Breaking the Grass Ceiling: Pot firms rethink strategy as young women lead cannabis use

High Tide

22/10/2024 17:01

By Mrinalika Roy and Sourasis  Bose
       Oct 22 (Reuters) - Young women are consuming more pot
than men for the first time in a historic shift in the $30
billion U.S. cannabis industry, prompting companies to revamp
products and step up investments.
    Top cannabis retailers told Reuters they've started
refocusing shelf space toward products that have proved popular
with women, including edibles, tinctures, topicals, and
beverages, in the hopes that any resulting rise in costs will
pay off in the longer term.
    "Creating new products or rebranding may seem like sunk
cost, but with women making over 80% of purchasing decisions in
the U.S., it's not just smart, it's necessary," said Lauren
Carpenter, CEO of cannabis dispensary chain Embarc.    
    Women now make up 55% of the user base on Jointly, a
cannabis product discovery app, and are even surpassing men in
spending in certain areas. In September, the average purchase
size of female buyers exceeded $91 at Housing Works Cannabis Co,
New York's first legal dispensary, compared with $89 by male
buyers. 
    Updated branding, market study and women-focused research
and development could be needed to capitalize on the growing
market potential - a "short-term impact on capex with the
long-term benefit of capturing female consumers who are not
going anywhere", said Embarc's Carpenter said.
    Women aged 19 to 30 surpassed men of the same age in
cannabis consumption for the first time in 2023, according to a
survey by the U.S. National Institute on Drug Abuse (NIDA).
    The rise could be partly attributed to medical reasons like
stress and anxiety, said NIDA director Nora Volkow, one of the
study authors.    
    Out of a dozen regular female cannabis consumers interviewed
by Reuters, the majority cited mental health concerns such as
anxiety and depression as their primary reason for usage. To be
sure, there is little evidence to suggest cannabis can help with
those issues. 
    The ongoing legalization of cannabis across more U.S. states
and growing social acceptance have also fueled the shift.
    "Women are more likely to purchase from the industry's legal
market than their male counterparts, making them practical
targets with long-term capital benefits," said Tatiyana Brooks,
co-founder of cannabis data firm GetCannaFacts.
    New York-based Tilray  TLRY.O , a retailer with a market cap
exceeding $1 billion, said it was increasing investments in its
brands favored by female patrons, such as Solei Cannabis. 
    The firm, which holds a 45% market share in the cannabis
beverage market, said its range of offerings, including its XMG
brand's lemon iced tea that is sold for around $6, has been a
big hit with women.
    Similarly, Calgary-headquartered High Tide  HITI.V  partly
credited its recent acquisition of Queen of Bud to the Canadian
brand's designed-for-women products featuring higher
concentrations of THC, the main active ingredient in cannabis.  
 
    The companies did not divulge the increased costs that this
shift may entail, as the trend remains relatively nascent.   
    A generational shift is also evident. Several retailers and
dispensary owners have reported that their younger customers, or
Gen Z, are consuming less alcohol and tobacco, and more
cannabis.
    "Businesses that take the buying power of female cannabis
consumers more seriously will stay ahead of the curve among
competitors," said Brooks from GetCannaFacts.
        

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Significantly higher number of young women have consumed
cannabis in 2023 than men    https://reut.rs/3TDAa6w
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 (Reporting by Mrinalika Roy, Sourasis Bose and Sriparna Roy in
Bengaluru; Editing by Devika Syamnath)
 ((mrinalika.roy@thomsonreuters.com;))