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CBD Usage by Demographics

By admin_45 in Blog CBD Usage by Demographics

“Consumer CBD sales are expected to reach $20 billion by 2024 — larger than the current annual sales of candy, gum and mints combined.” That’s according to sales and marketing agency Acosta on the non-psychoactive compound in the cannabis plant (full name Cannabidiol, shortened to CBD). It’s supposed to have many therapeutic benefits, from treating insomnia, depression and anxiety to pain, inflammation and seizures, but who actually uses it?

Acosta recently ran a survey that provides some of the first real insight we’ve seen on CBD customers:

  • Demographics: The survey found that the key CBD demographics are millennials, men and those with 4-year degrees.

    Forty-eight percent of male survey respondents said they use CBD daily or as-needed versus 28% of female participants. Almost half (49%) of respondents with a bachelor’s degree also said they do so, more than any other education level.
  • Frequency of use: Over a quarter (28%) of consumers in the survey use CBD products every day (9%) or as-needed (19%).
  • Use by age cohort: Over half (56%) of millennial respondents use CBD daily or as-needed, versus almost a third (32%) of Gen X and 15% of Baby Boomers.
  • Reasons for usage: “Pain, mental health and general wellness are key reasons for usage, with specific health ailments varying from generation to generation.”

    Millennial survey takers mostly use CBD products for anxiety (31%) and general wellness (30%). Gen X and Baby Boomers use CBD to help with joint pain (31% and 36%, respectively) and muscle pain (23% each).
  • Consumer perceptions and challenges: 55% of consumers said “CBD oil is/might be a new miracle treatment”, 35% said “I’m not sure what to think of CBD oil”, and 11% said “CBD oil is just hype”.

    Non-users open to trying the compound said price (25%), lack of studies (18%) and distrust in claims (14%) were the “biggest barriers for usage”.
  • Types of purchase: 59% of survey users said their first purchase of CBD was planned, 25% said it was an impulse purchase and 7% said their doctor recommended it.
  • Popularity among pet owners: One in ten pet owner respondents said they purchased CBD products for their pets, 52% of which “made the purchase based on a recommendation from their vet”. Their top reasons for usage included pain (29%), anxiety (32%) and general wellness (29%).

    The “top pet CBD products include treats/chews (48%), oil (27%), capsules (14%) and topical ointment (9%).”

As for what we make of all this data, three points:

#1) CBD is a new industry given that the compound was only just legalized in the 2018 Farm Bill that passed in December of last year. Even though CBD is technically legal, the FDA is still working on how they are going to regulate the compound particularly when it comes to food and drinks. That’s why you may see creams and beauty products sold at your local grocery or health and wellness stores, but don’t see a company like Mondelez or Coca-Cola yet launching food or drink products despite their expressed interest in doing so.

Consequently, we understand some of the survey respondents’ hesitancy about CBD, as the industry is not yet standardized or regulated. Just because you can pick up a CBD oil at the corner bodega in NYC or even on Amazon, does not mean it is good quality. The FDA has held hearings on the subject, but it could take a long time for them to create guidelines and grant approval for products in the industry. They have, however, approved the first drug to contain CBD, which treats epilepsy and is made by GW Pharmaceuticals.

Additionally, research is sparse given that CBD was illegal up until this year. More research will need to be conducted on the compound now that it is legal to back up claims that CBD truly has therapeutic benefits. Until the FDA creates a regulatory framework for the industry and more research is completed on its actual effects, we can appreciate people’s skepticism. That will act as an impediment to the industry’s growth potential until it is cleared up and people get better educated.

#2) That men and millennials were the two demographics most likely to use CBD did not surprise us as it is in line with marijuana use. That said, we do think CBD has a larger total addressable market than THC – the cannabis compound that gets users high – given that it is non-psychoactive. For CBD to be legal, it must have under 0.3% of THC. Therefore, users who want the supposed therapeutic benefits of CBD, but do not want to get high or show drugs in their system could expand across all ages and genders.

Moreover, while most people would not even consider giving their pets marijuana, animals offer an entire new market segment in addition to humans. This is one more reason CBD offers a bigger total addressable market than THC. The more research is done, the more veterinarians may recommend CBD and the more their clients will buy these types of products for their pets.

#3) Although regular marijuana users may smoke or consume cannabis every day, there are also a lot of occasional users. Given that people mostly take CBD for pain, mental health and general wellness, that’s a big market opportunity for companies as people rely on repeatedly using the product. Any oils we have come across recommend taking a certain amount once per day. That’s especially understandable if someone is treating an ailment like pain each morning or taking it before bed for insomnia, as just two examples.

Bottom line: most respondents in our last legal marijuana survey said CBD offers more upside potential for growth than THC. We agree as it has a larger total addressable market, and it gives companies a way to diversify their product offerings with a compound that is already legal in the US, unlike THC/marijuana. It also plays to an important demographic – millennials – that is overtaking baby boomers as the largest generation. Millennials will drive spending patterns and shape consumer preferences for decades to come, so we would favor companies that embrace the disruption of CBD and tap into this new growth market.

Source: https://www.prnewswire.com/news-releases/new-acosta-report-finds-28-percent-of-consumers-use-cbd-products-daily-or-as-needed-300915291.html

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