Canada, October 11, 2019 (CANNABISTECH) – Statistical analysis has been an important factor in cannabis industry, as it gives several information about its status and legalization.
A deer wandering onto a freeway is a fitting analogy for data analysis in cannabis, in more ways than one. With a century of prohibition following cannabis everywhere it goes, statistical analysis has been scarce on all things cannabis. Furthermore, what we do have is primarily skewed by the policies advocated during the War on Drugs.
The data-blackout is changing with the legalization movement. In the early years of legal cannabis, a few companies set the pace for cannabis data aggregation, including BDS Analytics, New Frontier, and New Leaf. These companies were the crest of what is now an explosive wave of businesses selling market intelligence pulled from data aggregation
Very quickly, it became clear how in demand these big-data tools were for cultivators, processors, investors, and retailers. If you want to succeed in cannabis in 2019, you must be using data like a chisel to drill down with incredible accuracy to consumer demands.
Today, the information pulled from public data and retail POS systems isn’t enough. A new wave of consumer-focused data analytics companies are popping up, including Strainprint, High There!, and Headset. They may all have slightly different approaches, but ultimately all aim to provide even more in-depth insights into the nuanced demands of a highly segregated cannabis marketplace
With so many companies focused on pulling data from the legal consumer, it starts to feel as if cannabis is moving into a big brother surveillance twilight zone. It was only a few years ago when cannabis was entirely an underground operation. How can the industry have pivoted from total privacy to total surveillance? Data is clearly necessary now, but how can it stay ethical?
WHERE DOES CONSUMER DATA COME FROM?
Darren Roberts, CEO of Green Mile Holdings, just launched HighQ, a data collection service for cannabis businesses. He shed some light on where their data points come from, and how it’s used for business development, market predictions, and building a better product for the end consumer.
Green Mile Holdings began its initial foray into the industry with High There!, cannabis’s first social network, directory, and “community bazaar.” Launched in 2015, the company very quickly discovered just how valuable this insight was for a booming consumer industry. According to Roberts, HighQ will interpret public sentiment on products and brands; determine geographic and demographic nuances, and predict trends.
Now Green Mile Holdings pulls data from this first-party data source, to aggregate it with second- and third-party data. In layman’s terms, this means they combine High There! social network learning with sales data pulled from retail POS systems and publically available demographic data.
Green Mile Holdings is banking on this unique set of aggregated data points to provide insights, not only for their business development but to other interested parties within the sector. Eventually, HighQ will be a starting point for investors, researchers, dispensaries, and producers.
DATA IS NECESSARY, BUT CONSUMERS ARE WAKING UP
The potential for abuse of consumer (and user) information is a relatively recent, but growing, concern. With Facebook and other social networks facing backlash for their role in many data-related scandals, it’s a warning to aggregators everywhere. Consumers want transparency, and they want control over where and when their data is used.
Theoretically speaking, a cannabis consumer today (whether or not they understand it) is giving up information at just about every point along their purchasing journey—from what they Google (Google trends), to their geographic and demographic details (public data), to their purchase through a retail location. If they are a participant in a cannabis social network (HighThere), a review ecosystem (Lift & Co.) or use a mobile application (Strainprint), they further add detailed personal data to the growing network of data points.
Businesses today, if they use the right tools, have a very detailed picture of their target market. So far, there is no indication that the cannabis sector is abusing this information, and as Roberts explained, the primary goal of this insight is to help businesses respond to consumer demands. Essentially, consumers give up their data and, in return, receive more intuitive products and better brands focused on specific needs.
CONSUMERS NEED TO KNOW
While some cannabis consumers may know how their data is collected in the industry, it’s likely safe to assume most do not. Do all customers know that their aggregated information is collected from POS systems? Do they understand that the reviews they leave within cannabis communities are transformed into market trend analysis? Probably not.
As is true elsewhere, a segment of cannabis consumers will care about their privacy, while others will not. Despite the scandals plaguing some of the biggest social networks, they remain the most prominent social networks. Still, before scandal creeps up on the big-data industry in cannabis as it has in other places, the industry needs to take note and ensure transparency on how it collects, uses, and sells consumer data. The more consumers know today, the better.