Does cannabis behave like a typical consumer in the packaged goods (CPG) market or are there other dynamics at play? What actions can companies take to stay competitive? These are some of the questions tackled in a new report titled: "Price. It's complicated. How Cannabis Pricing Differs From Other Consumer Goods."
The analysts, led by Kelly Nielsen, vice president of Insights & Analytics at BDSA, examined retail sales data from the first half of 2021 and studied Deloitte and BDSA’s 2021 consumer surveys. They discovered that there are fundamental similarities between cannabis and CPG markets.
In addition, the report suggests steps cannabis brands can take to maximize their business results in the challenging environment of this young industry.
"As the market continues to expand, understanding the role of pricing will be imperative to maximizing potential for brands and retailers. Market growth brings opportunity, and we continue to see more brands and products entering the market,” Nielsen told Benzinga.
“At the same time, though, consumers, manufacturers, and retailers are getting more sophisticated. In order to be competitive, it is important to understand how pricing plays a role in the decision-making process, and how pricing and product benefits can be leveraged to maximize potential," added the VP.
The Cannabis Market Is In Bloom
According to the report, global legal cannabis sales reached nearly $21.6 billion in 2020, an increase of 50% over 2019 sales of $14.4 billion, due largely to legalization. BDSA forecasts global cannabis sales will continue to grow quickly, to US$62.1 billion in 2026, more than double the 2021 estimated global sales of US$30.6 billion with a compound annual growth rate (CAGR) of more than 15%.
Through dispensaries alone, …