Medical and wellness use driving cannabis consumption

30 December 2019 3 min. read

Medical and wellness reasons dominate cannabis consumption, according to a report from Hill+Knowlton Strategies Canada. The public relations and public affairs consultancy polled 1,000 Canadians in December, as cannabis alternatives products (edibles, beverages, oils, tinctures) are set to hit the shelves.

In October, Canada’s second round of recreational cannabis legalization arrived, with a wider round of legalization for products such as edibles and beverages, after an initial round in 2018 for dried flower products. The products are still en route to shelves as kick-starting supply chains navigate bureaucratic hoops and regulatory hurdles.

Consulting firm EY projects “Cannabis 2.0” to add as many as 3 million consumers to the cannabis marketDeloitte expects cannabis alternatives to create a $2.7 billion market, with more than half devoted to edibles ($1.6 billion) and a sizable portion to beverages ($529 million).

The recent H+K survey probed how consumers and non-consumers source, use, and view current cannabis products. A key finding was that 9 in 10 consumers now cite “medical and/or wellness” as driving all or part of their cannabis use.

Medical and wellness use driving cannabis consumption

Additionally, the survey found that the greatest opportunity to attract new users lies in non-intoxicating cannabis products. Forty-one percent of respondents who rarely consumer cannabis said they’re very or somewhat likely to try non-intoxicating cannabis in the next year (nearly twice the proportion likely to try intoxicating products).

"Our data shows that the greatest opportunity to attract cannabis curious consumers into the market is through non-intoxicating cannabis products geared towards consumers in the health and wellness space," said Elliott Gauthier, H+K's SVP of data & analytics, and research author.

The report also found that the cannabis black market remains strong, with 34% of consumers still using the channel. Price, convenience, habit, and a lack of retail infrastructure in many parts of the country likely figure into the continued popularity of the illicit market.

"This report suggests that more needs to be done to help licensed retailers and brands effectively compete with the illicit market on price and convenience," said Omar Khan, H+K's national cannabis lead. "A large proportion of regular consumers still frequent the illicit market. In order to survive and thrive, licensed brands will need to convince this cohort of consumers to migrate to the legal market."

H+K’s research also revealed an aversion around consumer packaged goods and cannabis-infused products. Thirty-seven percent of non-consumers said they would walk away from a favorite food and beverage brand it started producing cannabis-infused products. This highlights a particular risk for large brands which doesn't exist for specialized startups or challengers.