neighbor’s BOGO deals, and bitch all the way there.

Last thought to leave you with, but a brilliant one in an environment hostile with tight margins.

It brings consumer loyalty back to the brand instead of your next best BOGO deal. Having the top-rated cannabis sleepy time subscription in the city is a service you can only get in one place. (a whole topic for later)

Hit us up! We have so much more to share. 

Want to implement a cannabis subscription service at your dispensary? Learn more about our pilot program–and get Dank!

DankLocal’s cannabis subscription model and technology platform is dedicated to creating a market-wide standard that keeps subscription service dollars with dispensaries, brands, communities, and professionals. By providing easy-to-use subscription software that integrates with the technology they already use to make curating and managing compliant subscription services a breeze–all while simplifying a disparate market for consumers.

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