One thing for sure, it isn’t just stoners like Cheech and Chong any more. And these new users and those non-users embracing legal cannabis are driving the market are spread wide and far across the demographic spectrum, according to new research from Quinn Thomas and DHM.
As noted in a recent commentary from DataTrek, co-founder Jessica Rabe thought it was important to examine just who is driving the push for cannabis legalization and dispel notions that marijuana isn’t just for movie stoners or older hippies.
The Quinn Thomas/DHM research sampled 900 marijuana users in Colorado, Washington and Oregon and also conducted two focus groups in Portland and Seattle. They chose those three states because Colorado was the first to allow recreational sales over five years ago, followed by Washington and Oregon, so they have the longest track records. Their research also notes that “Oregon has the highest percentage of monthly cannabis consumption in the country among its adult population – 20%”.
Let’s take a look.
Cannabis User Demographics:
Gender: Male (60%), Female (40%)
Age: 22-34 (30%), 35-54 (+35%), 55+ (35%)
Household Income: Less than $25k (24%), $25-50k (23%), $50-75k (19%), $75-100k (14%), $100-150k (14%), Over $150k (6%)
Relationship Status: Single (33%), Married (51%), Cohabiting with long-term partner (11%)
Party: Democrat (35%), Republican (26%), Independent (32%), Other (7%)
Education: Less than high school (30%), Some college/2-year degree (33%), College (19%), Graduate degree (16%)
Rent or Own: Rent (32%), Own (60%), Something else (8%)
“It is a population that has much more in common with a typical middle-class resident than with the caricatures created in Hollywood movies,” noted DataTrek’s Rabe.
Users generally match the U.S. average educational attainment, household income levels, and the political composition and race and ethnicity breakdown of the three states researched, noted the survey. This includes everyone from young-single renters to middle-age homeowners with kids to retired seniors.
Rabe added that there were two caveats to this: First, men consume marijuana more than women. Secondly, frequent users cluster at the lower end of the income scale. For example, 35% of regular users (who consume almost daily) have household gross incomes of under $25k per year compared to 11% of infrequent users.
So, do users drink along with their smoke?
The survey found that 38% of respondents drink less when they canna-indulge, 58% drink the same amount and only 4% drink more. And of this group, 24% said that they replace alcoholic beverages with cannabis.
“Over one-third of marijuana users drinking less post-legalization is a significant stat, especially since that’s across the board in terms of frequency of use,” Rabe noted. “Of course, it’s truest for regular users (near daily) with 58% drinking less since legalization. But 32% of occasional cannabis users (7 to 8 times a month) and 26% of infrequent marijuana users (2 to 3 times a month) report drinking less as well.”
DataTrek also pointed to some other statistics from the Quinn Thomas survey
Consumer Behavior
Comparing cannabis use before and after legalization:
Regular consumers who consume daily: Pre-legalization (48%), Post-Legalization (74%)
Occasional consumers who consume a few times a month: Pre-legalization (11%), Post-legalization (27%)
In what situations do you typically use cannabis?
On weekdays, during the work week: Yes, often (29%), Yes, occasionally (34%), No (37%)
On weekends and holidays: Yes, often (39%), Yes, occasionally (46%), No (16%)
By yourself: Yes, often (39%), Yes, occasionally (35%), No (27%)
So, what does Rabe come away with?
First, she said recreational marijuana legalization has led to greater demand across the board, from regular users to even infrequent users.
“If you’re invested in public marijuana companies, or want to do so, this is clearly a positive for the industry’s growth rates. That said, one blind spot in the report was its lack of mentioning the black market. We keep emphasizing that the legal cannabis industry’s total addressable market hinges on appropriate regulations and reasonable tax rates. Marijuana taxes in California and Washington, for example, are too high and support illegal sales. Since the black market has existed for decades, it’s already entrenched and efficient across the US. Regular users, in particular, likely already have “a guy” and won’t want to incur high tax fees even if they can buy it from legal dispensaries.”
Secondly, the more cannabis people consume, the less they drink.
“We also continue to note this important substitution effect because it has a meaningful impact on public liquor companies. Many have already been vocal about this risk. Liquor and beer sales are slowing or declining and further marijuana legalization across the US will likely accelerate these trends. That’s why liquor companies, such as Constellation Brands and Molson Coors, have either taken a stake in a Canadian marijuana company or have partnered with one to make non-alcoholic, THC-infused drinks.”
She added that if one is invested in the liquor industry, it’s important to understand that large public companies in that space haven’t just taken notice, but are already taking action to diversify their product offerings or business models. Those who don’t will likely lag behind.
And lastly, the report noted that their focus groups associated alcohol with “going out” and marijuana with “staying home”. Rabe said this is likely because consuming marijuana in most public places remains and is illegal.
“We think this will change as laws loosen, the cannabis stigma fades, and more legalization rolls out across the US,” she said. “The industry has already started developing an entire new distribution channel similar to bars and lounges. Consumers can go to marijuana cafes in Washington, for example. It’s still early days, but marijuana is creating a platform where eventually consumers don’t have to go to a bar for liquor, but can go to a cannabis club, marijuana bar, or of course just consume the drug at home.”
To see the entire Survey report from Quinn Thomas/DHM, please click here: https://www.quinnthomas.com/wp-content/uploads/2019/03/cannabis_next_door_report_march2019.pdf
