The State of Cannabis

A Market Scan of Emerging Trends and Implications

The Big Picture

Cannabis legalization is finally here in Canada, and with it, both feelings of excitement and cautious optimism. With legalization looming, the cannabis industry has boomed up north. Consumer spending was $9.5 billion in 2017[1], and it’s projected to grow to $32 billion by 2022 and $57 billion by 2027[2]. Canadian consumers spent an estimated $5.7 billion in 2017[3] on medical and recreational cannabis.

One of the major hurdles for wider cannabis adoption has been the historical stigma surrounding it - a relic from the war on drugs of yesteryear. With that said, since cannabis has been legalized new approaches have been employed to combat the negativity and misinformation in the space. Massive growth in the medicinal and recreational industries are opening up tremendous opportunities for manufacturers, retailers, and consumers to engage with cannabis in new and exciting ways. Cannabis is no longer just for youth or ‘stoners’, it’s beginning to attract a new sophisticated arrays of customers. These new audiences and consumer groups are less familiar to the personalities of cannabis past – they represent emerging segments like the ‘chardonnay mom’, people looking to substitute alcohol, older generations, and wealthy luxury enthusiasts.

Companies can no longer only rely on cannabis only as an ingredient, but they must transform it into innovative products that are niche and with artisanal appeal.

These new audiences are looking for personalized and engaging experiences, ambient spacious stores, convenient services, and attractive high-quality products. These emergent customer expectations are opening up a huge wave of business opportunities and areas of innovation for cannabis entrepreneurs. Innovations related to these areas are likely to shape people’s behaviours and expectations around cannabis and disrupt the industry in unforeseen ways.

As forecasted by Deloitte, “smokables” will be valued around $5 billion in the Canadian market, whereas vapes, edibles, beverages, and topicals may be worth up to $22 billion.. [4]. Companies that don’t rely on cannabis as the only ingredient will be better able to find new consumer niches and innovative products with greater appeal.

Regardless of size, most organizations generally share the same concerns about regulatory laws, operations, and competition. During such uncertainty, in order to succeed and stay competitive, players must quickly act upon emergent unexpected market opportunities, and pivot as necessary.

To aid this process of orientation and navigation, we have scanned the entire cannabis market (and it's related spaces) for various signals to aid in critical decision making. As a result of this scan three mega-themes have emerged, each comprising of smaller micro-trends within them.

We have detailed these themes below and used the body of data to inform a collection of future visions, insights and opportunities for your consideration.

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01. Cannaluxe

From the intersection of luxury and sophistication with the nascent cannabis industry and its related experiences.

Discover Cannaluxe

02. Niche Cannabis

Cannabis brands recognizes customer diversity by targeting niche markets and offering products that tell a story and enable people to tell their own story.

Coming Soon

03. Craft Cannabis

A counterculture of brands that are rooted in local cultures, are socially and environmentally conscious, and provide customers with transparency on their processes and products.

Coming Soon
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