Wherever you look, there’s data. Nowhere does this seem more relevant than in the legal cannabis industry where inquiring, modern minds might watch the market, validate medicinal claims, study analytical results, and/or try to make sense of the rules and regulations. The data might regard delta-9-tetrahydrocannabinol content in final products, desired or not; or sales projections; or costs associated with cultivating plants; or taxation on the water supply; or the terpene profile of a given cultivar; or the growing number of people entering the cannabis industry as consumers, patients, or employees.
Indeed, data is everything, and many of us look to BDSA for their research and subsequent insights into the cannabis market. I recently spoke with Roy Bingham, Executive Chairman and Co-Founder of BDSA to learn more about what the company seeks to provide to cannabis industry businesses and professionals.
JSL: Can you describe the role BDSA seeks to play in the cannabis industry?
Roy Bingham: BDSA has a long-standing history of providing the most accurate, comprehensive, and insightful retail sales data on the cannabis industry. The actionable data we provide drives business decisions and—more importantly—results. We seek to provide our clients with the most robust and granular view of the marketplace to make key strategic decisions around pricing, innovation, assortment, category extensions, market expansion, consumer targeting, and beyond.
JSL: How do you acquire your data?
RB: BDSA continuously receives complete consumer transaction data from more than 1,000 cannabis retailers. That data is imported, cleaned, standardized, and processed to yield state- and province-wide sales estimates at category, brand, and product levels. We have processed raw transaction data covering more than $1 billion in sales.
Every line item we receive from our retail partners is reviewed, verified, standardized, and categorized to ensure accuracy. This process takes time (sophisticated machine learning techniques as well as thousands of labor-hours each month), but our top priority is to provide accurate data our clients can trust to make key business decisions.
JSL: As a data provider, what advice do you have for anyone who is consulting data, in general, across different platforms and providers? In the days of misinformation, how can readers sift through everything?
RB: The amount of information (and in turn, misinformation) available on any given topic is overwhelming on the best of days—and impossible to decipher on the worst. The ability to accurately decipher facts from opinions and advice is only going to become more necessary in the battle against misinformation that we’re facing today.
At BDSA, we build trust with our audience by ensuring that our panel of dispensary partners is representative of the total market. It isn’t just about the number of stores on the panel, but more importantly that the panel is diverse and representative of the entire market. We provide a comprehensive suite of data, research, and insights across the cannabinoid market, including point-of-sale data, consumer research, and global cannabis industry forecast models. Each of our services informs the others and drives accuracy, granularity, and coverage, providing a comprehensive view across the market.
JSL: What are most surprising findings in your research and data collation across the cannabis industry?
RB: One of the most interesting findings from the year has been that the cannabis industry is faring remarkably well, despite—or, likely, because of—the global COVID-19 pandemic. Early in the year, normal sales patterns were very disrupted by consumer concerns of lockdown and inability to purchase in dispensaries. As a result, there were huge spikes in sales, but it was not apparent that sales overall were trending up strongly in the largest and most mature states like California, Colorado, Oregon, and Arizona. However, now that we have eight months of history, we can see that sales are up very strongly in many states and up well over the growth trends that we had been seeing. In addition, newer states like Illinois and Massachusetts have been making strong progress.
JSL: From the data’s perspective, where are we headed? What do the trends say?
RB: In our most recent global cannabis sales forecast, we predicted sales to reach $19.7 billion by the end of the year, an increase of 38% over 2019 sales of $14.8 billion. Over the longer term, BDSA predicts global cannabis sales will reach $47.2 billion by 2025, a compounded annual growth rate (CAGR) of 22%.
We expect to continue to see significant developments in the major categories of flower (including good growth with pre-rolls), concentrates (especially resurgence of vape and live resin growth), and ingestibles. Cannabis-infused gummies is a specific category to keep an eye on, as these candies have seen particularly strong sales, making up 84% of candy ingestible sales so far in 2020 across Arizona, California, Colorado, Nevada, and Oregon. Overall gummy sales in these 5 states have seen strong growth in recent years, from $20 million in July 2017 to almost $64 million in July 2020, a growth rate that far exceeds that of other candy ingestibles.
Gummies are also the most preferred edible product by a wide margin, with 33% of U.S. and 31% of Canadian ingestible consumers citing gummies as their preferred type of edible. The next most popular ingestible products, baked goods, were preferred by 18% of U.S. and Canadian consumers.
Data provides knowledge on how to navigate the various and diverse roads ahead and extracting the most from that data is paramount to progressive success. The data that BDSA provides encapsulates the industry from the consumer’s perspective, an integral vantage point when deciding what products to manufacture, and gaining insight into whether to flow with the traffic or forge your own course.
