How will the CBD and cannabis craze impact drugstore businesses?


How will the CBD and cannabis craze impact drugstore businesses?

The cannabis and cannabidiol (CBD) craze presents both risk and opportunity to the U.S. drugstore channel. Striking the interest of curious consumers, the mainstreaming of CBD could be ushering in a new era of ailment treatment, where major pharmacy chains like CVS and Walgreens have begun to respond to consumer demand by announcing the sale of hemp-derived CBD products in topical forms such as creams, lotions, patches, and sprays.

While it’s still too early to predict the future impact of legal cannabis on the mainstream U.S. retail market, we do know that demand and consumer interest is present and certainly growing. So, with this in mind, I ask you this: How much do you currently know about the legal cannabis market and the implication it may have on your business and your consumer share? Regardless of your answer, this piece should provide you with a baseline understanding of the legal cannabis consumer landscape in the U.S., with a specific focus on how consumers are viewing legal cannabis for the treatment of ailments.

Let’s start by breaking down the basics:

How did the rise of CBD come about? Beyond the growing consumer buzz around cannabis, this move was enabled by the passage of the Farm Bill in December 2018, where hemp (and hemp-derived CBD) was removed from the Schedule I controlled substances list, opening the door for major U.S. retailers to start selling some, non-consumable, hemp-based CBD products with no legal risk.

According to the latest data from NielsenIQ and Headset, consumer interest in purchasing legal cannabis exists across gender and age groups in the U.S. Of adults 21+ surveyed, 34% of consumers indicated that they were interested in consuming cannabis legally, versus 66% who said they were not interested in consuming cannabis at all. When it comes to gender, 31% of women are likely to purchase legal cannabis, compared with 38% of men. Age wise, consumers who fall within the 21-34 age range are most likely to purchase legal cannabis (41%), followed by consumers who fall within the 35-44 age range and 55-74 range (both age brackets are tied at 39%). How do these demographics line up with your core target consumer?

According to NielsenIQ, consumers report they will likely consume cannabis for a variety of reasons outside of recreation. For U.S. adults who report they would likely consume cannabis if it were legally available, the top reasons are all tied to ailment treatment. These include:

NielsenIQ data also shows that many of those consumers who are interested in legally consuming cannabis are ailment sufferers: 40% of all headache/migraine pain sufferers, 40% of all arthritic pain sufferers, and 41% of all back/neck pain sufferers, would all be open to consume cannabis if legally available.

Out of all of the adults that have an ailment listed, below are the top ailment states where consumers would consider using cannabis as a treatment, which may give a hint toward what categories may see the most disruption within the drugstore channel.

With all of this data in-hand, it brings up the question around what this means for the future of today’s drugstore health and wellness, over-the-counter (OTC), and prescription offerings. There is no doubt that consumer interest in legal cannabis products puts the cannabis market in a strong position to disrupt the current drugstore channel. Some of that disruption can already be seen, with a few players proactively embracing the buzz behind cannabis. How will you respond? In today’s business landscape, knowledge and data is power. Through our alliance with Headset, NielsenIQ is enabling data-driven decision making by bringing visibility into a fast-growing market for key players in the drugstore channel and the U.S. CPG industry at large.

Now more than ever, it’s important to lean into trusted data sources to better understand how today’s consumers are interacting with legal cannabis products and what that means for your business today and in the future.

Note: All information in this report is based upon measurement of sales of cannabis products in U.S. jurisdictions where such sales have been legalized; or consumer intentions with respect to future consumption of legal cannabis products.

This article was originally published on Chain Drug Review.