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Gen Z, Millennials Fuel Cannabis Market Shifts

Gen Z is the first cohort to not have flower as the top product category.

Millennial and Gen Z cannabis consumers appear to have different tastes that the generations that came before them – and their dominance of the market may drive a shift in product innovation.

Those two demographic groups now account for 72.1% of all tracked sales in Canada and 63% in the U.S., according to a new report from data analytics firm Headset.

The findings also reinforced some long-known assumptions. Older consumers generally prefer more traditional product categories like flower and edibles, but younger consumers are more drawn towards newer categories such as pre-rolls and concentrates, categories that are generally more easily customized for group tastes than flower.

In fact, Gen Z consumers in the U.S have flocked to vape pens as a preferred form factor, with the category making up 33.6% of their total sales. Zoomers’ penchant for pens marks the first demographic group to buck the trend for flower products.

Generation Z is also the fastest-growing age group, with 11.3% growth in the U.S. and 6% growth in Canada in their share of total sales year-over-year. Part of that may be due to the fact that many in that generation still haven’t reached the legal age to consume cannabis products – 18 or 19 in Canada and 21 in the U.S.

Pew Research defines Gen Z as people born between 1997 and 2012.

“Despite ‘older’ consumers encompassing a larger age range than ‘younger’ ones (34 versus 21 total years), younger consumers clearly dominate sales in each market, a trend that seems to be driven by the collective purchasing power of millennials,” Headset wrote.

Beyond Age

The study also highlighted gender and regional differences, including a faster growth in cannabis consumption by women in Canada and unique consumer preferences in product categories.

Males represent about two-thirds of all cannabis sales in both the U.S. and Canada. However, female representation among cannabis consumers is higher in Canada (37.5%) than in the U.S. (33.8%). Female participation in the cannabis market has been growing faster in Canada (1.2%) than in the U.S. (0.27%) on a year-over-year basis.

But that growth isn’t uniform across the countries. For example, Nevada experienced the largest increase in female representation in total cannabis sales with a 4% growth year-over-year, while Oregon saw the biggest decrease at -3.1%.

In spite of the downtick, Oregon still has one of the highest female participation rates in the U.S. at 36.4%. Colorado stands out for having the highest percentage of sales concentrated within the Gen Z and millennial age groups.

When it comes to product preferences, males tend to favor inhalable categories such as flower and concentrates, whereas females show a greater inclination towards wellness product categories such as capsules, topicals, tinctures, and sublingual products.

Male consumers, in general, also tend to purchase more expensive products than their female counterparts. Additionally, as age increases, so does the size of an average transaction.

For instance, female baby boomers spent an average of $64.84 per transaction in January and February 2023, which is 22.2% higher than the amount spent by female Gen Z consumers.