Marijuana Money: How Much Do Cannabis Consumers Spend Annually?
With the marijuana legalization push quickly working its way through the psyches and legislative houses belonging to millions of Americans, it’s easy to get caught up in the fervor a brand new and previously off-limits market is creating. People are making money, jobs are being created, and fewer people are being sent to prison or paying huge fines related to cannabis growth or possession. And though many questioned it, legalization is looking like it’s paying off for the few states that have made the jump.
One of the more interesting and exciting aspects of legalization has been all of the new data that is being collected for analysis, that was previously unreachable. Information about cannabis properties, how different strains or products can benefit or harm consumers, and the consumers themselves are all coming to light — and it’s all data that we’ve never had access to prior to legalization.
Case in point, new market insights from Seattle-based cannabis intelligence company Headset Inc. are giving us a clear view of the “average cannabis consumer,” something we may have tried to piece together from data fragments before, but now can see rather clearly as people embrace the marijuana markets. Headset’s brief digs into marijuana sales in Washington state to paint a portrait of today’s cannabis consumers, and even breaks up preferences by several demographic groups.
Portrait of a cannabis consumer
First and foremost, the report says the average cannabis consumer spends roughly $645 on marijuana and related products per year. Here is the chart:
While that $645 figure is the average, you can see that the largest group — nearly a quarter of all consumers — spends between $1,000 and $2,500. All told, almost half of all consumers are shelling out between $500 and $2,500 per year. A small minority, 2.2%, are spending more than $5,000 per year.
As far as single-trip purchases, here’s the data:
“Most people spend between $25 and $50 per trip to a marijuana store, with a $33 median spend per trip. 34.7% of customers spend less than $10 on average, usually picking up a single item like a half gram pre-roll or a carbonated beverage. Only 8.2% spend more than $100/trip,” the report says.
As for demographics, male purchasers are so far dominating the retail space. “Accounting for 68.9% of customers, the ratio of men to women is well over 2:1. This disparity is not surprising given cannabis culture’s emphasis on the male pothead,” the report says.
Perhaps least surprisingly, the breakdown of customers in age groups shows that the vast majority of cannabis consumers — at least those going through legal markets and means to get product — are young.
With a more clear view of who marijuana consumers are and how much they’re spending, it’s going to become easier and easier for cannabis businesses to reach out. Though legal markets only exist in a few states at the moment, more states like California, Nevada, and Massachusetts legalized marijuana in the latest election, and markets and industries subsequently open in new regions.
What it means for entrepreneurs and investors is that there are plenty of opportunities to be had, and lots of consumer dollars to go after. For consumers, it means more choices, and increased levels of competition keeping prices in check — so long as stringent government oversight doesn’t get in the way.
Right now, consumers can use numerous tools to find the best prices and selection. We’ve previously looked at cities where you can find the cheapest legal marijuana in Oregon, Washington, and Colorado, using data from Wikileaf. As markets expand and legislators become more comfortable with letting the businesses sort things out for themselves, it’s not far fetched to think those prices will further drop, and new and innovative products or choices will become available.
The typical marijuana consumer may not differ all that much from what we stereotypically think of as “stoner,” but what we do know now is that they have money, and are willing to spend it.
Check out Headset Inc.’s full report here.