In our previous newsletter, the ongoing legalization in the U.S. and future forecasts were discussed based on the 2023 US Cannabis Report from New Frontier Data [1]. This newsletter will dive into the shifting landscape of cannabis consumers in the U.S.: evolving demographics, preferences, and spending patterns of modern cannabis users. 

The cannabis industry has undergone a significant transformation in recent years, and as a result, the number of people using cannabis continues to grow. The total number of U.S. Cannabis Consumers has increased from 28 million in the year 2012 to 52 million in 2022, and is predicted to grow to 69 million by 2030 [1]. It seems that this also affects the demographics of cannabis consumers, which in turn shapes the cultural cannabis landscape.

The Consumer Base

The cannabis consumer base is diverse, consisting of people from different ages and backgrounds who use cannabis for different benefits. The simplest way to describe demographics is to divide consumers by generation (Figure 1). According to a 2020 Flowhub article on cannabis consumer demographics, Millennials (People born between 1980-1994 in this article) account for the largest amount of sales, followed by Gen X (‘65-’79), Gen Z (‘95-2015), Boomers (‘44-’64) and the Silent Gen (‘28-’43) [2].

A 2022 National Frontier Data report “Cannabis Consumers in America” describes nine archetypes of the cannabis consumer and provides a more in-depth look at the evolving consumer base [4]. These archetypes are roughly based on the frequency of use (low-high) and origin of sourcing the product (formally in businesses, or informally through family and friends or illicit sources). One of the distinctive traits between archetypes is between medical users and recreational users, but each archetype has a description based on multiple aspects of behavior and demographics.

The report also notes that evolving legalization may impact how infrequent consumers interact with the market. The infrequently consuming archetypes are rarely registered patients, whether due to their infrequency of use or purchases in illicit markets. If those markets turn legal, consumers may transform into higher-frequency, medical-based archetypes. Since medically focused groups are seeking non-flower products, they regularly attend regulated businesses to acquire their products [4].

In terms of gender, men still make up the majority of cannabis consumers. They spend more and buy more overall. Women have a strong preference for wellness-adjacent products. Men dominate markets like concentrates and flower products, indicating a male preference for inhalable products. Finally, women buy CBD at a significantly higher rate than men, aligning with their apparent preference for wellness-adjacent products [4].

Regarding the method of consumption, a Headset report on demographics reveals that younger generations prefer vapor pens over their elders (in line with decreases in the smoking of tobacco), while older generations have a slight preference for wellness-adjacent products like tinctures & sublinguals, topicals, capsules, and edibles [3]. Also, Boomers continue to prefer traditional flower products. Interestingly, although the older generations have a smaller market share, they spend more per visit and buy higher-priced items than the younger generations [3].

Key Trends

Together, these reports highlight several key trends that are shaping the evolving landscape of cannabis consumers.

• Cannabis consumption is becoming more normalized: With more states legalizing cannabis, the stigma around cannabis is diminishing, and cannabis consumption is becoming more mainstream [1,4].
• Cannabis is gaining popularity as a wellness product, particularly for its perceived benefits for pain relief, anxiety, and sleep. [4]
• Product diversification is increasing: Cannabis companies and consumers are expanding beyond traditional flower and edibles to a broader range of products, such as topicals, concentrates, and vape pens [3,4].
• Cannabis consumption patterns vary by age and gender: Younger consumers are more likely to consume cannabis, and women are more likely to use cannabis for wellness purposes [4].
• THC percentage and price, respectively, are the new leading factors considered when consumers purchase cannabis [5].

Conclusion

In summary, the U.S. cannabis industry is rapidly evolving, and understanding the changing demographics, preferences, and spending patterns of modern cannabis users is vital for businesses and investors looking to succeed in this growing industry. While Millennials remain the dominant group in the cannabis industry, Gen Z is the fastest-growing age group [3]. Finally, the normalization of cannabis consumption, demand for higher-quality products, and a wider range of purposes for use, are the three key trends to watch. These trends are transforming the cannabis industry and should be taken into account by businesses and investors when developing effective marketing strategies and products that meet the changing needs of consumers.