In the New Cannabis Industry, the Consumer Must Be King

Oct 3 • Marketing Research, News • 3926 Views • 1 Comment on In the New Cannabis Industry, the Consumer Must Be King

By Claire Kaufmann, MBA | October 2, 2014

Right now the marijuana market is totally bass-ackwards. Due to a lack of centralized industry regulation, the growers (i.e. the producers), not the consumers, are largely determining the direction of the market.  And, because we have no whole, honest picture of our market, (i.e. demographic market data) we can’t mature as an industry and evolve to function like a traditional CPG market, with products created to fulfill the needs and wants of the consumer.

While traditional CPG categories like natural foods or craft beer use documented consumer trends to inform NPD/R&D, none of that is available in the cannabis industry. In fact, in creating the legal and/or medical dispensary model, we’ve actually created more distance between growers and consumers.

In an honest attempt at market data, we as an industry have made some progress. We have some thoughtful reports out there on the growth of the market year-over-year, and even some great seed-to-sale technology emerging that is able to filter demographic data, but in reality there is no centralized system tracking at all. (Some with privacy concerns probably think this is a good thing.) The reasons for this lack of tracking are fairly obvious – i.e. federal policies, decentralized regulatory systems and so on.

In the rest of the CPG world, this void between producers and consumers is typically filled with marketing companies that bundle and sell data aggregated from retailers. Companies purchase this data, study it and use it to inform what products to create.  Without collective demographic knowledge, we aren’t able to observe our own market.  When we can’t see the forest through the trees, our strategies run the risk of becoming short-sighted. We let our current customer by default become our most important customer, when in the long term that might not be the right decision. And, intuitively it’s no surprise that a “blind” market driven by creatively pent-up growers has become more about wizardry than collective wisdom.

Of course, the real cost at the end of the day is to consumers, who could be getting better products that better serve their true needs, if we could only study what they really were.  Over the next decade regulatory systems will emerge, but until systems crystalize, let’s be mindful of what products we put in the marketplace.

Collectively, we need to ask ourselves, do we as an industry need to let research and policy catch up with R&D?  In an effort to innovate perhaps we all need to stop and think about what the image of a marijuana lollipop does for policy changes in Washington. We don’t want to commit self-sabotage, and we can’t afford to become the stereotypes we have worked so hard to defy.

Without collective wisdom we are all just doing trial-by-error-and-fire, and while thrilling, it can be messier and involve more risks – risks I don’t think our movement can afford at the moment.

Also, speaking as a mom, I want to know these products are not going to kids.  Prove to me my kids will be safe and I’m “with you.”

I’ll conclude with one of my favorites:

““Watch your thoughts; they become words. Watch your words; they become actions. Watch your actions; they become habit. Watch your habits; they become character. Watch your character; it becomes your destiny.” Lao Tzu

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One Response to In the New Cannabis Industry, the Consumer Must Be King

  1. Just came across your site, and really like your forward-thinking on branding and engaging the consumer. Although things have certainly changed in the year and a half since this post, not only is the R&D (almost) non-existent, the face of the marketplace is ever-changing, as people slowly “come out of the closet” about their 420 lifestyle.

    And you’re right that moms are the toughest crowd (and should be) to engage–and while it’s mostly about protecting their kids, it’s also tough to maintain a “good” reputation amongst other, perhaps, less-informed moms. What a fine line!

    It’s going to be really interesting to see how this conversation changes over time. Looking forward to working through your other articles!

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