Is Legal Cannabis a Bigger Threat to Retailers than Amazon?

Chicago, IL: Cannabiz Consumer Group announces completion of its second annual CannaUse™ study, the largest research assessment ever conducted on cannabis attitudes and spending, with more than 50,000 US adults participating for second year in a row. The October 2017 study reveals that more than half of the U.S. adult population has consumed cannabis at some point in their lives, and that in the well-established recreational markets of Colorado, Washington, and Oregon, roughly one third of adults legally purchased cannabis during the past year.

The company projects that nearly 100 million U.S. adults would consider using cannabis if it were legal for them to do so in their home state.  Those partaking defy traditional stereotypes, transcending generational groups and socioeconomic status.  This places traditional brick-and-mortar retailers, especially drug, grocery, convenience, and liquor stores, at risk of revenue loss as consumers’ discretionary spending shifts.

Rick Maturo, co-Founder of Cannabiz Consumer Group states, “Wall Street analysts are beginning to consider the growing reach of cannabis as they provide guidance on publicly traded consumer packaged goods to manufacturers and retailers.  Retailers should view this threat as being as real as that posed by Amazon. If they don’t, they may find themselves with limited product leverage as tens of millions of consumers migrate some of their purchasing away from CPG on their shelves in favor of cannabis.  Unfortunately when this occurs there is no easy resolution. To respond to Amazon, retailers can ramp-up e-commerce, delivery, and pick-up services, but with cannabis the response more challenging since under current laws they cannot sell the product.”

Research shows that as cannabis enters a consumer’s product mix they begin to shift some volume away from more traditional consumer packaged goods categories and brands.  The result is that for certain products in Alcoholic Beverages, OTC, and Pharma the impact of legalized cannabis on retail sales can be larger than that caused by Amazon. C2G data show that for key categories in alcoholic beverages, OTC medications, and Pharma cannabis is impacting sales by double-digit levels.  While the impact on retailers across the entire store may not be as significant as that posed by Amazon, retailers such as Kroger, CVS, Walmart, Costco, and Whole Foods who offer a broad array of products in cannabis- competitive categories have the greatest risk associated with partial or significant cannabis replacement.

About Cannabiz Consumer Group

Cannabiz Consumer Group investigates marijuana legalization and its impact on consumer spending throughout the economy.  Bringing together a diverse information set and a team with expertise in the tracking of emerging markets, data modeling, and analytics, Cannabiz Consumer Group provides insights and solutions for specific industries that must adapt to cannabis legalization.  This includes over-the-counter medications, beer, wine, spirits, tobacco, other foods and beverages, retail, pharmaceuticals, healthcare and travel/tourism.  Each will be impacted by consumer spending on cannabis as existing legal use markets continue to evolve and new markets launch.

For more information on the study, contact [email protected].