Millennials, Generation Z bring a fresh look to the cannabis industry
The North American Cannabis Report, released on August 1, predicts that more than $40 billion in cannabis products will be sold across North America this year. That number is expected to more than double over the next eight years, putting cannabis’ potential sales growth to over $90 billion. Millennials and their cohort generation —Gen Z, also known as the iGeneration, are anticipated to spend close to $50 billion on cannabis-related products over the next decade.
Millennials are recognized as being born between 1983-1994, and Gen Z is defined as between 1995-1999. Out of the 37 million people in the US who admit to using marijuana, roughly 24 percent of them are under the age of thirty. A recent Gallup poll found that marijuana use was most popular among adults between the ages of 18 and 30.
“Young adults, men and those with household incomes of less than $30,000 per year are most likely to say they currently smoke marijuana,” noted a recent Gallup poll. “Thirteen percent of men say they smoke pot, compared with 7 percent of women. Eighteen percent of those aged 18 to 29 and 13 percent in the lowest income bracket say they currently smoke marijuana.”
The latest consumer generation
Millennials and those in younger generations are turning all business markets on their heads, not just cannabis. Deloitte's annual millennial report surveyed more than 10,000 millennials and 1,800 Gen Z-ers from 36 countries regarding employment and consumer expectations. Results show that both generations want success to “be measured in terms of more than financial performance.” They believe corporations are responsible for having a positive impact on society and the environment, and successful businesses are expected to work toward improving people’s lives.
Millennials and Gen Z-ers alike are inspired by a more health-conscious and environmentally-friendly point of view. These kinds of shopping trends caught the attention of The Organic Trade Association a few years ago. Their survey found that at 75 million, millennials were the largest consumer group for organic products in the United States.
“The Millennial shopper puts a high premium on the healthiness and quality of the food they choose for their families," said Laura Batcha, CEO of the Organic Trade Association. "This generation has grown up eating organic, and seeing that organic label. It's not surprising that they have a greater knowledge of what it means to be organic, and consequently a greater trust of the organic label.”
A focus on health and wellness is the mark of the millennial. In a more recent survey published by Mintel, millennials are inspired to buy consumable products that are “fresh.” The words “is fresh” were found to be the number one purchase driver among millennials and Gen Z-ers looking for snacks. That simple phrase contributed to the six percent annual growth of the health and wellness food industry over the past ten years, while the conventional snack market dipped an average of two percent every year.
Millennials, Gen Z, and the cannabis industry
For younger generations of consumers, health and wellness encompass everything they put in their bodies. The organic label can go on more than just food, and more and more young people are looking for healthier ways to consume cannabis. A 2018 cannabis consumer report from The Brightfield Group found that 40 percent of millennials are willing to pay more for organic cannabis and that many of them want a different delivery method that is a healthy alternative to smoking.
The market’s biggest pot stocks are catching on to the modern demand for fresh and organic weed. The Green Organic Dutchman (TSX:TGOD) (OTCQX:TGODF) advertises the quality of their product right in the company name. And this marijuana stock just signed a $7.75 acquisition deal with HemPoland, a company recognized by its well-known Cannabigold brand of organic CBD oils. Cannabigold is already a trusted brand across the EU, and the acquisition gives TGOD access to these established markets in 13 countries. The company also added 32,000 kilograms of organic flower to their production.
Tilray (NASDAQ:TLRY) is another marijuana stock exploding into the market and cashing in on this health-conscious consumer generation. Over this past year, Tilray and EnWave Corporation (TSXV:ENW) maintained a supply agreement for dehydration equipment. Tilray’s facility in Portugal is the latest to receive a commercial license to use EnWave’s Radiant Energy Vaccuum technology to process cannabis. The REV technology is ideal for cannabis because it drys and decontaminates the flower uniformly, guaranteeing the safety and the quality of the product.
The expectation for healthier, higher-quality products puts the cannabis industry in a unique position to cash in on these consumers. As cannabis evolves past the age of prohibition and works to change the world’s point of view, there is a branding opportunity there that is very important to this generation of marijuana users. Millennials and the iGeneration want to work for and shop from businesses that look at the bigger picture, and changes like these could be an opportunity for cannabis industry leaders to fulfill a void in this younger generation.