Pets, Pain & CBD: The Many Applications of Cannabinoids Products Webinar

Our “Pets, Pain & CBD: The Many Applications of Cannabinoids Products” webinar, which took place on August 22, 2019, was hosted by Kate Senzamici, Regional Business Development Manager – Northeast.


Watch the webinar or review the presentation to learn about our views on the evolving role of cannabis in pain management, as well as the emerging role of cannabinoids in the pet channel – in the context of the overall U.S. cannabis market.



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Video Transcription


Liz Stahura:


Hello everyone and thank you so much for joining the BDS Analytics Pet, Pain, and CBD webinar today. Excited to have you join us as we explore some great trends within the industry. My name is Liz Stahura. I am the president and co-founder here at BDS Analytics. We of course are your experts on the global cannabinoid market and consumer trends.


Today we’re going to be exploring the ways that cannabis and in particular CBD impacts and is impacting the booming self-care, wellness, and health markets and of course because our pets are part of the family too. We’re going to be paying special attention to the growing intersection between cannabis and pet care. We are very excited to share our latest research and insights with you and I would like to introduce to you our presenter for today, BDS Analytics industry expert, Kate Senzamici. Kate’s professional background has been focused on market research with a particular emphasis on retail, health, and wellness and more recently throughout her career here with BDS Analytics she’s really been focusing on the impact of the cannabis market. So she’s got extensive experience in both retail and consumer trend analysis and we’re really lucky to have her here with us today sharing her insights and the latest research and data on these things. Before I hand the mic over to Kate, just a couple housekeeping items to cover off on.


Kate Senzamici:


Thank you Liz. And thanks everyone on the line for joining our webinar around Pets, Pain and CBD. So we are going to be exploring these topics through a few different angles across legal cannabis.



So just to give an overview of that here, we know of course that legal cannabis is growing, it is relevant across consumer trends. Legal cannabis now includes hemp-derived CBD and other cannabinoids. It’s driven by the dispensary channel and most importantly it is constantly evolving.


Legal Cannabis is growing


So first we’re going to take a quick look at kind of the state of the industry right now. Just a few slides to go the lay of the land. Before we get into that, I’ll quickly point out that we’re going to talk through a lot of information today. You’ll see a lot of numbers, a lot of data, and our data comes from two main proprietary sources.


So we track what is selling on the market through the regulated dispensary channel. To do this, we partner with retailers, we compile clean, code, organize, aggregate and project transactional point of sale data, up to total state market levels. And all of this serves to tell you what consumers are buying across categories, brands, products, across different attributes within each of those. And so when you look at the purchase data, we’re getting part of the story. But with that, our consumer insights work comes in really handy to answer questions about who the cannabis consumer is, why they’re consuming, also who is not consuming and why you’re not consuming. And so our consumer work takes place twice per year using a quantitative research methodology covering the entire US, all of Canada. So we’re going to look at both of those data sources today to get a glimpse into what is happening in cannabis today across Pets, Pain, CBD and what it all means moving forward.


80% of US adults agree with legalizing cannabis


So with that, at this point, we know that this tide is really shifting in terms of public sentiment. It’s generally accepted about 80% of US adults agree that marijuana should be legal in at least some form, whether that’s medical-only or fully at the adult youth level with legal and regulated sales. And well over half of US adults, 21+ agree that marijuana has medical benefits and this percentage shoots up closer to 90% if you look at adults in medically legal or adult-use States. And I should point out that was in our consumer research, we’re able to segment our sample into three different categories, consumers, acceptors and rejectors. So consumers or those who have consumed cannabis in the past six months. Acceptors are those who have not consumed in the past six months but are open to doing so in the future. And then rejectors being those who have not consumed in the past six months and are not necessarily open to doing so in the future.


So with that, over our task three waves of consumer research as the tide is shifting in public sentiment, more mainstream acceptance is happening around cannabis we’ve seen the percentage of marijuana consumers increase a percentage of acceptors and rejectors decreased.


coast to coast cannabis legalization in the US


So with this increased mainstream acceptance of cannabis on an attitudinal level, of course, we’re also seeing great expansion and growth of cannabis markets here in the US. We now have coast to coast legalization. It’s no longer a Western state phenomenon with Massachusetts where I live, our adult-use retail market is up and running slowly but surely just to the North. We have Maine finally starting to roll out their adult-use programs. They should have their retail applications ready to roll out in January, 2020 and then, of course, you also have Michigan, Illinois coming on as adult-use States as well. And by 2024, 15 adult-use markets in the US will surpass one billion in annual spending. And this momentum is only going to build.


$41 billion worldwide cannabis market by 2024


So if we zoom out and look at a global level looking at the legal cannabis market on a global level, we’re projecting a $41 billion worldwide market by 2024. These numbers do not include hemp-derived CBD. They’re referring to the legal regulated marijuana market. And with that, I’ll pause just to point out that as we talked about hemp-derived CBD and CBD from marijuana throughout this presentation, marijuana and hemp-derived from the same botanical parent plant, but marijuana contains higher levels of THC. So when we talk about CBD, regardless of where it’s derived from, CBD is the same compound with a CBD from hemp containing less than 0.3% THC and THC and CBD are just two of the many cannabinoids chemical compounds found in the cannabis plant was the belief that potentially hundreds exist. So looking at this chart here, looking at the purple bars, we can see that the US is driving and will continue to drive the global cannabis market well into the next five years.


And it’s actually really interesting that if you rank all of the US States with countries on a global scale, California is actually the largest global market. Our team of analysts just published a new California report this week and California’s projected five-year compound annual growth rate is 19% putting the size of the market and California legal market at 7.2 billion in 2024. And that’s 40% bigger than the number two global market, which is Canada and 253% bigger than the next largest global market, which is Colorado. And in fact most of the top 20 global markets are actually US States. But the numbers don’t necessarily top out there because when you add hemp-derived CBD to the equation, we project a 45 billion US total cannabinoid market.


45 billion US total cannabinoid market


So this is looking across the legal dispensary channel and general retail, and we’re seeing a, for now, most of that $45 billion market in 2024 will come from the THC cannabinoids in licensed dispensaries. But on top of that, there’s also more than five billion coming from other cannabinoid products at the dispensary level. And then we have more than 14 billion coming from a general retail and pharmaceutical CBD.


Legal Cannabis across consumer trends


So quickly of the land there. And now we will dive into kind of legal cannabis across consumer trends. So to understand the context of cannabis with regards to the topics we’re discussing today, pet and pain care, I just want to briefly zoom out to kind of set the stage across the consumer trends piece. And one of the really fascinating aspects of cannabis in the industry is that it’s so relevant across retail channels and really across all of the consumer trends that are manifesting at general retail. So first I’ll look at the wellness market. We all know the wellness market is booming.


The cannabis wellness market is booming


There’s been a huge emphasis on general wellness in the past five years, whether that fresh foods buying local, organic, natural sustainability, all of those buzz words and consumer mindsets and their approach to health has really shifted from a reactive sick care approach to a more proactive, more holistic, more preventative based self-care approach. And this is partly driven by the rising costs of and the rising barriers to health care. The US spent $3.5 trillion on healthcare in 2017, is on track to spend $6 trillion in healthcare by 2027 and put that in perspective if US healthcare spending were a nation, it would have the fifth largest GDP in the world. So with these rising healthcare costs, more money spent out of pocket, increasing prescription drugs prices, people don’t want to get sick and they now have access to more information than ever.


So, with that, our partners at IRI has sized the self-care market at about $450 billion with roughly 90% of US consumers practicing some form of self-care. So we’re certainly seeing this manifest in food products with more products pouting these better for you attributes. So looking over on the right-hand side of the screen here, we have different, better for you attributes non-GMO, non-dairy, vegan food products with those attributes growing up their dollar sales pretty significantly between 2018 and 2017 but it’s not just about food. Self-care really blurs category lines, just like cannabis really blurs category lines and these sorts of free-from and better-for-you attributes, and messaging are present across HBC, health and beauty care, household products and more.


Wellness plays a big role for dispensaries


And so obviously within the general market we see retailers following suit, and this is evident in everything from the products that you see on the shelves across food, drug, mass retail to retailers messaging to their consumers, to the services that they provide, lots of retailers expanding their health services, their wellness services, and even in their overall store design. So for example, we’re seeing drug retailers like CVS in the past two years, really revamping their store designs. CVS in particular recently has rolled out or started to roll out these health hubs stores, which will have expanded health services, kind of aimed at that self-care preventive proactive approach, and also more health and wellness products on their shelves. So really with the goal of making the store a true self-care and health care destination. We have Kohl’s partnering with Weight Watchers, instilling theories of initiatives that are rewarding shoppers making healthy lifestyle decisions.


Also, with some Weight Watchers branded products that Kohls. Kroger in the lower-left here doing some education around skincare for some are seeing a lot of self-care and wellness education from retailers. And then even Walmart getting into the game here. They launched I think last year a new a store brand of beauty and personal care products called Found that are formulated using more natural plant-based products, fewer ingredients and more affordable price point as well. But wellness and self-care are a major theme at the dispensary level as well, across retailers and manufacturers with cannabis products positions not only around serious or chronic health conditions but also general wellness. So we have Wana sponsoring athletes for performance enhancement and recovery enhancements. Curio, a dispensary in Maryland has a spa and holistic herbal pharmacy associated with it. And then, of course, many dispensaries from any dispensary’s kind of the name says it all. You’ll see a lot of dispensary’s with kind of wellness-themed names, really establishing themselves as a self-care, health and wellness location.


The pet market is booming


And so, as wellness and self-care are taking off, the pet market is booming as well. The US pet industry’s expected to exceed 75 billion this year and that’s growing 30% over the past five years between 2014 and 2019. Right now almost 90 million households own pets and this was well over half of younger generations versus about a third of boomer population. So yes, more people owning pets means increased spending. But there are other trends at play here too in that tests are becoming more valued part of the American households, certainly more pampered.


Pet trends in general retail in 2019


With that, a lot of these trends that we’re seeing at the consumer level are starting to show up in pet stores and in pet products. So things like natural and organic, seeing a lot more pet food, brands launch natural pet foods with fewer ingredients or even here towards specific diets like grain-free or more premium food products.


Also, a lot going on with seasonal at pet stores. I think my local PetSmart already has a huge assortment of how we themed pet products. Definitely, wellness, in general, we’re seeing subscription plans pop up, very popular at the human consumer level with things like Birchbox and FabFitFun. We have BarkBox subscription services for pets, and then also a just expanded services at pet stores in general. So moving beyond simple grooming or nail clipping to a dog training, pet adoptions, pet sitting expanded pet care. We even have online retailers like posting pretty extensive blog posts around different ways to kind of celebrate your pet in your life. This one in the upper right-hand corner, I think that’s a serious blog post about how to throw a dog breed reveal party. So just as DNA tests are becoming really popular at the human level with things like 23andMe, you can also get a DNA test for your rescue dog that is a mishmash of breeds and chewy here in this blog post is describing how to take those results and throw a dog breed reveal party for your pet.


Legal Cannabis is now Hemp-derived CBD


So all of this really serves to set the stage around why CBD plays such a relevant role in these two areas, especially now that legal cannabis includes hemp-derived CBD among other cannabinoids. And we know that 2018 was a milestone year for CBD with the passage of the farm bill, which only provides for hemp-derived CBD and nonfood products. So there’s still a lot of work, a lot to be seen in terms of what the FDA will establish in terms of a more concrete regulatory framework. And there’s still definitely some lack of clarity around certain aspects of legality when it comes to hemp-derived CBD.


health and wellness benefits of cannabis


But again, it should be understood that since CBD does not necessarily equal hemp, the health and wellness benefits of cannabis and CBD are not a hemp driven phenomenon. The benefits are driven by the cannabis plant as a whole, and as such marijuana consumption, itself is multifaceted.


So when we look at consumers in legal adult-use States just over 7 and 10 say that they consume cannabis for recreational or social use, over half are consuming for health or medical use. But in fact, one-third of consumers in adult-use States report using cannabis for both recreational and medical reasons with very different needs states, use occasions and consumption methods varying by motivation, so really consuming for different reasons based on the outcome they’re looking for from the product. And this can change daily, weekly, monthly. So for example, someone might consume a marijuana product while socializing with friends on a Friday or maybe a high CBD or CBD only tincture during the week to help with sleep. So really different use cases and need States that can be combined into a single day or like I said, changing daily, weekly over the course of a month.


60% of past six months cannabis consumers are pain management consumers


So if we break down consumers further, we can see that solid majority of cannabis consumers in legal, medical, and adult-use States do consume cannabis to manage pain. About 60% of past six months cannabis consumers are pain management consumers. But going back to that previous slide, there are many other reasons that consumers use cannabis, but across all of those use cases, pain is relevant for 60% of consumers. And even among pain management consumers, cannabis use is multifaceted, so close to 70% of pain management consumers also consume for recreational or social purposes, about 40% for general quality of life. So just reinforcing that notion of cannabis use as multipurpose, multifaceted even within particular segments of consumers. Moving over to the right-hand side of the screen, if we look specifically at hemp-derived CBD versus legal marijuana, we can see that the motivations for youth are the same. Just prioritize a bit differently.


So a study from our partners at IRI conducted in conjunction with Mfour shows that consumption of CBD products is primarily medically motivated and in general overall, our consumer data shows that 51% of US consumers consider cannabis their medicine. So certainly, those health and medical motivations are a well-established part of cannabis use.


hemp-derived CBD for pain relief


And if we double click on hemp-derived CBD, consumers here report using CBD for a variety of both physical and mental health and wellness issues. But number one is pain relief and pain relief is really the number one motivation by far at 32%. 32% of hemp-derived CBD consumers say that they consume CBD to relieve pain. The next closest is sleep at 10%. And so through our consumer insights research, we know that consumers are turning to CBD for a more natural treatment for a variety of conditions even just as part their general wellness routine. So without that intoxicating effect like THC, CBD doesn’t really have that recreational social component and really is more wellness-oriented.


Overall throughout among the total us population, consumption of hemp-derived CBD product still is relatively low, about 15% despite its mega-trend status. But it’s important to note that when we focus on adults in fully legal States, the figure jumps up to just under 40%.


cannabinoids to find relief from pain


And when it comes to cannabinoids and pain, we see consumers using cannabinoids not only to find relief from pain itself but also to find relief from more traditional forms of pain treatment. So when we look at pain management, consumers versus non-pain management consumers, the pain management consumers are much more likely to have decreased their over the counter or prescription medication use as a result of using cannabis to treat pain. So more than half of pain management consumers say they’ve decreased their OTC medication use close to half of pain management consumers have decreased their prescription drug use. But there are also significant proportions of pain management consumers who are using cannabis specifically to avoid prescription drug and OTC.


So not only is a reduction in these forms of pain treatment, a byproduct of use, it’s also kind of an intended motivation of using cannabis to treat pain. And in general, cannabis consumers are less likely then acceptors and rejectors to use over the counter pain meds. About 57% of cannabis consumers overall in the past six months have used over the counter medications versus more than 60% each of acceptors and rejectors. So specifically with pain, but across cannabis consumption in general, we’re certainly seeing cannabis use impact other product categories or retail channels outside of cannabis. And we’ll touch more on this a bit later.


CBD pet products 2019


So clearly cannabinoid product playing a significant role in pain relief and health and wellness for human consumers. And given the way we think about and care for our pets today in the consumer trends that have crossed into the pet channel, it’s no surprise that CBD is emerging here as well.


So far it’s a small proportion. About 7% of adults, 21 plus in the US have purchased hemp-derived CBD pet products in the past six months, and the majority of that 7% more than three quarters are adults who have consumed cannabis sometime within the past two years. But our industry intelligence data is showing that pet products are within the top five, most popular CBD products on the US market in 2018 with about 64 million in sales. That’s also on that list or at the top of the list are ingestibles, topicals, inhalables and then pet products and pharmaceuticals. In terms of CBD, hemp-derived CBD products with the most sales. And purchasers of these hemp-derived CBD pet products are feeling pretty confident when it comes to the safety of using these products on their pets. About 80% say that they feel these products are safe to use on their pets without the guidance of a health care professional.


And when we look at the motivations for purchasing CBD pet products, really the same primary motivations as with human use, but prioritize a little bit differently. So a broader focus on managing general health problems, general quality of life with pain specifically not the number one priority, but still there’s that motivation to avoid prescription drugs even when it comes to pets.


CBD sales share in the USA


With that, let’s take a closer look at how CBD is performing at retail. So this slide here is showing total legal cannabis spending through 2018 at the dispensary channel level, and we can see that CBD share within the dispensary channel has grown from 2% to 11% just between 2014 and 2018 and we expect that market share to be closer to 20% in the next year or so.


We also expect total CBD sales within the dispensary channel to almost double this year versus 2018 reaching about 2.1 billion in 2019 was close to five and a half billion projected for 2024. So CBD is definitely a growing part of the product assortment at the dispensary level. For example, if we look at edibles, almost one-quarter of edibles products on the markets or within the markets that we track contain CBD and high CBD edibles products have grown about 36% in Q2 2019 versus the same time last year. And then in general, really all of the edibles brands we track have at least one high CBD skew in their product portfolio right now.


CBD growth is coming from edibles and topicals in 2019


So cross that total CBD marketplace here. This includes general retail, food, drug, mass channels, including dispensaries as well. The growth is coming from edibles, largely driven by the dispensary channels, as well as topicals, with pet products making up a smaller proportion of that projected $20 billion market for 2024. Overall, our team of analysts forecasts CBD sales to grow more than 50% from 2018 to 2024, again, reaching that $20 billion total market, and sales of hemp-derived CBD at US general retail is expected to make up about close to 13 billion of that total $20 billion market.


OTC, RX medications are being replaced by Cannabis and CBDs


So as we saw a few slides back, many consumers are using CBD for themselves and for their pets to avoid prescription drugs. So as we think about CBD’s impact on other consumer categories, it’s not surprising that prescription medications, over the counter medications, are the first to go. On the left-hand side of the screen here we have some results from a dispensary exit survey conducted by our partners at IRI in conjunction with Mfour showing that almost half of dispensary shoppers surveyed said that their purchases at the dispensary were replacing over the counter medications. More than a third said that their dispensary purchases were replacing prescription drugs.


So obviously, for legal cannabis and for hemp-derived CBD, it’s really important to understand that today and in the foreseeable future, these purchases at the dispensary channel are really dominating CBD products sales today, and the importance of this channel can’t be ignored.


So if we break down the total US CBD market here, looking at our projections for 2019, when all is said and done, we’re projecting a 4.1 billion CBD markets. If we break that down by retail channels, just over half of that will be coming from the dispensary channel.


Looking ahead to 2024, the market share will look a little bit more like dispensary channel at 26%, e-commerce around 18%, pharma at 11%, and of course this will be influenced by how the further FDA regulations shake out in terms of hemp-derived CBD.


In regards to the pet store and vet channel, you can see here for 2019 it’s about 1% of the total US CBD marketplace. Looking ahead to 2024, we’ll still be at about 1%, so it’s still a small part, but it’ll be growing more than 600% to a $215 million opportunity.


CBD at the dispensary channel


So with that, let’s take a closer look at the dispensary channel. We expect the growth of CBD to positively impact dispensary sales, and the dispensary channel is really the leading indicator of how this category is going to manifest at general retail.


Dispensary channel CBD product market share 2019


So definitely important to pay attention to the dispensary channel. Even thinking about the performance of hemp-derived CBD on the general market. We saw earlier that high CBD products are making up more than 10% of dispensary sales, dispensary channel sales in 2018. This is up from 5% in 2017, and within that, about half is coming from ingestibles, which includes sublinguals and tinctures, about a third at the dispensary level from inhalables, 14% from topicals, and really dispensary shopper behavior, so those shoppers that are already getting their CBD products from dispensaries, their behavior might not change that much with greater access to CBD in general retail, as some consumers really value the concept of the entourage effect. So the idea that CBD and cannabinoids, in general, are really most effective when consumed in conjunction with other cannabinoids. So CBD having more of the therapeutic benefits or really realizing the full potential of its therapeutic benefits when consumed in conjunction with THC.



But we do see dispensary sales trends reflected across other channels, and often the high CBD products that we’re seeing at dispensaries are the first to emerge on the general market. So in a more granular category level, various types of topicals. Tinctures have long been prevalent at the dispensary channel, including CBD. So you can see here looking at balms and creams, really the vast majority of those products on the market at the dispensary level do contain CBD. More than 70% of tincture products at the dispensary level do contain CBD. So really the dispensary channel is not just about high THC intoxicating products. So it’s really important to understand that legal cannabis is not just about hemp-derived CBD, but also CBD from marijuana and products that are containing CBD and THC as well.


CBD now has wide product assortments


So we know that options for consumers when it comes to CBD, when it comes to hemp-derived CBD, now are existing in many different forms, much wider product assortments, wider availability across retail outlets. So we’re seeing different forms of supplements, whether that’s in gels, soft gels or gummies, different forms of topicals, different types of tinctures, ingestibles, beverages, all kind of geared at different ailments, different need states. And when it comes to the pet category, really most CBD pet products on the market so far are in the tincture form or edible treat form. Obviously now CBD really largely available across all general market retail channels, supermarket, mass, chain drug, specialty beauty, even apparel. You can get CBD at coffee shops, doctor’s offices, chiropractors. In the case of pets at vet clinics. So consumers have a much wider array of options. They have a lot more available to them in terms of where they decide to purchase CBD.


CBD pet product growth in 2019


Looking back at pets specifically, like I said earlier, it’s important to understand that CBD is not a hemp driven phenomenon, and this is actually relevant to pet products as well. So if we look at the top 20 pet products in dollar sales at the dispensary channel in Q2 2019, actually 35% of those top 20 pet products at dispensaries do contain some THC. Obviously, this is a very high CBD and very minimal THC ratio. I mentioned the entourage effect before. So this is definitely at play here, but you will see products that have a 20 to 1 CBD to THC ratio. So not a hemp driven phenomenon at the pet products level either.


So far, at the dispensary level for cannabinoid pet products, we’re seeing about 20 million in sales to date, about 5 million in sales in 2019 year to date through June. That’s a 17% increase between Q2 2018 and Q2 2019, and we have about 38 brands on the market right now, 30 pet brands on the market at the dispensary level.


adult-use channel is driving pet sales for CBDs


So if we look at a market like Colorado, we can see when it comes to pet products, you can see that the adult-use channel is really driving total pet sales at the dispensary level. This really mirrors the overall trend that we see in legal markets overall. As the degree of legalization increases, adult-use channels to tend to drive the total market vs medical channels.


pet category dollar sales for CBDs


So we can see that happening here when it comes to pet category dollar sales, but just as medical markets, certainly can thrive on their own without the presence of an adult-use market, the same can be said for the pet category at dispensaries and medical markets like Arizona here where pet products have grown 600% from the beginning of 2017 through June of 2019.


CBD becomes more mainstream in 2019


But overall, as CBD becomes more mainstream and has this increased presence in the general market, we’re starting to see more dispensary brands cross into mainstream retail and to food, drug, mass channels, which is another reason why it’s really important to be aware of the dispensary channel and understand brand and product performance at this level, especially in medical or adult-use States. If consumers are choosing to purchase hemp or marijuana-derived CBD products from the legal dispensary channel, that, of course, is going to impact their trips to general retails. So we know that pain management consumers are using cannabinoid products specifically to cut back or avoid altogether over the counter or prescription medications. So as they reduce their reliance on those categories or even cut out those categories altogether, think of how that impacts their trips to general retail. If someone is cutting a prescription medication out of their routine, that could completely eliminate a monthly trip to a drug retailer. So we know that when it comes to trips to CVS or Walgreens or Rite Aid, they’re really, number one, primarily driven by a prescription, by a pharmacy need, whether that’s filling a prescription, dropping off a prescription. So if those trips are no longer necessary, are no longer as frequent, that definitely impacts shopping at general retail overall or at these outlets overall. Or even cutting back on over the counter medication purchases.


Even though those trips to drug may still be taking place, the reduced need for OTC medication does eliminate or could eliminate a trip down that aisle within the broader drug trip. So definitely impacting ancillary categories or adjacent categories.


So here we have an example from, on the left-hand side, from a Colorado Walgreens. Walgreens is selling CBD products in nine states right now, including Colorado obviously. So two of the eight SKUs in Colorado Walgreens are Select, and Select Oil is actually the number one brand in dispensaries in the US driven by their vape products. So we’re seeing that brand cross over from the dispensary channel into general retail. CVS as well, selling CBD in nine states. They have a select online SKU on their online assortments. They are selling Charlotte’s Web. Also, have four SKUs there available online, and we also know that CVS has the distribution deal with Pure Leaf, which we all know is a huge, one of the biggest multi-state operators spanning 12 states, 48 dispensaries. So another kind of dispensary brand here, really crossing over into mainstream retail.


There's still a lot of room for CBD education


And probably most importantly to note there’s still a lot of room for education when it comes to CBD. So can’t wrap things up without pointing out this important fact. Though we’ve seen some improvement on these measures, still well over half of US adults either don’t know or answered incorrectly when asked about the differences in the effects between CBD and THC, or when we asked them about the effects of hemp-derived CBD in particular, more than half of consumers are answering incorrectly or they don’t know. Although awareness is definitely improving, but what all this means basically is that there’s a lot of opportunity as a retailer or a manufacturer to really become a trusted advisor here across pain products, across pet products, kind of guiding consumers who are new to or curious about CBD products. Definitely, something to keep in mind when it comes to branding, packaging, consumer-facing communication, social media, really being mindful that as cannabis continues to move into the mainstream, there’s a much wider audience out there than that experienced core consumer.


consumers want to trust the CBD products they're using


So on that topic of trust, being a trusted advisor, this is really what it boils down to for consumers. Consumers want to trust the products they are using. They want to trust the brands that they are giving their loyalty to, they want to trust the experience overall. Whether that’s trust based on familiarity and past experience with a product, or trust in terms of the source of recommendation coming from family and friends or coming from budtenders, consumers are strongly influenced by trust in some form. This applies of course also to recommendations from doctors and vets. The percentages we’re seeing here, this is among existing consumers in adult-use states, so you have to imagine that for newer consumers or for that segments, recommendations from trusted sources would carry even more weight. So kind of a really important piece to keep in mind, that education and trust piece is really the foundation of everything that we’re talking about.


Legal cannabis is a game-changer


So, we know that across all kind of topics that we can explore from a legal cannabis perspective, overall, legal cannabis is a game-changer, and, most importantly, while legal cannabis is new, cannabis itself is not. So a few takeaways, we know that use of cannabis among pain management consumers is multipurpose, multifaceted, hemp-derived CBD use, definitely more pain or health-related. Cannabinoid pet products are not just about CBD. The category is a small but growing part of the total CBD and dispensary markets. Also across both human and pet consumption, CBD cannabinoid products in general are being used specifically to avoid or reduce over the counter and prescription drug medication. So the rise of CBD will impact general market categories. It will shift the nature of those trips to general market retail, but still CBD at general retail is definitely poised for growth, but it also remains to be seen how the FDA is going to act around more regulations for CBD, especially in terms of its use, the use of hemp-derived CBD in food and beverage products.


For now, the dispensary channel is definitely the largest retail channel for cannabinoid-infused products today. It will remain so for the next five or so years and beyond, but really the dispensary channel is really important to keep an eye on because it can provide us with the most clues around what is to come across general retail channels. Then, of course, education is needed. Still a lot of confusion out there. Still a lot of opportunities to educate consumers both new and old to the category around hemp-derived CBD and all of the variations of cannabis and cannabinoids in general.


cannabis is a new game


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