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An Understanding for New Entrants: The CBD Consumer Is Not Homogenous

When we speak with cannabis users, we like to dig a bit deeper beyond favored strains, go-to brands, and such. So when we polled 1500 CBD consumers, we were interested to find out much more than their thoughts on CBD. We wanted to know – beyond being a “CBD consumer” (at least for our April 2019 study, that being someone who regularly uses products containing CBD only) what does this person gravitate to? Not in terms of specific products, although we did dig into that elsewhere, but in terms of ratios at least in most well known cannabinoids.  

What did we discover? While nearly half of CBD consumers gravitated to products containing CBD and CBD alone, many see a blend of THC and CBD as best. For the chart below, you could just as easily read “CBD Heavy” as “CBD Dominant”, that is products containing at least a 2:1 ratio of CBD to THC.

Source: "The CBD Consumer Experience, Part One" 
April 2019, High Yield Insights

While not surprising necessarily to this audience, the findings point to a reality rarely discussed in mainstream channels: the CBD consumer is not homogenous. For example, we analyzed results from the April study looking for custom consumer groups. Using a range of attributes as inputs into a Two-Step Cluster Analysis we uncovered five consumer “personas”. Of those, only two tended to use products containing only CBD: those being, in keeping with classic market research tongue-in-cheek clusters, “Senior Susan” and “Millennial Marc”. The two groups make up a significant portion of consumers for CBD-only products: 14% and 26%, respectively. Even so, fewer than half of each cluster exclusively use products containing CBD only.

The complex composition of CBD consumers is an issue worth considering especially for companies new to the cannabis market thinking about how to best seek out and engage with consumers. Talking exclusively about CBD and not at least signaling awareness of the role THC and other cannabinoids play is one approach. Doing so might alleviate concerns among the current and potential CBD consumers you are targeting. Talking about CBD in a vacuum might preempt some of the frequently asked questions arising from a consumer’s lack of understanding. (No, CBD will not get you “high”, etc.) However, this path might not resonate as well over time. Why? For at least two reasons: firstly, as more markets open up consumers will begin having broader access to cannabis. With broader access, consumers will value engagements that foster more holistic discussions. More and more people will want to know how CBD functions with other compounds present in cannabis. Second, data indicates that consumer behavior evolves over time. We found numerous change drivers but an executive perspective is best suited to this space.

Source: "The CBD Consumer Experience, Part One" 
April 2019, High Yield Insights

Note that the story above is partially a result of availability. States historically with a tightly defined medical program or no medical marijuana program at all will present consumers with fewer options to learn about and sample a broad range of product options. Similarly, CBD products have not always enjoyed broad accessibility. Even so, it’s reasonable to interpret the results as demonstrating an evolution in consumer preferences over time. In short, consumers seem to prefer gradually incorporating some THC into a cannabis regimen. 

While these truths should not take priority over all other strategic considerations, oversimplifying the CBD consumer looks like a path to failure. Certainly, industry leaders in CBD have established a brand identify and trusted relationships with consumers without offering products containing THC, and new entrants can succeed doing the same. A micro-level understanding of the CBD consumer might prompt new entrants to revisit a product development and branding strategy. For instance, a portfolio play might merit a range of products with some containing THC and others containing CBD only. Regardless, companies taking a 360 view of the CBD consumer will be in a better position to make better informed and strategically sound decisions.

Mike LuceMike Luce

Mike Luce

Prior to co-founding High Yield Insights, Mike Luce led multi-million dollar insights engagements with Fortune 100 consumer goods companies. Mike has nearly 20 years experience developing market insights for some of the world’s leading consumer brands, including Procter & Gamble, PepsiCo and General Mills, and retailers, such as Wal-Mart and Kroger.

High Yield Insights applies best practices and capabilities drawn from that experience to the dynamic cannabis industry.

Mike can be reached directly at [email protected]

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