In numerous studies, consumers report using cannabidiol as a palliative treatment for the symptoms of mental and emotional health issues. Consumers dealing with challenges such as anxiety, depression, and sleeplessness turn to CBD as a supplement if not outright substitute to over-the-counter products and prescription medications.
My firm found similar results as our peers when surveying CBD consumers. Among the top symptoms or conditions driving the use of CBD, the list looks more or less the same: chronic pain, nausea and low appetite, and the factors listed above. Publishers strain to differentiate on scope, methodology, survey panel, and granularity. (For example, some surveys break “chronic pain” in two: chronic joint or arthritis pain and chronic muscle pain.) The definitions change slightly and the numbers shift from one study to the next, but the high-level summary remains the same: consumers have discovered, many quite recently, that CBD offers some promise in addressing serious health conditions. Most studies attempt to identify changes in consumption to related products as well, such as anti-depressants, sleep aids, and other OTC and prescription medications.
The Devil Is In The Details
Subtlety and nuance have no place in headlines. For some time, players from all corners have attempted to weigh in on the impact of cannabis legalization on mainstream categories of consumer products. The connection between cannabis and other products feels intuitive in some cases. For example, viewed through a simplistic lens, marijuana and alcohol could be considered substitutes. (The alcohol industry seems to believe so, if opposition spending is any indication.) But as good storytellers know, the details are important.
Pinning down time periods for a pre-post analysis of legalization’s impact on alcohol sales sounds easy enough. Across the country, there are now years of history to work with as legalization rolls out. Firms like Nielsen, with decades of experience tracking retail purchases, have ample data to input. Cannabis sales through licensed dispensaries are being aggregated by numerous firms. Pairing the two, while easier said than done, should yield a reliable quantification of legalization’s (of adult use, as that radically transforms the market) impact on alcohol sales.
Yet to my knowledge, no analysis has been done – and broadcast publicly for scrutiny – demonstrating a model that controls for a sufficiently robust set of factors influencing that result. (Full disclosure: nor did ours. We based our 2018 data on surveying cannabis users in adult use states on numerous topics, including change to the use of alcohol, Rx, and OTC use.) Firms like Nielsen work with organizations with resources able to execute enormous modeling projects. A company the size of AB InBev or Molson Coors can (and should) budget for projects to break down brand and category sales, such as a marketing mix model to identify return on ad spend. Such a model takes as many factors into account as reasonablyl possible. In our case, for a more accurate estimate of legalization’s impact, we would want a laundry list of data on alcohol sales: advertising and promotional activity, in-store and on-premise sales data, seasonality, consumer demographics, category- and brand-level trends, even weather. Pre-post dates could be inputted per state either simply using the “go live” date for adult use or a finessed date handicapping for the inevitable slow rollout due to regulatory bungles and legal snafus. And that is to measure a mature category – alcohol – sold through a relatively small handful of retail channels dominated by big box stores.
Returning to CBD
If measuring the impact on alcohol presents an intimidating challenge, how can we hope to gain insight into the impact of CBD on consumption behavior in other categories? The retail footprint of CBD is, fittingly, complicated. (We measured no fewer than seven purchase channels.) Thus there’s little hope of any market basket analysis to show switching behavior. The legal status of CBD lacks any timestamps remotely similar to adult use legalization, no matter how much faith we put in the latest Farm Bill. That largely leaves us with consumer data. In our CBD Consumer Experience whitepaper series we inquired about changes to consumption in beer, wine, spirits, supplements, OTC, and Rx products. Notably, we sought to understand the net change, as follows:
Of the categories listed above – a subset of the full set of categories tested – a quick scan points to those most heavily impacted as consumers adopt CBD products. The shrink in reported anti-anxiety and anti-depressant usage frequency would be truly eye-popping if not for the “Using More” figures. Because consumers are shifting behavior simultaneous to adopting CBD, but not exclusively due to CBD itself. Perhaps some started a treatment plan that added prescription medications. Life circumstances can force change. Further, digging a level deeper into the data reveals some useful details as well.
Any research agency will have this level of detail available for use. (As to if the detail can be acquired free of charge, that’s another issue.) There are two separate but related issues at work when seeking to interpret data on issues as complex as the impact of broadening access to, and legalization of, cannabis: ask what is and what is not in the data, and ask to see a finer degree of detail than you might find in the headlines.
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