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Building With, Not From, Medical Markets

We interrupt your normal feed of CBD-related content to discuss the future of adult-use cannabis states. Notably, with Illinois’s cannabis legalization signed into law and the market set to open in early 2020, it’s a good time to take stock how consumer behavior will shift in that market, as well as other medical markets that may transition to adult-use in the near term, including New York, New Jersey, Florida, Arizona, Ohio and New Mexico. It’s also a good time to review why medical users must remain a focus for cannabis companies.

In the spring of 2018 we set to find out how self-defined medical users of cannabis had changed their behaviors once the states they were living in legalized adult-use cannabis for our Medical Cannabis Consumer report. In order to take a consumer-centric view, we simply asked respondents if they use cannabis primarily for recreational or medical purposes. The latter formed the “medical user” group.

These medical users reported shifts in their usage of cannabis and other products post adult-use legalization in their home states.:

  • Over a quarter of medical users reported that they were using more often than before adult-use legalization
  • Edibles and topicals emerged as the two categories users indicated that were consuming more of post-legalization
  • Half of medical users were still using their medical card for cannabis purchases, meaning half were no longer using their card
  • Usage of over-the-counter pain relievers and sleep aids, as well as prescription pain relievers and anti-anxiety medications dropped

(For more detailed findings from this report, please find our free whitepaper, available here)

Our findings match many of the sales data reported by various outlets, showing medical cannabis sales shrink after adult-use legalization, while recreational or adult-use sales drive the market.

Medical Users Don’t Disappear

As we gear up for Illinois (and presumably others) to enter the adult-use market, it’s important to recognize that these medical users do not disappear, nor should they be forgotten for essentially supporting a legal cannabis market in their state. Their usage will almost certainly change and expand as noted above, while their medical cards may be left at home.

Despite official medical card usage and sales declining, it’s also true that consumers report using cannabis for a variety of reasons dependent on the occasion regardless of legalization status. One day it may be to reduce anxiety before a social gathering (perhaps a “medical” reason for the consumer) and the next day it may be to enhance a concert experience (perhaps a “recreational” reason). Essentially, consumers vacillate between medical- and adult-usage on a day-by-day and occasion-by-occasion basis.

Medical Users Should Not Be Left Behind

So why the call to remember these users? It seems as though cannabis producers are giving these consumers short shrift as all eyes turn toward the dollar signs of a larger adult-use market. Product shortages have been reported in medical markets before adult-use “go live” dates and consumers and dispensaries have been faced with a more limited selection as producers stockpile inventory. (See Canada and Illinois) In an odd twist, this dynamic often drives the medical users to the black market to get the product they want, which seems like a perverse way for an industry to treat its best customers.

For dispensaries and cannabis product producers, the growth from new consumers is very exciting, but the medical user community is the built-in cannabis customer base. The opening of new adult-use markets represents enormous opportunity for cannabis, but the enthusiasm that comes from these markets’ potential must be matched with a recognition of how that market was built, by whom, and why.




Eric GiandeloneEric Giandelone

Eric Giandelone

Eric Giandelone is the co-founder of High Yield Insights. High Yield Insights is a consumer-insights firm dedicated to the cannabis market, fostering constructive, fact-based discussions that lead to well-grounded strategic decisions. With deep roots in multiple consumer-facing industries, High Yield Insights brings decades of expertise to this dynamic, quickly evolving market.

Eric can be reached directly at [email protected]

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