Purchasing marijuana often doesn’t hinge on the availability of legal stores, as buyers frequently opt for their reliable local dealer over pricier legal dispensaries.
Ultimately, this rivalry shapes the survival of licensed cannabis businesses.
A study by New Frontier Data recently addressed this, proposing strategies to boost the legitimate market and close the gap with its unregulated alternative.
The study reveals that illegal cannabis transactions continue to dominate over legal sales, despite over half of the U.S. population having access to legally purchase high-THC cannabis. In 2022, the black market for cannabis soared to $74 billion, dwarfing the legal market’s $28 billion.
Predictions indicate that black market sales will surpass legal sales until at least 2030, even in states where cannabis is legal.
“The legal cannabis sector is fiercely competitive, vying for consumers who prefer regulated sources,” the report noted.
Legal outlets can combat this by providing clear, accurate information about cannabis, aimed at demographics such as older adults and women who are curious but cautious.
This education could debunk myths, clarify safety and legal details, and emphasize medical advantages.
Utilizing various mediums like social media, community events, or Reddit threads was recommended for broader outreach, especially where traditional advertising is limited.
Enhancing access to legal cannabis, through more convenient retail locations and user-friendly online services, is also vital.
“Urban residents, often with lower incomes, are primary clients for dealers. They usually buy in small amounts but consume frequently, necessitating accessible dispensaries,” the research indicated.
In states allowing only medical cannabis, streamlining the medical card process by reducing costs and expanding qualifying conditions could boost legal market engagement.
Price remains a critical factor, as highlighted in the report.
The study recommends diversifying product ranges and price points to attract a broader customer base. This includes various cannabis strains and consumption methods, like edibles and oils.
“Individuals who purchase cannabis from dealers typically have lower incomes than those who buy from legal retail outlets,” the report stated. “Retailers should offer products at various price points and consider promotions or loyalty programs.”
Working with regulators and healthcare professionals is essential for informed policy-making and market expansion while ensuring public safety. Involving medical experts in cannabis education can also increase the number of medical cannabis users.
The report also emphasized the importance of transparency and compliance. Maintaining high-quality standards, clear product sourcing, and adherence to regulations are crucial for building consumer trust and sustaining market growth.
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