Major Cannabis Companies Are Gearing Up To Deliver Differentiated Products To Meet Shifting Consumer Consumption Preferences

Major Cannabis Companies Are Gearing Up To Deliver Differentiated Products To Meet Shifting Consumer Consumption Preferences

One of the most exciting changes in the cannabis industry is related to the amount and the quality of sales data that is being reported. Firms like Headset and New Frontier are two leading cannabis data analytics firms and we have been closely following the reports that are being generated by such firms. 

Last week, Marijuana Business Daily published an article that highlighted the makeup of cannabis products that were sold in 2020. The article utilized data from Headset and broke down the types of products that were purchased together. 

One of the metrics from the data that was provided by Headset that stood out is related to cannabis beverages. According to Headset, consumers that purchased cannabis beverages were most likely to also purchase edible products. More than one-third of consumers that purchased cannabis beverages bought an edible product as well (if they purchased more than one product).

We consider cannabis beverages to be one of the most exciting verticals of the industry and believe the vertical is barely in the first inning of a major growth cycle. We are bullish on this trend and expect the cannabis beverage market to impact alcohol sales over the long-term. 

During the last year, we noticed an increase in the number of large alcohol brands that highlighted the potential impact that legal cannabis could have on alcohol sales. For this reason, we expect more alcohol companies to follow the path that Constellation Brands (STZ) and Molson Coors (TAP) have taken with the cannabis beverage market. 

Over the last few years, Constellation has invested more than $5+ billion in Canopy Growth Corporation (WEED.TO) (CGC), a leading Canadian Licensed Producer (LP). Once cannabis is legalized in the US, we expect Constellation to acquire the rest of Canopy Growth and capitalize on the cannabis beverage market in the US.

When compared to Canopy Growth, Molson Coors took a different approach to the cannabis beverage market. A few years ago, the company formed a partnership with HEXO Corporation (HEXO.TO) (HEXO) to capitalize on the cannabis beverage market and the relationship only recently started to benefit both businesses. 

Going forward, we expect cannabis companies to benefit from the improved access to data. With this type of information, companies can better understand consumer buying patterns and this could have a positive impact on how manufacturers improve merchandising and marketing efforts.

Over the next year, we expect to see significant changes in customer buying patterns as new medical and recreational cannabis markets open. We are closely following the companies that are going to benefit from changing purchasing patterns. 

If you want to learn more about this trend, please send an email to support@technical420.com with the subject “Cannabis Consumer Purchasing Patterns” to be added to our distribution list. 

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Authored By

Michael Berger

Michael Berger is Managing Partner of StoneBridge Partners LLC. SBP continues to drive market awareness for leading firms in the cannabis industry throughout the U.S. and abroad.

Published at Mon, 29 Mar 2021 11:49:03 +0000

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