Ask Our Experts 07/22/2018
Q: What factors would you suggest using to quantify the potential market sizes for geographically specific dispensary sites under consideration?
A: New Frontier Data has often worked with clients among various states seeking to analyze a given market opportunity down to a county or city level. To best quantify any potential market’s size, factors for consideration include a wide range of variables -- ranging from specific consumer demographics (e.g., ages, incomes, education, population density), to cannabis-specific considerations (e.g., rates of cannabis use, prevalence of qualifying conditions approved for medical cannabis use), then customize the weighting of such variables to reflect the client’s strategic priorities. For example, in a medical-only market, identifying the prevalence of qualifying conditions among the population is keenly more relevant than in an adult-use market where all consumers can participate.
Additionally, in markets with existing cannabis programs, available data on consumer-demand trends, product segmentation, and point-of-sale data can add powerful predictive insight about the market’s performance. With benefit of additional retail sales data, New Frontier Data can provide a tailored assessment of the micro-elasticity associated with a specific store or neighborhood, to enable business owners to develop competitive pricing strategies reflective of the local demand.