What Does Data From 3,500 Cannabis Retail Sources Say About Market Dynamics? CEO Of Analytics Company Reveals Key Trends

In an insightful episode of Benzinga's Cannabis Insider podcast, hosts Javier Hasse and Elliot Lane welcomed Cy Scott, CEO and co-founder of Headset. As a leading figure in cannabis data analytics, Scott’s perspectives offer invaluable insights into cannabis market dynamics, consumer behaviors and emerging trends shaping the sector.

2023: A Tough Year For Cannabis Operators

The past year posed its share of challenges for the cannabis industry, with macroeconomic factors such as inflation and interest rate hikes impacting businesses across the board. “A lot of that had to do with inflation, interest rates going up, venture kind of pulling back and that has impacted broad categories,” Scott said.

Despite these challenges, Headset’s data, sourced from about 3,500 retail cooperators, including adult-use retailers and medical dispensaries provided a rich view of market dynamics. This intelligence has proven crucial for companies navigating the turbulent waters of the cannabis market.

What Does The Data Say About Market Trends? 

Scott delved into the specifics of market performance, revealing that older markets like California, Colorado and Washington experienced negative growth in 2023. However, emerging markets such as New York and Ohio presented new growth opportunities, underscoring the diverse and fragmented nature of the cannabis landscape.

Michigan‘s market, in particular, emerged as a story of remarkable growth. “Michigan is moving more units than the entire state of California… that’s insane.” The state’s strategic position and competitive pricing have played pivotal roles in this success, attracting consumers from neighboring states with stricter cannabis laws.

The Pricing Puzzle And Consumer Preferences

Discussing the factors influencing cannabis pricing, Scott pointed to competition, scale and market fragmentation as key drivers. He observed a general trend of declining prices across markets, with some stabilizing more than others.

The conversation also touched on the rise of pre-rolls, especially infused variants, which have become a significant growth driver for the category due to their premium price points and high THC content.

Scott’s insights offer a compelling snapshot of the cannabis industry’s current state and its complex interplay of challenges and opportunities. Reflecting on the broader implications, he adds, “The market’s resilience is testament to the industry’s ability to adapt and innovate, even in the face of adversity.”

For deeper insights and a comprehensive analysis of the cannabis industry’s trajectory, tune into the full episode of Benzinga's Cannabis Insider on YouTube.