In a data-driven business environment, everyone is waiting on the most up to date statistical reports to show what direction consumers are spending their money. As a relatively new industry, the legalized marijuana sector still is working on how to best assist consumers and discern trends to sort out the hype from the reality. That’s created a whole new side business in marijuana: data analytics.
A company that has stepped to the forefront in this area is New Frontier Data. The company has partnered with Baker Technologies, which provides customer relationship management and marketing automation platforms to cannabis businesses, for access to an immense database of legal marijuana transactions.
In April, based on this data, the company released its annual “The Cannabis Industry Report: 2017 Legal Marijuana Outlook.” They uncovered some interesting trends.
Medical marijuana dominates the market. Recreational marijuana is otherwise known as the adult-use marijuana which has been the center of much of the recent media attention, partially because of its reflection of the wholesale change in how millions of Americans view marijuana. Voter have now made recreational marijuana legal in eight states: Alaska, California, Colorado, Maine, Massachusetts, Nevada, Oregon, and Washington, as well as the District of Columbia.
However, the report found that consumers of medical marijuana — legal in more than half the states — buy much more frequently and spend more than recreational users. The report included the following findings:
In 2016, recreational users shopped for cannabis, on average, every 14 days and spent $49 per transaction. That same year, medical marijuana users shopped every 10 days and spent $136 per transaction. In 2017, medical marijuana sales are expected to total $5.3 billion, with a projection to reach $13.2 billion annually by 2025.
In 2017, recreational marijuana sales are expected to reach $2.6 billion, with a projection to reach $10.9 billion by 2025. The numbers provide needed insight for entrepreneurs looking to enter the retail cannabis business, New Frontier Data CEO Giadha Aguirre De Carcer said in a news release.
“Given the size of the market, knowing who your customers are, how and when they shop, and what they buy are fundamental building blocks of developing any effective retail strategy,” he said.