A new report on Cannabis consumption for Canadians by Deloitte Consultants, suggests Canadians will be looking for the good stuff and expert advice in a retailer.
The world is watching as Canada steps into the spotlight as the first G7 country to legalize recreational cannabis nationwide.
Questions that Canadians are mulling over include – What will the legal cannabis market look like? – How fast will it grow? – How will public officials balance health, safety, and revenue priorities? – And who’s going to be buying?
To find out, Deloitte surveyed current and likely recreational cannabis consumers across Canada to learn more about how consumption levels may change after legalization, what kinds of products consumers would be interested in, and how and from where they’d be inclined to purchase—in short, what consumer demand means for the cannabis industry.
A big market and a new kind of consumer
Canada’s total cannabis market is significant, potentially reaching nearly $7.2 billion by 2019—with legal sales making up more than half of that. And a new kind of consumer will be buying a good portion of that legal product: middle-aged, university-educated Canadians juggling many responsibilities and looking for the occasional toke.
Retailing fundamentals will be key
Whether they sell at bricks-and-mortar stores or online, cannabis retailers will soon discover that retailing fundamentals matter as much to them as they do to those in traditional sectors. Knowledgeable staff, clear pricing, convenience, customer experience, product choice, and product and location safety will all play a key role in their success. Those who get the essentials right could secure a strong competitive advantage.
Privacy and security are vital
Cannabis consumers worry about the privacy and security of their personal information, and they expect that information to be protected, especially online. Retailers will need to ensure they invest in robust privacy and e-commerce cybersecurity.
Liquor industry may feel an impact
Many liquor boards across Canada will play a prominent role in cannabis retailing. They may soon discover these sales may affect their traditional business line.
The legalization of recreational cannabis represents a major turning point for Canadian society. It’s also opening the doors to a dynamic, sophisticated industry that’s creating new jobs, new opportunities, and new revenues for governments while undermining the illegal cannabis trade.
Beating the thriving black market for marijuana is one of the federal government’s key goals with legalization. Over the past year, we’ve heard plenty of speculation about whether Canada’s legal cannabis industry can help Ottawa achieve that dream.
Fifty-five per cent of current cannabis users told Deloitte they expect legal cannabis to cost more. The poll suggests Canadian cannabis users would be willing to pay nine per cent more for the privilege of purchasing legally.
But Deloitte’s survey also suggests many future cannabis consumers will base their purchasing decisions on something other than retail prices: Canadians want high quality cannabis.
Deloitte asked current cannabis consumers to rank their top reasons for planning a switch to the legal market. “Better-quality products” was the number one reason, cited by 55 per cent of respondents. After legalization, Canadians are expecting the good stuff.
To see the full research doc – ‘A society in transition, an industry ready to bloom’– go to Deloitte’s website here: