Hot for reefer: 76% would try legal cannabis therapeutic product

27 November 2018 Authored by Consulting.us

Positive perceptions of medical and recreational marijuana – and the companies that sell them – could be a boon for brands, according to a report from consultancy A.T. Kearney.

Responding to relaxing norms, policing costs, and taxation incentives, governments around the globe are relaxing their laws surrounding cannabis/marijuana use. Last year, Uruguay became the first country to legalize recreational cannabis use, while Canada followed suit earlier this fall. Meanwhile, in the US, recreational marijuana is legal in nine states, while medical marijuana is legal in 30. The age of moral panic surrounding ‘reefer madness’ or ‘jazz cigarettes’ has loosened into one where elderly folks get it prescribed for their glaucoma. Nonetheless, the possession, use, distribution, and sale of marijuana and derived products conflictingly remains illegal under US federal law.

According to an A.T. Kearney study of 1000 Americans and 1000 Canadians, North American consumers are knowledgeable about cannabis products, while also being open to trying the increasingly legal herb. About 80% of consumers surveyed have used or know someone who has used cannabis products, with smoking (92%) and edibles (61%) being the most common usage formats.

Though the ‘intoxicating’ element of marijuana is well-known (specifically, the THC compound), the survey found that 76% consumers knew that there was a therapeutically beneficial but not psychoactive element of marijuana (cannabidiol or CBD). A.T. Kearney surmises that CBD products could have an even larger market than recreational marijuana.

proportion that would try legal therapeutic and recreational marijuanaOverall, 72% of respondents said medical cannabis should be legal, with 21% responding that both recreational and medical cannabis should be legal, and 51% saying that only medical cannabis should be legal.

Across all age groups, about 80% agreed that cannabis products offer wellness or therapeutic benefits. Moving on from this, the survey found that 76% would try a legal therapeutic (non-intoxicating CBD) cannabis product, while 55% of US and Canadian consumers would try legal recreational cannabis.

In terms of what kind of recreational products they would consume, the most popular category was foods – like candy, chocolate, and snacks – while the second most popular category was ‘smoking.’ Meanwhile, the survey found that if consumers were to replace alcohol consumption with recreational cannabis, beer would see the highest substitution effect, at 27% of respondents – compared to 22% for wine and spirits.

Relaxing marijuana laws and positive consumer attitudes mean that potentially huge markets are opening up, with one estimate projecting the US market to be worth $40 billion by 2021. A Deloitte projection for Canada expects the legal cannabis market to be worth $4.34 billion in 2019.
releasing a cannabis product does not worsen consumer perceptionAccording to A.T. Kearney, the market represents an especially large opportunity for trusted brands. 72% of North American respondents said that brand was a very or somewhat important factor in assessing the quality and safety of cannabis products. In addition, releasing a cannabis product does not significantly worsen consumer perception, with 32% saying that the launch of a cannabis product from their favorite brand would improve perception, while 54% said it would not change their perception of the brand.

Of those who said it would improve their perception of the brand, 49% said they would buy more frequently from that brand, 46% would feel more brand loyalty, 36% said the brand would better represent their values, and 42% said they would perceive the brand as ‘trendy’ or ‘innovative.’

"The survey clearly demonstrates the viability of the market for cannabis across multiple consumer segments,” commented Randy Burt, a partner in A.T. Kearney’s consumer and retail practice. “CPGs and retailers focused on health and wellness, snacking, functional food and beverage, and beverage alcohol need to have a perspective on how they will approach the cannabis opportunity."

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