Cannabis companies should not overlook their core constituency in an effort to draw in new consumers
Everybody’s selling cannabis but nobody seems interested in selling it to stoners.
Over the past five years, I’ve interviewed hundreds of retailers for Marijuana Venture, and many of the companies I’ve talked to seem to look at cannabis culture with disdain.
It started with everybody wanting to make the Apple Store of Cannabis. Now it’s common to hear comparisons to Sephora. There’s a ton of talk about “elevating the industry through education.” More and more, dispensaries are courting baby boomers or seniors, or they’re focused on the “wellness market,” despite being in a recreational state.
And yeah, somebody’s got to do all of that, but not everybody.
The statistics show that there is a market for these demographics, but I don’t think research has shown that they are the market.
It almost seems the latest wave of cannabis retailers were in such a rush to welcome the masses that they forgot about those people who are — or at least should be — their most reliable customers. In trying so hard to appease the stodgy investor types, have they distanced themselves from the average, everyday cannabis consumer?
They leapt for the high-end, luxury market because they could, without really figuring out whether they should. While this motif might make sense in medical states, I’m not sure it’s the right approach to lure the recreational consumer. And let’s face it, most of the medical-only states right now will probably go fully legal within the next few years anyway.
The 80/20 Rule
Cannabis companies often ignore the Pareto principle, more commonly known as the 80/20 rule, which suggests that 80% of a business’s sales come from 20% of its customers. In cannabis terms, that means 80% of weed is smoked by 20% of consumers.
To a certain degree, I understand why people wouldn’t want to market their business toward stoners. It’s not an often-romanticized archetype. At best, stoners in mainstream media fall into the loveable idiot category, but more often than not they are portrayed as unkept, semi-functioning addicts who say “whoooooaa” for comedic effect.
Breaking down these stereotypes is crucial for the future of the industry and the legalization movement. These outdated caricatures only support the myths that marijuana is highly dangerous and a grave threat to society as we know it.
But let’s not go so far as to vilify stoners or pretend that the experience of buying cannabis should feel similar to buying a Gucci handbag. I understand why cannabis companies want to reach new consumers — that’s how they can expand — but it’s important that they don’t forget their core constituency.
The fact of the matter is that there are a lot of people who fall into the stoner demographic — and come from all walks of life — and they spend a lot of money on cannabis. They spend more than the minivan-driving soccer mom and cannabis-curious baby boomers some companies seem hellbent on reaching (and yes, some stoners drive mini-vans, have children who play soccer or have AARP memberships).
And just to be clear, when I say “stoner,” I really mean anyone who feels like consuming cannabis is a significant part of their identity, a demographic that covers all ages and races.
When I flash back to my teenage years and think about some of my friends, they definitely fall into the stoner stereotypes — think Beavis and Butthead, Method Man and Red Man, Jay and Silent Bob. They would pin the monthly High Times photo spreads to their walls, save up to buy — and inevitably break — expensive bongs and spend long summer days locked on the couch playing video games. They were die-hard fans of cannabis. Every year we would take the bus from Tacoma to Seattle to attend all three days of Hempfest. They bought and smoked weed every day, wore cannabis clothing, read cannabis magazines and attended cannabis events.
While High Times is far from what it used to be, the magazine itself is empirical evidence of the size of the stoner audience. The first issue of the magazine was intended to be a single-issue parody of Playboy where the lewd photos of women were replaced with photospreads of cannabis flowers for readers to ogle. But within four years the magazine was reportedly printing 500,000 copies a month. Now, more than 40 years later, the magazine’s circulation has dwindled, but it’s outlasted print magazines that would seemingly have more populace audiences, such as Self, Life and MAD.
The same teenagers I grew up with who were reading High Times were also huge patrons of the illicit market. It’s the only game in town for a teenager.
Just to be clear, I am not advocating for companies to start marketing toward underage people. This doesn’t have to be the cigarette industry of the 1980s.
But for a lot of cannabis consumers, the legal market is not really giving them much of a reason to stop using the illicit market.
I’ve been reporting on the cannabis industry for more than five years and many cannabis professionals I’ve spoken with seem to want their businesses to be anything but pot culture. I totally get it when they’re operating in medical states, or when they’re chasing investment capital and need to appeal to investors. While I would personally love to see an investor pitch open with a bong rip and 20 minutes of Cypress Hill, I know that isn’t going to be palatable for the average investor. But appealing to stoners makes sense in the established recreational markets.
The cannabis industry has its roots in counterculture, but businesses can be both counterculture and professional. For one example, just look at Hot Topic, the retail chain that caters to the goth, emo and punk kids of North America.
While malls and retail giants like Sears are shutting their doors, Hot Topic has actually been growing. The chain currently has 676 retail stores across Canada and the United States. That’s up from 662 stores in 2014 (not the biggest jump, but we’re talking about mall retailers in 2019, so let’s be reasonable).
Hot Topic is making a killing selling Sex Pistols T-shirts and Super Mario Bros. keychains. Licensed products account for more than 75% of the merchandise sold through the company. Hot Topic does more than just lean into counterculture, it studies it and uses what it learns to better reflect the interests of its customers. I might not be part of Hot Topic’s core demographic, but when I want a Sex Pistols T-shirt, I know where to go.
And while I can’t say that every Hot Topic customer buying Jay and Silent Bob T-shirts consumes cannabis, I’m willing to bet there’s a pretty large overlap between the two groups on a Venn diagram.
Granted, cannabis stores are prohibited from taking this same approach — they can’t license Disney characters or sell Nintendo memorabilia. And nobody wants every dispensary to start looking like a Hot Topic, but there are lessons to be learned from a company that researches its customer and goes all-in on catering to that demographic.
Recreational cannabis companies might want to spend less time providing elevated, educational experiences and more time getting stoners stoned. You don’t need pop-culture merchandise — you have cannabis.
I sincerely doubt the executives at Hot Topic spend their free time playing Fortnite next to a mountain of Funko Pop Star Wars figures, but their customers do and that’s who they are marketing toward. Their personal opinions don’t come into play. And sure, a lot of stoner-centric culture can be a little lowbrow (sometimes overwhelmingly so) and the stoner caricature is often the butt of the joke, but they’re consumers too and the companies who appeal to them are going to get the last laugh.