INSIGHTS BLOG > How Do Information Ecosystems in Cannabis Compare to Those for Other Products?

Whenever I walk into a cannabis dispensary, I’m always overwhelmed by the choice of products available. 

[As an aside, one of my all-time favorite Ted Talks is one by Barry Schwartz on the Paradox of Choice, where he describes how having too many choices might be worse than just having a few.]

Given all the complexities associated with characterizing cannabis products and with trying to find the right product to meet your needs — whatever they may be — perhaps it’s not surprising that so much information and so many venues have emerged to discuss all this. 

But then I starting thinking about the phenomenon of the emergence of information sources – there was no government entity that responded to consumers’ need for guidance by directing that all these varied sources of information be provided. Rather, they all emerged organically as consumers and providers came together to respond to a real need. How glorious is that?!?

That led me to explore the different information sources, and the more I dug, the more impressed I became at just how broad and deep the sources of information are. 

My instinct as an economist is to wonder how cannabis differs from other products. The need for consumer information is nothing new, and there’s a plethora of different types of information sources that have emerged over the decades to help guide consumers of other products and services in their product selection. Working with an LLM, I put together a list of all the different types of information sources out there to help guide consumers for other products (see Figure 1).

[As an aside, being old enough to have a foot in both the pre- and post-internet world, I’m continually amazed at how much the internet has enabled so many truly worthwhile activities in the area of helping to inform and guide people — so many of the examples listed in the table emerged after the advent of the internet.]

Figure 1

After seeing the sheer variety of different types of sources out there, my next question was: How many of these different types of sources are available for cannabis?

Perhaps unsurprising to most people in cannabis, all of these sources exist in the cannabis industry to help inform consumers and producers (see Figure 2 – Figure 2 is a reproduction of Figure 1 with one additional column added, Examples for Cannabis).

Figure 2

My next question was: How usual is it for such a wide and deep availability of information to occur? That is, are there a lot of other products out there with such a vast ecosystem of information types? 

Nope. It seems that the closest other product to cannabis in this regard is automobiles. A third product that has a slightly smaller variety of information sources than cars and cannabis is smartphones. Fourth comes fashion apparel, gaming systems, and travel. The fifth group is entertainment media and fitness equipment and technology. 

Of course, all this begs the question: What do the products that have such varied sources of information have in common?

There are a dozen different factors that characterize these products, to a greater or lesser extent, and drive the creation of consumer information:

1. Market Fragmentation (High Choice Variety): Numerous options lead consumers to seek advice and compare choices, forming groups to navigate complexity and share experiences.
2. Tangible or Relatable Products/Services: Physical or experiential products are easier to discuss and compare, fostering emotional attachment and visual sharing that drive discussions.
3. Frequent Purchase or Interaction Cycles: Regular consumer touchpoints sustain ongoing discussions as users evaluate options or share updates.
4. Rapid Innovation or Market Changes: Fast-evolving industries generate buzz around new releases or trends, prompting discussions to stay informed or share updates.
5. Community-Driven Problem Solving: Products with issues or customization needs lead to groups where consumers troubleshoot or share solutions, sustaining technical discussions.
6. Platform Accessibility and Incentives: Easy-to-use platforms and incentives (e.g., likes, upvotes) encourage participation and sustain discussion groups.
7. Cultural Significance /Emotional Appeal: Products tied to identity or passion create enthusiast communities that bond over shared values, fueling vibrant discussions and loyalty.
8. Technical Complexity: Complex products require explanation or expertise, leading to communities where consumers share knowledge, troubleshoot, or optimize usage.
9. High Stakes or Investment: Costly or impactful purchases motivate research, validation, and sharing, forming groups to reduce risk or regret.
10. Information Asymmetries: When sellers know more, consumers form groups to pool knowledge, share reviews, or warn about subpar products.
11. Enthusiast or Hobbyist Culture: Products inspiring hobbies or fandoms create communities where users share expertise, mods, or achievements.
12. Social Visibility or Status: Products signaling status or publicly displayed encourage discussions for validation, trends, or inspiration.

I compared the number of these factors that characterize cannabis to those for other products. Cannabis and cars are the only two products that exhibit all 12 factors. Smartphones exhibit 9 of the 12; fashion apparel, gaming systems, and travel each exhibit 8 of the 12; and entertainment media and fitness equipment and technology exhibit 6 of the 12 (see Figure 3).

Figure 3

Adding a bit of nuance to the need for such a variety of information sources in cannabis, cars, and smartphones: 

• Cannabis’s unique challenges (e.g., regulatory complexity, strain variety, stakes for consumer health) require diverse sources, from user reviews to regulatory guidance. 
• Car consumers face all the difficulties (e.g., high stakes for purchases, technical complexity in EVs, choice overload with models), necessitating every source type to guide consumers. 
• Smartphones face most consumer difficulties (e.g., choice overload with brands, technical specs), but slightly less regulatory or advocacy focus, leading to slightly less variety in sources of information.

Finally, in addition to the breadth of offerings, there’s also the potential for greater or lesser depth. There are so many different ratings and discussion groups in cannabis. Do the other industries also have such depth of engagement?

As we might expect, there’s a high concordance between breadth and depth of information offerings (see Figure 4 – the numbering of products/services in Figure 4 corresponds to that for Figure 3). Cannabis, cars, and smartphones have both the widest and the deepest variety of sources relative to other products/services. Fashion apparel, gaming, travel, and entertainment media all fall into the second tier for both breadth and depth, while food/beverage, streaming services, and cosmetics fall into the third tier for both. The exception is fitness equipment/technology, for which technical complexity and consumer enthusiasm drive variety of information offerings, but its relatively small market size inhibits the depth of offerings.

Figure 4

Putting it all together, what we get is that cannabis products and the cannabis community are highly unusual. The only other products that are remotely similar to cannabis both in exhibiting multi-dimensional market complexity, as well as in stimulating such variety and depth of informational engagement, are automobiles. Smartphones are somewhat close, while all other products and services are much less prolific in stimulating consumer guidance ecosystems. 

Shockingly, while automobiles generate a similar amount of information activity as cannabis does, the automobile market is valued at over 30 times the cannabis market and has 5 times as many consumers (see Figure 5). The smartphone market, which trails cannabis in the volume of information it generates, is valued at 3 times the cannabis market and has 5 times as many consumers. In short, the relatively small cannabis market – and of course it’s phenomenal community – is quite unique in the impressive amount of vibrancy it creates. 

Figure 5