Cannabis Industry Quickly Fills Data Gaps

Firms Like Cannabis Reports and BDS Analytics Provide Much-Needed Market Data

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Credit: Kiva Confections
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When Kiva Confections considered raising the price of its THC-infused chocolate-covered coffee bean and blueberry Terra Bites candies, the company looked to one of the newest sources of data available to product marketers. Information on other similar cannabis edibles and their price points was readily accessible through Cannabis Reports, a market research tool that helped Kiva realize that some dispensaries were already increasing the price on related products.

"That sort of validated that this product had a lot more value in it that can be realized," said Charlie Cangialosi, director of sales at Kiva Confections.

The cannabis industry is on the verge of data sophistication. The availability today of market data in standardized form is indicative of the high-speed with which the cannabis industry has evolved. Industry data in the past was a haphazard array of product information available by manually perusing online dispensary menus. Now new firms are developing systems of formatted product data akin to that available to CPG marketers.

More than 70 other brands purveying all sorts of cannabis products -- from seeds to candy -- pay Cannabis Reports to access its live market data showing how products are priced and described at legal dispensaries. Some retailers and dispensaries also pay to get data using the software which serves up information on 9,000 cannabis strains from nearly 600 companies offering 20,000 products and 1,850 brands.

Mr. Cangialosi, who served in many roles at Anheuser-Busch and other brewers for more than 15 years before joining Kiva a year ago, was accustomed to having lots of market data at his fingertips before entering the burgeoning and far less data-centric cannabis industry. "I came from this perspective of working in this obviously large but very data rich environment," he said. "I could look at Joe's Bar and Grill in Des Moines, Iowa and tell you what they had on tap in one quick query," he said.

Kiva also referred to Cannabis Reports data when developing a new type of chocolate bar. Information on other cannabis edibles containing cannabidiol or CBD -- which has anti-inflammatory and anti-anxiety properties without making its imbibers feel stoned -- was readily accessible through the market research tool and helped Kiva assess the viability of introducing a CBD bar. The company did a soft roll out of its 60MG Espresso Dark Chocolate CBD bar in mid-February.

Before, "everybody just sort of created their own way of storing that data," said David Drake, CEO and founder of Cannabis Reports, which uses natural language processing along with human oversight to ensure brand product descriptions and information such as THC levels are presented in standardized formats.

Another cannabis industry data provider, BDS Analytics aims to be like IRI or Nielsen, providing data on a subscription basis to companies that allow it access to their transactional information.

BDS has categorized and organized over 20,000 products over the last year, and its system features historical data going back two years encompassing 20 million anonymized and aggregated purchase transactions. The company's dispensary partners upload data points associated with every transaction such as products sold, quantity, price and date, from POS systems into the BDS database.

Brands pay to access the information in the firm's GreenEdge software via dashboards and widgets to keep an eye on their product performance by category and subcategory. Some use the tool to arm salespeople with data convincing dispensaries to sell their products, others for product development or to evaluate how pricing compares to that of competitors.

"I see a lot of parallels with the cannabis industry," said Roy Bingham, co-founder and CEO of BDS Analytics, who likens the current state of cannabis industry data to that of natural foods 15 years ago, when many now well-branded products still sold in plain brown paper bags or in bulk. "We're at a stage with this industry in some states like Colorado or Washington and Oregon where the natural foods industry was 15 years ago, but we're going to accelerate much faster," he said, predicting that the cannabis industry will improve its data offerings rapidly in the next three to four years.