Leveraging Cannabis Consumer Data is the Key to Mainstream Acceptance
During the first years of legal cannabis in the U.S., cannabis consumer data was both scarce and heavily guarded by retailers who were unwilling to give up their competitive advantage. However, in recent years, the data environment has grown in tandem with the increasingly popular legal industry, and now even mainstream data companies like Nielsen and IRI have joined the ranks of cannabis data providers.
Thanks to the industry’s meteoric growth and coronavirus-era essential status in many states, cannabis consumers have emerged as one of the most coveted marketing segments, driving even more engagement in data collection and presentation. A rising tide lifts all boats – and data is a powerful tide that can help raise the industry to mainstream acceptance.
Data may be the ticket to legalization, too, if leveraged in a way that considers how this lucrative information can be used by mainstream companies. As cannabis data begins to resemble data from other industries, it is our responsibility as industry leaders to collectively leverage this data and allow legal cannabis to flourish and emerge as a truly established industry.
Reducing Stigma through Data
In mainstream industries, research firms use consumer data to assess demographics, measure preferences, and make predictions about the future. They publish their findings in esteemed, peer-reviewed journals, and these publications can heavily influence the development of ancillary and finance channels.
Financial institutions, businesses, and corporations read these research papers and use them to make investing and other business decisions. Imagine if a research firm purchased Enlighten cannabis consumer data off Amazon Web Services and wrote a report on the rising popularity of canna-tourism in certain states. Data that demonstrates the financial viability of canna-tourism could result in increased investment to companies providing these services.
Alternatively, consider if a research firm found and published data-based evidence that restaurants in towns with dispensaries reported higher sales than in towns without dispensaries. This type of evidence could influence where food0service establishments and retailers decide to open their business – and may generate additional mainstream employment opportunities in towns that are cannabis-friendly.
At the beginning of the legalization movement, many towns and local businesses were wary of being in close proximity to cannabis retailers, but providing tangible data about the positive economic impacts of cannabis plays a pivotal role in counteracting archaic stigma about the industry.
Access to Banking
Despite overwhelming support for the SAFE Banking Act in the House of Representatives, the Senate still has not passed this key piece of legislation which would grant cannabis businesses access to mainstream financial and banking resources.
Data could play a role in helping to advance cannabis banking reform – and institutional investment, too. Large financial institutions and institutional investors are currently barred from working with legal cannabis businesses due to the plant’s Schedule I status. However, banks and investors may become more involved with the industry and lobby Congress for pro-cannabis reforms if they have access to consumer data that shows exactly how lucrative the legal industry is.
All cannabis businesses are challenged by access to traditional banking and financing systems, but this is especially cumbersome to minority-owned businesses that might not have access to other types of financing. Allowing access to mainstream financial services can provide necessary support systems for minority-owned cannabis businesses and make the industry a more equitable space.
Data Improves the Industry as a Whole
Consider how Amazon’s consumer data algorithms can make accurate product suggestions for you after you buy a certain item, exposing you to products you might not have known existed. This could be the future of the cannabis consumer experience as more states allow online ordering and canna-businesses adjust their models to meet this demand. For consumers, this means faster, customized service and options for catered products. As retail businesses become more open to sharing industry data, they can gain better insight into customer behaviors and will drive higher margins by targeting consumers more efficiently.
The absence of accurate, verifiable information about cannabis is how anti-cannabis prohibitionists stigmatized the plant through propaganda campaigns in the first place. They were able to capitalize on public fear and spread misinformation that continues to plague cannabis and cannabis consumers today. Data and information are cannabis’ way out of the shadows and into the mainstream. Data sharing will help legitimize the industry and allow it to grow, mature and improve like any other industry.
Jeremy Jacobs is Chairman and CEO of Enlighten.