Dispensary Customer Demographics

Dispensary Demographics – Who are your customers, and how are you marketing to them?

One of the most common difficulties with a general-interest product like cannabis is identifying, segmenting, and marketing to the specific customer profiles who frequent your dispensary.

You’ve got young millennials who just turned 21 and want to get legally baked shopping beside older professionals who want to unwind after a long day and retirees battling physical ailments with or without the addition of medically prescribed drugs—it can be difficult enough just recognizing purchasing patterns, let alone how to actively market to these unique populations.

Do we have enough data on cannabis users?

Whether or not we have enough data to accurately market to specific demographics depends on who you ask. Andre Bourque wrote an article for Forbes all about how there isn’t enough data for a proper consumer persona.

You don’t need a persona to identify trends and market accordingly, though. Because the consumer base is so large, and there are so many different data sources, it’s safe to make assumptions and test them accordingly.

Marijuana sales by age

According to Headset.io data compiled from Washington State Dispensaries who use their CRM—the overwhelming majority of cannabis sales are made by millennials at a staggering 51% of the total as of 2017. That 51% is followed by Generation X at 34% and Baby Boomers at 15%.

A report from Eaze, a cannabis delivery service operating out of the Bay Area found that Baby Boomer cannabis sales increased more than any other from 2016 to 2017.

The same study saw a 1% drop in sales to Millennials with a 14% drop in sales to generation Z.

Which demographics are buying what products?

There are different ways to market the products in your dispensary. You can market the product itself, or market a category to a specific demographic. Knowing who is buying what will help you with merchandising and positioning. If multiple generations are purchasing the same item types, then you’ll need more in stock and a broader marketing standard. If a specific demographic isn’t purchasing a product type, then you’ll want to consider what kinds of products you carry from that type.

For Example: Let’s look at the data below. Generation X purchases so few topicals they didn’t even take a 1% share of the headset.io graph we pulled this data from. Different product marketing appeals to different demographics. A millennial may go for a bespoke, flashy product package, while a baby boomer prefers something that blends into their existing medicine cabinet; that’s why these categories are important.

You want to carry a product that appeals to the demographic most likely to purchase it. Topicals are most appealing to older shoppers because they don’t have to “consume” any product, it reminds them of creams they already use, and the leap from drugstore creams to CBD creams is not a large one. You’re better off investing in topical products uniquely branded for an older demographic than topicals with flashy colors and logos that look like they were made for generation Z.

This kind of data is best used to determine unique marketing opportunities. For instance, a product that doesn’t sell well overall may be a best seller with an individual demographic. Let’s go back to the silent generation. Would you have guessed that their most purchased product type is vapor pens? Why do you think that is? Is it ease of use? Is it the disposable nature of the product?

Identifying the most valued product category to each segment can help you better train your employees as well. Your budtenders are often the first introduction new customers have to cannabis, and if they know how to direct customers who are unsure of where to start, based on demographic data, it can create a strong bond and instant trust between your customer and your budtender.

Are you pricing your products appropriately?

Another major impact on dispensary profits is their margins. Knowing how much on average, each demographic spends at a time, and how many items they leave with, can help you to price accordingly. That way you can find an appropriate balance between the product type, price, and what the largest buyers of that product are willing to pay. Let’s see who spends the most.

The results of the headset.io data are pretty fascinating. The higher the age range, the greater the percentage of products cost more; the lower the age range, the lower the price of the products. This data tells us several things. Millennials are purchasing lower quantity products and likely purchasing for quantity over quality.

The older the age range, the more likely a customer is to buy quality over quantity and lean towards more expensive product categories as well. Topicals often carry a much higher price than other product types, and this is reflected in the data with the Silent Generation making the highest percentage of purchases at 8.47% of products costing $40 or more.