By Pat A. Pellegrini, Ph.D., President and CEO at Vividata.
In October 2018, Canada became the second country after Uruguay to legalize possession and use of recreational cannabis.
A year into legalization, here are some of the trends taking shape over the past year and how Canada’s legalization could determine cannabis laws elsewhere.
When consumers who show some interest in using cannabis were asked what had prevented them from using it, one in four said they ‘prefer a recommendation from a medical professional’1. However, of the 2.6 million Canadians that are using Cannabis for health and wellness, nearly 600,000 (or a quarter) of health and wellness users are self-prescribing and purchasing their cannabis supply through illicit market sources. In other words they did not receive a medical prescription for their use of cannabis and did not purchase products from a licensed cannabis retailer; essentially, these users are ‘off the grid’. The approximate value of these ‘off the grid’ health & wellness users is $1.1 Billion annually2.
Interestingly, among those who try cannabis for health and wellness, the top 5 reasons to do so are: positive experiences during recreational use (44 percent), preference for a ‘natural’ product (43 percent); belief that it is a safer product (39 percent); advice from a friend, relative or acquaintance (37 percent) and failure of an initial remedy, treatment or therapy (31%). Only 18% said that the reason for trying it for health and wellness was due to receiving advice from a medical professional and only 16 percent actually received a prescription from a medical professional.
Cannabis consumption impacts the use of other medicinal products. While often associated with producing the ‘munchies’, cannabis use impacts more than just the consumption of food products. Cannabis consumers report a substantial reduction in the use of pain medication and other medicines. This reported reduction is already ahead of CBD products being more firmly established in the Canadian market. However, beyond cannabis reducing or replacing other medicines, we are likely to see cannabis also used as a compliment to traditional, allopathic medicine. However, this change can only occur with buy-in from the medical industry at large.
There has been a small but significant shift in the past year with regards to sentiment on the social acceptability of cannabis, with pre-legalization figures revealing 43 percent saying it is socially acceptable, 17 percent undecided and 40 percent saying it is socially unacceptable. Post legalization, 46 percent say it is socially acceptable, 23 percent were undecided and 31 percent say that it is socially unacceptable, a decrease of 9 percentage points.
When looking at the impact of Cannabis on the consumption of other products, Vividata reports a net reduction in alcohol and cigarette use, with 19 percent consuming less alcohol due to their consumption of cannabis, and 12 percent reporting less use of cigarettes. (See slide 3)
It’s very clear from Vividata’s reports that education on Cannabis is severely lacking in Canada. A significant proportion of the Canadian population are unaware of the health properties of THC and CBD. The vast majority of Canadians do not know that there are over 120 identified compounds in cannabis (such as CBN and CBG) that medical researchers have yet to fully explore. Greater involvement from the medical industry in recommending cannabis, as well as cannabis education through media, licensed producers and retailers will greatly impact its popularity as a medical option.
While edibles have yet to be legalized, this hasn’t stopped Canadians from getting access to edible cannabis products. 42 percent of consumers already using cannabis pre-legalization of recreational use, and 26 percent of consumers using cannabis for the first time post-legalization still reported consuming edibles within the past year–likely homemade or obtained from illicit market sources. Once edibles are legalized and available through legal channels, rates of consumption among current consumers, as well as consumers trying cannabis for the first time are projected to rise exponentially. Concentrates (e.g. pills, oils) are the most popular method of consumption for new, post-legalization consumers of Cannabis for health and wellness. This is partially due to edibles not yet being legal. Based on the current illicit consumption of edibles, following Legalization 2.0, the popularity of edibles for health and wellness may well exceed that of concentrates.
The illicit market is still alive and kicking and not likely to disappear any time soon. The legal market needs to work on driving down costs, becoming more convenient and building greater trust for consumers. With the restrictions on advertising placed on brands, this will take time, an attention on the quality and safety of products in the legal market, and a lot of creativity. Product quality, convenience, variety, and price could be major factors in converting users into obtaining cannabis products through legal sources.
Pat is the President and Chief Executive Officer at Vividata, Canada’s authoritative source for insights on consumer and media behavior and the leading provider of cross platform audience measurement for publishers. A tripartite, not-for-profit organization, Vividata is governed by a board of directors representing Canadian publishers, agencies and advertisers. Last year, Pat launched Vivintel, the custom research arm of Vividata, and a series of widely renowned consumer studies on cannabis, sports & e-sports, ethnicity, trust in news, with more to come.
Prior to joining Vividata, Pat was President and Chief Research Officer at Simmons Research. Previously, Pat held senior leadership roles at GfK Custom Research North America, The Weather Network (Pelmorex), Comscore, Nielsen Audio, (formerly Arbitron), Kantar Media (formerly TNS Media), and Numeris, amongst others. Prior to leaving academic life, he was assistant professor of geography at The Ohio State University.
Sources and references:
The Canadian Cannabis Study: Use and Opinions Pre-Legalization, 2018 https://members.vividata.ca/product/vividatas-canadian-cannabis-study-report/
The Canadian Cannabis Study: Post-legalization Usage and Opinions, 2019
The Canadian Cannabis Study: How Canadians are Using Cannabis for Health & Wellness, 2019: https://members.vividata.ca/product/how-canadians-are-using-cannabis-for-health-and-wellness/
1 Source: Vividata’s Canadian Cannabis Study 2019. Base: Canadians aged 19+, Potential Users, very or somewhat likely to consume.
2 Based on the reported average spending of $150 per ‘off the grid’ user per month.
Photo by Javier Hasse. Charts by Vividata.
The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.