By Mrinalika Roy and Sourasis Bose
(Reuters) - Young women are consuming more pot than men for the first time in a historic shift in the $30 billion U.S. cannabis industry, prompting companies to revamp products and step up investments.
Top cannabis retailers told Reuters they've started refocusing shelf space toward products that have proved popular with women, including edibles, tinctures, topicals, and beverages, in the hopes that any resulting rise in costs will pay off in the longer term.
"Creating new products or rebranding may seem like sunk cost, but with women making over 80% of purchasing decisions in the U.S., it's not just smart, it's necessary," said Lauren Carpenter, CEO of cannabis dispensary chain Embarc.
Women now make up 55% of the user base on Jointly, a cannabis product discovery app, and are even surpassing men in spending in certain areas. In September, the average purchase size of female buyers exceeded $91 at Housing Works Cannabis Co, New York's first legal dispensary, compared with $89 by male buyers.
Updated branding, market study and women-focused research and development could be needed to capitalize on the growing market potential - a "short-term impact on capex with the long-term benefit of capturing female consumers who are not going anywhere", said Embarc's Carpenter said.
Women aged 19 to 30 surpassed men of the same age in cannabis consumption for the first time in 2023, according to a survey by the U.S. National Institute on Drug Abuse (NIDA).
The rise could be partly attributed to medical reasons like stress and anxiety, said NIDA director Nora Volkow, one of the study authors.
Out of a dozen regular female cannabis consumers interviewed by Reuters, the majority cited mental health concerns such as anxiety and depression as their primary reason for usage. To be sure, there is little evidence to suggest cannabis can help with those issues.
The ongoing legalization of cannabis across more U.S. states and growing social acceptance have also fueled the shift.
"Women are more likely to purchase from the industry's legal market than their male counterparts, making them practical targets with long-term capital benefits," said Tatiyana Brooks, co-founder of cannabis data firm GetCannaFacts.
New York-based Tilray (NASDAQ:TLRY), a retailer with a market cap exceeding $1 billion, said it was increasing investments in its brands favored by female patrons, such as Solei Cannabis.
The firm, which holds a 45% market share in the cannabis beverage market, said its range of offerings, including its XMG brand's lemon iced tea that is sold for around $6, has been a big hit with women.
Similarly, Calgary-headquartered High Tide (NASDAQ:HITI) partly credited its recent acquisition of Queen of Bud to the Canadian brand's designed-for-women products featuring higher concentrations of THC, the main active ingredient in cannabis.
The companies did not divulge the increased costs that this shift may entail, as the trend remains relatively nascent.
A generational shift is also evident. Several retailers and dispensary owners have reported that their younger customers, or Gen Z, are consuming less alcohol and tobacco, and more cannabis.
"Businesses that take the buying power of female cannabis consumers more seriously will stay ahead of the curve among competitors," said Brooks from GetCannaFacts.