Location Data About Legal Cannabis Reveals Shifts in Consumer Behavior

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Another 4/20 is upon us and as cannabis patrons prepare to celebrate, the marketing world is still trying to figure out how best to reach legal consumers of marijuana.

This space continues to evolve as states in different parts of the country consider allowing cannabis to be sold in local shops — and not just for medical needs. The folks at Foursquare released data earlier this week that the company says illustrates a few trends among legal cannabis consumers. That information is one source that could give marketers some insight on what to expect in terms of consumer behavior in states that plan to authorize recreational marijuana.

For instance, Foursquare says that in Oregon, one of the more recent states to legalize weed, foot traffic (among Foursquare app users) to liquor stores increased by just 5-10% over a 12-month stretch from 2015 to 2016. Oregon made it permissible in 2015 to partake of marijuana for recreational purposes.

Though visits to liquor stores in Oregon grew a little after pot became legal, Foursquare reports that visits grew two times faster at liquor stores across country by comparison. What Foursquare infers from its data is that liquor stores in Oregon saw smaller increases in foot traffic after recreational weed went legit in the state.

The anonymous, aggregated data was collected through Foursquare City Guide and the Foursquare Swarm app, and offered some perspective on other trends among consumers in Alaska, Colorado, Oregon and Washington — states where recreational cannabis has been legal. (In November, legislation passed in California, Massachusetts, Maine and Nevada to also allow recreational cannabis sales.)

The data from Foursquare is just one way to take a measure of legal cannabis consumers, who make up a relative new segment for marketers. Many other aspects about this niche are still being understood, says Claire Kaufmann, northwest regional director with BDS Analytics, a cannabis business intelligence firm. “There is a lot of merit in some of the preliminary insights coming out,” she says. “It is still very early to discern a lot of tangible insight from these studies.”

Data science in the cannabis industry is very young, Kaufmann says, which makes sense given the relative newness of legal marijuana among the states. Naturally as more consumers visit dispensaries and develop rapports with budtenders, the authorized sellers of cannabis, the overall dataset grows in turn, she says. “A lot of what determines a sale is not just promotion but the actual budtender,” Kaufmann says.

Unlike buying a steak or picking up a bottle of wine, consumers cannot just reach out and pluck a cannabis product off a shelf, she says. They discuss their needs with budtenders, whose job it is find a suitable match in the inventory. Medical marijuana and recreational marijuana are kept separate at dispensaries, Gilbert says, with different costs and regulations associated with each product category.

Customers with medical marijuana cards might pay 30% to 40% less — due to the elimination of taxes on that version of the product — compared with recreational users. Despite that lower cost, some cannabis buyers in Colorado, Gilbert says, forgo renewing their medical marijuana cards and willingly pay the higher prices to avoid the hassle of visiting doctors’ offices.

A few other trends about cannabis customers can be extrapolated when looking at data from sources such as Foursquare. For instance, after recreational marijuana was legalized in Oregon, the state’s nightlife did not suffer as visits to bars kept pace with nationwide averages during that 12-month period. Furthermore, Foursquare says last April 20, in states that legalized recreational marijuana, visits to cannabis dispensaries increased 76% and top fast food brands saw 20% more foot traffic on the unofficial weed holiday. The data also showed aggregate increases at nightlife spots, up eight percent overall with pubs seeing a 92% boost that week.

According to Foursquare, comparable foot traffic trends can be seen on holidays such as St. Patrick’s Day when crowds gather at Irish pubs.

New consumer patterns among cannabis users are likely to take shape, Kaufmann says, as more data sources record legal marijuana transactions. Different categories of products, such as cannabis oil and concentrates, can take share from other segments of the marijuana market. The fluid nature of the category means tracking consumer behavior will need more ways of measuring the industry. “We don’t have any interstate commerce,” Kaufmann says. “Every state has different laws on packaging, potency, and tracking. It’s a very challenging environment.”

Joao-Pierre Ruth is a Street Fight contributor.