Medical patients or recreational users of cannabis

Headset, a company specializing in cannabis data and analysis, just released its latest findings on the highest spending in the U.S. cannabis industry.

The report comes from a study conducted to compare the medical and adult cannabis markets in the country. It also covered the evolution of both industries and their sales patterns over the years. When preparing the report, Headset took into account the unifying trends within the industry.

According to greenentrepreneur, the surprising findings in the reports are rooted in the current prevailing pattern. The development of the cannabis market in the United States involves a three-step process that includes banning cannabis in a state, providing medical access to cannabis drugs, and finally legalizing recreational use of cannabis products.

Most legalized states have followed this process with very few skipping stage two to stage three. Here the regulators are either creating the medical industry at the same time as the recreational industry or foregoing medical access altogether and going straight from decriminalizing cannabis products to approving recreational marijuana products.

California, a major state in the cannabis industry, banned the use of cannabis in the 20th century but legalized the medicinal use of cannabis in 1996. It took about 20 years for the state to approve recreational cannabis use after several attempts over the long years. Headset defines this event as a predictable pattern. To shed some light on this, the slow and predictable process of cannabis legislation in California was compared to that of Illinois. Illinois had an expedited legislative process with less than seven years between licensing medical cannabis and legalizing adult marijuana.

More comparisons in the Headset report

The headset focused on medical to recreational jumping in various states in the country. It used proven predictability to paint a clearer picture of the current market pattern.

Industry experts who are also analysts have studied the report and strive to understand the structure of the market and sales of cannabis in the past while trying to better understand what is currently going on in the country.

States like New York, New Jersey, and Montana will move into phase three of the Solon, which means they will be implementing their recreational cannabis laws in a few months. The report provided by Headset can be used to forecast future sales trends in these states.

Comparing the Illinois and Michigan cannabis markets

The report reveals that the Illinois and Michigan cannabis market has been studied mainly because they recently moved from medical cannabis legislation to recreational cannabis.

If one compares the analytics of both countries, a significant increase in sales can be observed in the first months of the transition from medical to adult use. Illinois grew 226% from its recreational launch in January 2020 to the completion of the study in July 2022. The recreational program in Michigan has started a bit sluggishly compared to Illinois. Even so, total adult sales increased approximately 1077% between January 2020 and July 2021.

The Covid pandemic played a major role in the increased surge in recreational cannabis in 2020. Illinois, which happened to pass its legislation for adult use, put the state in the right place for big profits in 2020.

The approval of recreational marijuana had minimal impact on the medical cannabis market. The effects are less predictable, according to the Headset report, and will be determined by each state.

In Illinois, the medical industry saw steady sales after the onslaught of adult cannabis legislation was passed. On the flip side, the Michigan medical industry saw its medical cannabis sales surge by 75% between January 2020 and July 2021.

This year, the proportion of total cannabis sales to registered medical patients in the high states has steadily declined. Illinois announced that it hit an all-time low of 20.9% in July 2021, after seeing a steady decline throughout the first quarter of the year.

Comparing the Colorado and Oregon cannabis markets

Colorado and Oregon have two of the oldest adult cannabis markets in the United States. Both states jumped on the recreational train much earlier than the other states.

A brief examination of their sales data found that legalizing recreational cannabis does not put an end to the medicinal use of cannabis. As of early 2020, Oregon medical device sales have held 8-12% of total sales. Colorado has held up 18-20% for the past twelve months.

Purchasing behavior of medical and leisure users

Headset’s report found that medical patients are spending more money. The report was further expanded by using data showing how medical patients tend to buy more products at a time. Medical consumers buy in bulk or in basket sizes compared to recreational consumers who only buy what they need at a time.

The buying behavior of both groups can influence the market. For example, in Oregon there is an average pre-tax cart size that is made available to medical patients for approximately 90 days. This basket size is almost twice as large as for recreational consumers.

The medical market has many advantages over the recreational community. Factors like lower taxes, well-informed staff, and years of experience generating sales put the cannabis user above their recreational partner. With the increasing legalization of adult use, the medical industry shows prospects that it will remain stable.

The report also took into account the differences in consumer preferences. Medical patients gravitate towards concentrates, while recreational users tend towards edibles, pre-rolls, and vapes.

last words

Headset’s report concluded that, with the colossal growth of new adult consumption industries across the country, it wouldn’t be surprising that the medical cannabis industry would steadily decline over the next several months.

Headset suggests that only luck will ensure that the medical cannabis market holds its ten or twenty percent of the country’s total cannabis market share. Only time will tell how this will all vibrate.

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