Headset co-founder and CEO Cy Scott says the future of the cannabis industry could look a lot like consumer packaged goods.
In an interview with Amanda Marie Goldston of CohnReznick at the Benzinga Cannabis Capital Conference on Thursday, Scott discussed the role that data plays in the marijuana industry.
The Growing Role Of Data In Cannabis: Since 2015, the year Scott left Leafly Holdings Inc (NASDAQ:LFLY), the sector has seen major changes.
With more and more brands popping up, it is no longer enough to just have a product, open a dispensary and sell it, he said.
A few years ago, “there weren’t a lot of branded goods on the shelves, everything was pretty vertically integrated [and] pretty medical at that time,” said Scott. For him, the increasing number of brands means data is increasingly important.
The market is more sophisticated, the Headset CEO said. The players in the industry are no longer people who come from a vertical market that previously produced marijuana, but are people from other industries who are jumping into cannabis, he said.
“These professionals from other verticals are used to looking at data to drive decisions. They were coming into the category and finding that there wasn’t much available,” Scott said. In this way, data started to play a bigger role in market decisions in the sector, he said.
Amanda Marie Goldston of CohnReznick and Headset CEO Cy Scott in conversation Thursday at the Benzinga Cannabis Capital Conference. Photo by Dez Smith.
Ultimately, cannabis is part of the CPG market, and the analysis of its data could be very similar. With cannabis being a newer market, it also shows promise for new ways of studying data and making decisions.
The Last Word: With this in mind, Goldston asked Scott what's next for the cannabis industry. Will its evolution tend to liken it to traditional CPG, or will it go to a different place altogether?
“[The industry] looks the way it looks because of the regulatory framework,” he answered.
In comparison to cannabis companies, traditional CPG does not have a lot of vertical integration, he said.
For Scott, in newer markets like New Jersey, vertical integration is still necessary. But, as the regulatory framework changes, cannabis brands will also evolve.
In the long run, “it will look a lot as it looks now, but we are pushing toward [traditional CPG]”, he added.
