Unsatisfied customers tend to get more attention, but a new survey from the Bank of Montreal suggests most Canadians have had positive experiences buying legal pot. BMO contacted 500 individuals across Canada who are at least 19 years old and, based on their responses, the bank found not only did most of those who had legally purchased recreational cannabis consider themselves satisfied customers, but many said they would purchase legally again or already had. Below, Cannabis Professional breaks down the survey’s highlights:
Mostly satisfied customers
Slightly more than one third (35 per cent) of survey respondents said they have purchased recreational cannabis legally since Oct. 17, 2018. Within that group, two-thirds rated their overall satisfaction as either “good” or “very good,” more than one-in-five (22 per cent) had already made a subsequent purchase, and well over half (60 per cent) said they hadn’t purchased more legal pot yet, but planned to do so soon. “Based on these responses,” BMO analysts Tammy Chen and Peter Sklar write in their analysis of the survey results, “we believe the negative user experiences highlighted by media reports represent a smaller portion of the overall legal recreational market.”
Brands matter, but your local budtender matters more
BMO’s cannabis analysts said they were “surprised” to find that nearly one in four respondents (23 per cent) who had purchased legal recreational cannabis actually considered brand names when making their purchasing decisions, which they write “suggests that there may be some brand awareness beginning to develop among consumers.”
Nearly one in three respondents (31 per cent) said, as CanPro’s Marcy Nicholson has reported recently, focus on finding the most potent (i.e. highest THC content) products for the lowest price. The most important factor customers considered when making their purchasing decisions, however, was advice from store employees. Fully 42 per cent of survey respondents who had purchased legal recreational cannabis cited salesperson recommendations. “What remains unclear at this point is if in-store staff members are recommending specific brands,” the BMO analysts wrote. “During our store visits, we observed that the majority of sales staff recommendations were still differentiating products based on the type of strain and the THC vs. CBD ratio.”
Market size makes valuations hard to justify
Most survey respondents (65 per cent) indicated they have not yet purchased legal recreational cannabis and of that group, the vast majority (70 per cent) said they are not cannabis consumers and have no plans to start consuming post-legalization.
That result “suggests limited willingness at this point by non-cannabis [consumers] to enter the legal recreational market,” the BMO analysts write. They note the coming legalization of “value-add” cannabis products such as infused foods, drinks and vape products “may be more appealing to non-cannabis [consumers] than the current product offering of fried flower and oil tinctures,” they also warn that the success of those products “will be critical in assessing the potential for legal Canadian recreational market opportunity to expand beyond illicit market displacement.” Simply displacing the illegal market represents a “sizable market opportunity,” the analysts write, citing a Deloitte estimate of up to $9-billion per year, they also point out that “the valuations of the larger Canadian [producers] are pricing in a significantly larger market that expects meaningful disruption to the alcohol and health and wellness markets.”
Jameson Berkow