Wellness & Cannabis: Going Beyond Recreation
That is part of our reason for being. Trying to convince people that cannabis is not a drug. It is a plant, and used in sensible ways that are good for each individual, it can really help them — Amanda Jones, Co-CEO, Kikoko
Adult-use cannabis is often synonymous with recreational cannabis consumption, and for good reason as it is a great product for recreation! But to think of cannabis as simple a recreational product is to oversimplify its usage, as wellness plays a big part of cannabis consumption with plenty of parallels to the natural and wellness category in traditional CPG.
The Wellness Category
In traditional retail, the natural and wellness category often includes organic, plant-based, supplement or other claims-based products which in the earliest stages was often sold in a similar manner to cannabis — in small dedicated stores with limited scale and plenty of market fragmentation.
Whole Foods and Beyond
Long before its purchase by Amazon, Whole Foods began a new trend as one of the first supermarket scale natural food stores way back in 1980. Fast-forward to today’s world and there is a broad range of supermarkets focused on the natural and wellness channel, and even mainstream supermarkets generally carrying a dedicated aisle to the products at the least.
This all makes sense when we look at demographic trends, with emerging generations in Millennials and Generation Z consumers more conscious of their consumption and a renewed focus on wellness in a post-pandemic world. This trend to focus on the welness category even impacts other recreational categories, with alcohol brands diversifying and positioning into more wellness focused products and moving ‘Beyond Beer’.
Wellness and Cannabis
Cannabis has a strong background in wellness, with most legal markets starting with medical before moving into the adult-use category and more scrutiny on production processes and organic based products. A focus on wellness can expand the audience, accelerate adoption and drive new consumption formats and product innovation.
Wellness Formats
In general formats like Capsules, Tinctures and Topicals are more wellness driven vs. their counterparts like Pre-Rolls and Vapor Pens. While these categories combined account for less than 10% of all sales, they are a key component of the cannabis product ecosystem. Wellness goes beyond formats like Capsules as many products in more traditional, higher selling categories are marketed as wellness, such as high-CBD Flower or microdose Edibles that contribute the wellness landscape.
Advantages of Adult-Use Positioning
Going beyond recreational can attract a broader consumer profile to the industry. As people look at cannabis as a path to general wellbeing, the format may be more attractive and expand market share.
We see this with older generations who tend to purchase products in those traditional wellness formats like Tinctures more often than younger consumers. Expanding the audience will further normalization of the legal cannabis industry at a faster rate, as shown with recent survey’s indicating a majority of Americans now in support of full adult-use legalization in their state.
What to Watch For
The wellness category, with claims-based marketing and positioning is prime for expansion as new consumers come into the category, while existing consumers look for a more holistic approach to their cannabis consumption. Some things to watch for:
- Will we see ‘wellness’ dedicated retailers and dispensaries, a “Whole Foods” of cannabis that focuses only on wellness-based products?
- Or rather, will the wellness category get its own position within stores, where all wellness-focused products can be found?
- How much of best-selling cannabis categories like Flower, Vapor Pen will be marketed in a wellness capacity beyond the Capsule, Tincture and Topical categories?
An Interview with Amanda Jones, Co-CEO of Kikoko, a cannabis brand focused on the wellness category. Kikoko is one aof a few
Kikoko started with tea and has since expanded into other product lines. What drove the decision to start there?
We founded Kikoko for a girlfriend with terminal cancer. This was back in 2014, and she could not find any cannabis products that were reliably dosed. Plus, she was finding that while cannabis really helped her with pain, sleep, anxiety and appetite, the products were all too THC-strong and she couldn’t function and most of them tasted really weedy. After doing a deep dive into the science of cannabis wellness, Jen and I decided it was time to fix that problem, particularly for women. Tea is healthy, women tend to love both drinking it and the ritual of it, and we chose herbs that have been clinically proven to help with the health needs we were addressing. It wasn’t easy! Of course we chose the very hardest medium, because at that time no one had successfully put cannabis oil into water without a nasty oil slick. It took us 2.5 years and three science teams to crack that problem in an organic way.
Product positioning on effect such as “I just want to go to sleep.” Has this been helpful bringing consumers to the brand?
Oh yes. Our sleep products are our top selling in all our product categories. Sleep and calm categories are consistently our top sellers. When we first started Kikoko, most products were sold in cannabinoid ratios (e.g. 10mg THC: 10mg CBD). We realized that our customers would likely have no idea what that meant, so we were one of the first to come out with products with relatable benefits. Our first four teas were for sleep, pain and anxiety, mood and libido — all things hundreds of women told us they’d love help with. To this day, one of our main goals is to help people get over a reliance on pharmaceuticals and alcohol and try a natural plant instead. And so we came out with a few really low THC products so no one would not get crazy high. We are still the go-to brand for people who are newbies and want to enter with low doses. Our lowest is our Focus mints (fabulous for work) with only 1mg THC and 3 CBD. Perfect for newbies and also those who don’t want to get high at work but want to stay calm and present.
Who is your core consumer? Do you have plans to expand out on the consumer?
Our core consumer with the Kikoko line is women who are wellness-centric. That’s not to say that some Kikoko products won’t get you high. They will. We have several 10mg THC products. Nothing wrong with a little laughter in life — that’s wellness too. Our core consumer is the person who cares about what they put in their body. Our ingredients are organic (even though we are not allowed legally to put that on our packaging). We are maniacal about the quality of our products.
A Kikoko product ingredient list goes beyond the cannabis component, how do your ingredients enhance the wellness aspect?
We believe in plant medicine as a whole, and cannabis is just another plant in that vast array of choices. We research naturally derived ingredients that are good for the needs we are trying to help. For example, chamomile and valerian root are proven to help with sleep, so we add those to some of our sleep products. L-Theanine and GABA are wonderful for relaxation and calming the nervous system, so we added those to our DAY tincture. Vitamin B’s are great for the brain, so those are in our Focus Mints. We all need to be taking Vitamin D for health, that’s in our Buzz mints. Manuka honey in our HoneyShots is one of the most beneficial honeys in the world. All of our products have some other wellness component to them.
What categories are you excited about? Edibles, beverages, topicals?
Well, we have edibles with our HoneyShots and Little Helpers Mints, and we have beverages with our herbal tea. We have not gone into topicals, but we are coming out with a ready-to-drink in 2022. And some other categories too, but I have to keep that under wraps!
How can we bring more people in from the natural, wellness channels into the cannabis channel?
I certainly hope so! That is part of our reason for being. Trying to convince people that cannabis is not a drug. It is a plant, and used in sensible ways that are good for each individual, it can really help them. We are trying to debunk the perception that you have to get stoned out of your mind when you take cannabis. That is simply a fallacy, and we’re here to prove it.
How do retailers think about wellness products? Are they building out a special section as grocery might, or are the products interspersed regardless of positioning?
I have not heard of many retailers sectioning out for wellness products alone. Some do have a sleep section, but most don’t market that way. Wellness is a consistently growing segment of the market, and most women report walking into dispensaries to help with insomnia and anxiety. Those are wellness issues, fair and square.
Much like the natural channel has boutique shops, do you think there is a future in the adult-use cannabis world where small shops or retail chains will focus on only selling within the natural category as a differentiator? Something like a Pharmaca or the early days of Whole Foods?
We would love to see that. There are some more boutique style dispensaries popping up, and that’s fantastic. We are still very early days in the cannabis market, so it remains to be seen where this will all head in 10–20 years. Personally, I would like to see Kikoko sold in Pharmaca and Whole Foods, but we are a long way off that right now. The wellness segment is growing, but it is not the largest segment of the market yet. Although women report needing to sleep and feel less anxious, we are still at a stage in cannabis history where most people just want to get high. But we know that one day cannabis wellness will be national and it will be huge.
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