The world is in the thick of the millennial moment. This year, the cohort of Americans who were born between 1981 and 1996, otherwise known as millennials, will replace their parents, the Baby Boomers, as the country’s largest living adult generation. There are 71 million millennials in the U.S., a group that outnumbers the entire population of the U.K. or Thailand. On a global basis, these folks also will become the world’s biggest spenders at some point in 2020.
That’s going to be huge for the cannabis industry. While older Americans are flocking to cannabis to help ease the aches and pains of old age, millennials are poised to be the most important customers in this burgeoning market—especially when it comes to adult-use.
Billions of dollars will be up for grabs. The U.S. market for legal adult-use cannabis is projected to increase to $47 billion within a decade as more states legalize the drug. Around 52 percent of the 55 million cannabis users in the U.S. are millennials, and their share of the market is growing.
Spending power
Although the image of the cash-strapped millennial has become a cultural stereotype, their sheer numbers translate into huge spending power. They’re also prepared to spend what money they have on cannabis. For example, millennial cannabis consumers in California spent, on average, $179 per month on cannabis in 2017, up from $136 per month in 2016, according to statistics from cannabis delivery company Eaze. Millennials provide strong demand for the whole range of cannabis products, but they are especially keen on vaporizers, pre-rolls, and edibles.
Millennials are not just queuing up for cannabis; they also want to own a piece of the industry. Despite millennials retreating from the stock market in general since the global financial crisis, they’re flocking to buy shares in cannabis companies. In fact, cannabis stocks are so popular with this generation that the trading app Robinhood was forced to suspend new buying of Toronto-listed Aurora Cannabis last year due to the sheer volume of orders.
Given all this, it’s no surprise that an overwhelming majority of millennials support cannabis legalization. Around 62 percent of Americans believe cannabis should be legalized, according to a recent Pew Research Center survey. However, millennials are easily the most supportive cohort, with 74 percent saying cannabis should be legal.
Targeted outreach
The size of the group, their willingness to spend, and the fact they live online should make this generation a marketer’s dream. While cannabis brands mostly are prohibited from advertising on social media, they still can have a presence there through Facebook, Instagram, and Twitter accounts. Facebook recently relaxed its rules in this regard, and now displays blue or gray verification badges for companies certified as legitimate organizations or businesses. Dedicated cannabis sites such as Leafly also have listings for licensed and regulated brands, which allows dispensaries to grab the attention of local cannabis consumers.
Once you have successfully established a presence, it’s worth going on a content drive. Millennials support businesses that strive to provide information along with a product, and they are hungry for e-books, white papers, blog posts, videos, and other how-to information. This generation is 44 percent more likely to trust experts, even if they’re strangers, and 247 percent more likely to be influenced by blogs and social networking sites.
Because it’s still difficult to advertise online and have your content seen in a saturated online landscape, branding and packaging are critical to ensuring your company stands out and is considered in the decision-making process. Your brand story should be on full display across every inch of your packaging design. Millennials want to make an emotional connection and seek brands that align with their lifestyle and aspirations. It’s also ideal for companies trying to build brand equity to leverage the real estate on their packaging to lead people to social media and email lists so they can engage, market, and spread the brand story. By doing so, you’ll be maximizing opportunities to establish a connection and work toward brand loyalty.
Winning brand loyalty
Aside from branding that speaks to them, millennial customers also are looking for variety and quality. According to one study, millennials are willing to spend more on cannabis than they do on groceries, because when it comes to cannabis they want to buy the best. That means it’s important brands ensure consistent quality—no easy feat when you’re dealing with local regulations that make it almost impossible to produce exactly the same product in every region. But for this market the effort will pay off, because millennials also want to be loyal to specific brands.
To win that brand loyalty, companies must not only connect with millennials and offer them a high-quality product, but also clearly communicate their values. According to data from Forrester Research, nearly seven in ten millennials actively consider a company’s values when making a purchase. And they’re very good at sniffing out frauds. Make sure your company stands for something and is transparent about its practices and values.
At the retail level, millennials want a unique experience. They don’t want to just buy cannabis—they want memories. Retailers should make sure their shops are friendly, welcoming, and tailored to the local environment. Building trust and offering a unique environment are factors as important to millennials as price and selection.
For example, one major U.S. cannabis player is opening a chain of dispensaries that promise an environment “reminiscent of visiting the greenhouse laboratory of a 19th century botanist.” This includes botanical walls, weathered wood, and bell jars showcasing the product, as well as educational programs about topics such as cooking with cannabis and throwing CBD-infused mocktail parties. The message is that cannabis is not just a product but a whole way of life.
The prospects look good for cannabis companies that focus on their millennial customers. The size, spending power, and prevailing cultural attitudes of this generation suggest success is not a question of if, but when.
Jason Vegotsky is chief revenue officer for KushCo Holdings. An entrepreneur with an extensive background in sales and business development, he graduated from Bucknell University with a bachelor of arts in economics. He is passionate about implementing processes, improving strategy, and increasing revenue. Prior to KushCo, Vegotsky was the co-founder of Summit Innovations Inc., and the driver of the company’s business development. As CRO, leading the company’s main business unit, he leads a team of more than forty-five professionals working in sales, operations, shared services, and project management. He also is responsible for expanding the company’s physical presence nationwide in every major cannabis market.