016: The Data Science Powering Cannabis Businesses with Liz Connors

The cannabis industry faces many unique challenges, and making sense of the data it produces requires specialized tools. To name just a few, there’s an astounding amount of product out there, tons of variables at play at every stage of manufacturing and distribution, and the nuances of legality across states.

To turn this information into data-driven decisions, cannabis businesses turn to Headset – a data intelligence company that specifically provides analytics for cannabis retailers, manufacturers, brands, and investors. It gives them the power to easily forecast the marketplace and create the reports they need to get ahead in a complex, crowded industry. 

Today, Liz Conners, Headset’s Director of Analytics, joins the podcast for a deep dive on this topic. You’ll discover how cannabis businesses discover the trends that shape this industry, what Liz has seen develop in her home state of Washington, and what’s changed for Headset’s clients since the onset of the COVID-19 crisis.


  • The learning curve that sets cannabis apart from other industries when it comes to analytics.
  • The unique data Headset provides businesses that can’t be collected from other cannabis POS systems.
  • Why it’s so hard to collect honest, accurate data from cannabis users. 
  • How data and analytics add legitimacy to the cannabis industry on a national level.
  • Why Liz foresees more states moving to adult use in the near future.


We can always learn from people that came before us even if it’s not a perfect correlate to what we’re doing today.” – Liz Connors

I’ve never said no to free advice my whole life. So, the worst you have to do when you get advice is not listen to it, right?” – Liz Connors




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Rick Kiley: All right, we are ready to go. Hello, everyone, and welcome back to The Green Repeal. I am one of your co-hosts, Rick Kiley. I am joined again as always by Jeffrey Boedges. Good afternoon, Jeff. 


Jeff Boedges: Thank you, Rick. Greetings everyone from the bunker. 


Rick Kiley: From the bunker. We’re here today, we’re speaking with Liz Connors, who is the Director of Analytics for Headset. And, Liz, welcome to The Green Repeal. 


Liz Connors: Yeah. Thanks for having me. 


Rick Kiley: That is great. We’re excited to have you mostly because I’m a data doink and I love numbers. I was a mathematics major when I went to college and love digging in. 


Jeff Boedges: I took some math in college. 


Rick Kiley: Yeah. Yeah. It’s good. It’s good. So, as we jump in here, just like Director of Analytics for Headset, can you tell us who you are? Give us a little bit about your background. How you arrived at that role? What is a director of analytics? What is Headset? Let’s answer all these questions, just get them out there. 


Liz Connors: Yeah. Absolutely. That’s a lot all at once. Let me tell you who Headset is first. So, Headset is a cannabis data intelligence company. That means that we provide business analytics solutions for cannabis operators. So, it could be a retailer, it could be a brand or manufacturer, or could even be an investor in the space. For retailers, we have tools that take their very own data so data from their point-of-sale systems and give them business intelligence software for them to better make decisions to make data-driven decisions. For manufacturers, producers, investors, we have market data. So, me and my team create a product-level daily forecast for what’s being sold in the marketplace. We roll all that up into tools that help you answer questions like what products should I make next? Is the market becoming more or less competitive? What’s growing? What isn’t? How should I price? Am I priced too low? Am I priced too high? All of those kinds of things. 


Rick Kiley: Got it. Got it. That’s great. 


Jeff Boedges: Very effective use of puns during your definitions, by the way. Good plays on words. 


Rick Kiley: Cool. And so, how did you come to work at Headset? What led you there? Where were you before? What were you studying? Where are you working? What’s happening? 


Liz Connors: Yeah, for sure. So, after I got my MBA, I went into consulting and I was a statistician. That was because they hadn’t come up with the data science term yet. It was same type of work as data science, just a different title and they paid us less. None of the cache. And a few years into that, someone coined data science so it really worked out for all of us statistician. 


Jeff Boedges: Marketing science, that’s our new name. They will make more money.


Liz Connors: Yeah. It’s all about the spin. Yeah. So, once marketers decided to spin what we do, there was just this kind of big opening in data science in the marketplace in the 2009, 2010. A whole lot of people were looking for people that knew how to use big data and even what the word, big data, meant. So, I left my consulting job and I went in, I worked at various companies. I worked for the Federal Reserve for a while. I worked for Capital One. And then I landed at HEB, which is a grocer in Texas, and started doing CPG retail analytics, which was outstanding. I really loved it. I loved the consumer behavior aspect of it. I love trying to bring some of these bigger statistical ideas to an industry that’s hundreds and hundreds of years old. So, it was really interesting to kind of marry this like new science that were coming up with these new data techniques with grocery retail, right? 


So, I did that for a while and then I started my own consulting company, working mostly with small businesses that did direct-to-consumer. So, they maybe had a website where they were selling products. Because even small businesses can afford to have a whole data scientist there. You know, it’s a whole lot of people to have a new payroll. You might not even need that much work, just a bit. To me, I thought what I could do is build solutions that small business owners could use to better understand their own business and make better decisions. So, I did that for a while, while I was working on a Ph.D. in managerial decision making. And from my business, I found the guys at Headset and I worked as a part-time kind of contractor for them for a couple of years. And then about a year-and-a-half ago, they needed a director of analytics to come over and I thought that this sounded great. You know, thousands of small business owners in cannabis all that need data and they need it fast and probably aren’t going to have giant analytics teams. That was a good marriage of my skill set. 


Rick Kiley: Very cool. 


Jeff Boedges: All right. So, sorry, Rick. 


Rick Kiley: Go. You do it. 


Jeff Boedges: No, I was just going to ask you. So, give me a contextual example in CPG or in grocery where you’re able to provide or were able to find some sort of trend from the numbers that these guys can activate upon? So, for our listeners who maybe don’t understand exactly what value it is that they get out of this data.


Liz Connors: Yeah, for sure. An example like from CPG, for instance? 


Jeff Boedges: Yeah, that’ll be fun. 


Liz Connors: Yeah, absolutely. Gosh, what’s one of the good ones? One of the cooler projects I worked on in CPG was an analysis of what people are buying and how we can have marketing campaigns to influence people to purchase more fresh produce or fresh meat. So, kind of getting people out of the center aisles of the grocery store, and maybe purchasing more healthy goods. So, what we would do is we would analyze purchase behavior of people to try to find pockets of people that might be on the edge like they really don’t purchase a lot of those types of products but they might be likely to if we could kind of influence them with either recipes or discounts or that kind of stuff. So, we built those and then we built some marketing campaigns to give information about how to eat more healthy and how to prepare some of those items. And then we’re able to influence people to eat a bit healthier through our marketing. 


Jeff Boedges: That’s great. That’s very cool. 


Rick Kiley: Cool. And so, you mentioned going for your Ph.D., or are you Dr. Connors? 


Liz Connors: I am not Dr. Connors. I finished my coursework, but I went and came over to Headset. 


Rick Kiley: Cool. Got it. So, that was like the Major League Baseball assignee before you go to college kind of thing. Got the big signing bonus and you’re like, “All right.” 


Jeff Boedges: You can always go back and write your thesis. You can always go back and defend. 


Rick Kiley: Yeah. 


Liz Connors: For sure, yeah. 


Jeff Boedges: I’ve lived through it, not because I have it, but my wife has her Ph.D. After the coursework and before the thesis was probably a three-year hiatus. 


Liz Connors: Oh, yeah. For sure, it’s a lot and you really have to, you know, I was in a program where I thought I wanted to stay in academics, which I still love academics. I still actively do research projects, but you could move so much faster in private business. 


Jeff Boedges: And get paid. 


Liz Connors: Yeah, I know. For sure, yeah. I missed how fast-moving it was.


Jeff Boedges: I understand. Alright, cool. 


Rick Kiley: Cool. So, in terms of talking about Headset, we’ll get into what it does. You mentioned several things, but who are your primary customers? Are you mostly working, I mean, you mentioned the attraction to working with small businesses. Is it mostly the dispensary? Is that at like the retail level? Are you working with the manufacturers, other groups, perhaps some of the extractors? How’s your business organized? 


Liz Connors: Yeah. So, we do work with all of the types of businesses you listed. Right now, for retailers, for instance, I think we are connected with 4,000 retailers across the United States and Canada. 


Rick Kiley: Okay. Wow. 


Liz Connors: Yeah. So, really large chunk there. And like I said, for retailers, we mostly provide retail analytics. So, analytics tools that help them understand, are they staffed properly? Are they managing their inventory correctly? Are they having stock-outs? Are they running out of stuff? Or do they have too much in stock? When you buy things and take them into inventory, that’s your working capital. And so, optimally having enough so that you don’t run out, but not too much so that you don’t have too much capital tied up, and there is a really fine line. We provide marketing analytics. So, how well are maybe the referral campaigns working? And we even get into basket analysis. Basket analysis is one of my favorite things you can do with data. That type of analysis is, for instance, people that buy flower often buy pre-rolls, right? Kind of similar consumption methods. But what you can do is go in and analyze to see do you need to try to get more people to put a pre-roll in their basket? We think about that in CPG a lot. 


Like, those candy bars right by the aisle when you’re checking out, groceries have known that that’s where you put candy bars and magazines because they’re impulse buys. We take that type of knowledge and make sure that we’re putting lighters near the register because that’s also an impulse buy that a lot of people will need or how do we get even 5% of our basket more of our baskets to have pre-rolls in them? Because that increases their basket size, and inevitably our profitability. So, that’s retailers. And then for brands, manufacturers, producers, even investors, we do forecasts so we say how big the market is. We say what brands are doing well, what products are doing well. We did a ton of COVID analytics, for instance, helping people understand that larger package sizes especially in flower are growing a lot right now. So, if you’re a brand and you know you’re about to go packaged this week, maybe you want to make a bit more ounces or half ounces, maybe a bit fewer of your just one-gram packages.


Rick Kiley: Got it. I’m curious on the retail side and I think just because I’m curious about the people who are working in this environment, are you finding the retailers coming in with a level of sort of expertise and experience working in other similar, maybe not similar, but other retail environments so that the type of analytics you’re offering are familiar to them? Or are you finding the learning curve different in this industry more so than some other traditional industries? I think I’m trying to get at like is there may be significantly more entrepreneurship in this world than professionals who are kind of really have grown up in some of these other industries? 


Liz Connors: Yeah, for sure. Typical analysts and say a little bit of both, they have bag of really big MSOs that do even have whole analytics departments now, all the way down to there’s still a lot of independent operators or maybe they just have three or four chains, three or four stores that…


Jeff Boedges: Bigger chain. Yeah, small chain. 


Liz Connors: Yeah, for sure. So, I would say data literacy here maybe isn’t quite as high as in other places, but for the most part, people I’ve met in cannabis it’s a very intelligent group of people. It’s a group of people that had to be super scrappy and innovative to get anything to work. So, I think at least to me, the people that or all the people that I encountered even if data literacy wasn’t a big part of their career before they’re able to synthesize it, put it in place. And we work really hard at Headset to make things be easy to understand. And we know that there probably isn’t a whole analytics department but that doesn’t mean that you can’t have really good insights and make data-driven decisions. It just means you need someone to set it up for you ahead of time. 


Rick Kiley: Got it. 


Jeff Boedges: So, from the data side, I know that the data privacy now is a huge concern in the United States and you could get a law degree in data privacy now, probably about a million different ones. So, when you guys are doing that kind of thing, usually unlike CPG, there’s a mix of stuff that’s private, can’t touch that data, and some that I can go ahead and send the offer for healthier food to Bob Smith at 12 Main Street. So, I’m kind of curious where things are with cannabis right now as far as that goes. 


Liz Connors: Yeah. So, I mean, data privacy is always evolving for sure. For us, at Headset, only retailers have access to their own data. So, no retailer’s data can any other retailer see. We have really strict privacy around that. And everything else that we do is more market forecasts. So, it’s about the total marketplace. I created and anonymized all of those things. So, we do offer market analytics about, for instance, what products appeal more to women than to men or which age group is growing in the market? What do Gen Z want? How’s it different from millennials? But to do all of that, we use totally anonymized data. I wouldn’t be able to say, “Liz Connors, anything about me?” What I would know is a 35-year-old female buys a whole lot of beverages to people in her demographic. This girl must really prefer the beverage segment for some reason. 


Rick Kiley: Got it.


Jeff Boedges: Got it. 


Liz Connors: So, what we do is we never talk about me as an individual. We talk about how my…


Jeff Boedges: Representative, yes. 


Liz Connors: Yeah. So, is my age group, does it over-index in beverages, or does it over-index in gummies? 


Rick Kiley: Right. And it looks like from the modicum of research that I did on your company that you’re working mostly in adult-use markets. Is it exclusively adult-use markets? Are you involved in the medical side at all? 


Liz Connors: So, for our market forecasting, we only do market forecasting right now in adult-use markets in the US and in Canada. But for retailers, we do retailers in medical markets as well. So, many are located in states like Florida or Arizona or Oklahoma. 


Rick Kiley: And are you synthesizing the medical sales data in that sort of like larger report, sort of understanding what different segments of people are looking for in terms of intakes and the way that they’re consuming? 


Liz Connors: Yeah, for sure. So, we do look at it a little bit. It’s usually more in reports than in our kind of state insights product but for sure, it’s something that we look at. 


Rick Kiley: Cool. And is the data that you’re collecting coming from the point-of-sale systems like at each retailer location? 


Liz Connors: Yeah. We integrate with, I think, oh, I always get the number wrong. I’m not on our sales team. Maybe 20, 22 different point-of-sale systems. So, we built those integrations. So basically, what it means especially if you’re a larger retailer and let’s say you’re using three different points of sales in three different states, you can have all your data come into one place and be seen all together, that you have to log into a bunch of different systems. And it’s all normalized. It makes it so that you can really analyze multi-state business or even just maybe you picked one point-of-sale a year ago, you don’t want to switch it, and you opened your new store or you have a different one. Or maybe you switch point-of-sales but you want to see both sets of data together the historic and that would lead you to do it all. 


Rick Kiley: So, you’re already starting to answer my next question, which was like what’s the data that Headset provides that they can’t get from their own point-of-sale system? So, I didn’t realize that that there might be companies and organizations that are on multiple point-of-sale systems. That seems a little bit kooky to me, but I guess there’s reasons for that. But can you maybe just like in a digestible, like snippet here, like highlight what can’t they get from their own point-of-sale system that they couldn’t sort of export and look at themselves that they can get with you? And I imagine a lot of it is like ease and digestibility of the content but is there anything specific that you are able to deliver that they can’t get on their own? 


Liz Connors: Yeah, I mean one is if you have multiple points of sales, it laces everything together. I think the bigger thing is when you think about a point-of-sale system, you know, point-of-sale systems are very good at doing things like keeping you compliant with regulations, good at having the menus up. They’re not necessarily good at your analytics and I don’t know if you would want them to be. I don’t know that you would have been problem hiring electrician. Electricians are really only good at electricity. So, when you need the analytics… 


Rick Kiley: I don’t think you’ve met my guy. 


Liz Connors: Oh, yeah. Right. Yeah. You got a good one then, huh?


Jeff Boedges: He delivers things in a black plastic trash bag in New York.


Rick Kiley: Yeah. 


Liz Connors: I mean, that’s the thing like everybody’s got all different businesses, things that they’re good at. And so, what Headset is really good at is taking your data, making it actionable so that you can have the information you need to drive smart business decisions. I think most people look to an analytics provider for that. You could, I mean, anything that I make, you could download all of your data out of your point-of-sale system. I have a team of seven that helped me do it on the enterprise tools at my disposal because I am built for 1,000 people. And so, one, the expensive analysts, enterprises tools, even just knowing what to show. You have some experience in retail? We know the things that are most important when. And so, I think that’s why people lean on us is that expertise. 


Rick Kiley: Got it. 


Jeff Boedges: So, are you providing the insights as well so you’re selling a lot of X and not a lot of Y but you should be selling more Y because it’s got a better margin on it and you need to rearrange your store this way? Are you getting down to that nitty-gritty where you’re kind of helping these folks design this place? 


Liz Connors: Yeah, absolutely. We actually have some stuff even for people that haven’t been on to retailer yet but maybe become a retailer. You have analytics of the market to help them decide things like how much inventory should I order for my first order? 


Jeff Boedges: And what about like package designs? So, one of the things like I’ve seen a tremendous range of pack design and they go from this looks very much like something I could definitely buy at Whole Foods and then you get some things that looks like you bought it off the back of a truck at a Grateful Dead show. So, I mean, sorry, aging myself. Who’s the best jam band now? Fish? I guess, they’re still together. But the back of a truck at a Fish show. No? Are you guys offering advice on package design based on your insights? 


Liz Connors: We don’t do much of it, though, we do a lot of custom consulting with people when they’re trying to decide where they fit in the marketplace where we for sure bring up. What we’ll do is we’ll analyze and say your brand, perhaps your brand of mints are selling really well with people over 65 compared to when we look in the marketplace, a lot of other brands are selling more of millennial or Gen Z. And so, we will look to the package sizes and kind of say just things about the brands. But we don’t necessarily do like consumer survey research. 


Rick Kiley: Okay. So, what are the steps you’re taking? You mentioned this sort of custom reporting. Are you determining what your customers need based on what they’re asking for? Is there like a general suite and then like of like information and then a custom suite where they’re like, “I really want to know about XYZ?” How are you arriving at like the data that you’re giving them? 


Liz Connors: Yeah. So, we have tools that are just plug and play like you could have a subscription and today log in and it’s all right there and it’s the same for everybody and those are things that we know that everybody needs. So, just really understanding are prices coming up or are prices going down? I brought up the package size, right? Are we moving into bigger package sizes because of COVID? Are customers that buy edibles, are they more likely to also buy pre-rolls or is it vapor pens, right? These things are things that probably everybody in the space needs to know. And then there’s more fine things that we need to dig into and those are usually pretty custom, though I will say not to sound too jaded, but for the most part, people in the world when people have a problem you’re rarely the first person with a problem, right? 


Rick Kiley: You haven’t heard a new question in a while? Is that what you’re saying? 


Liz Connors: No. For the most part, there’s a lot of… And you know cannabis has its own special very, very specific… 


Rick Kiley: Let’s try to come up with one right here. 


Liz Connors: Sure. Yeah. 


Rick Kiley: Yeah. All right. Let’s see. 


Jeff Boedges: I have one. I have one. So, do you have any way to follow the behavior of the people after they leave the store like where are they going and spending their money after they’ve tried some of that fabulous flower or pre-roll or edible? Are you guys taking that type of information as well? 


Liz Connors: So, we do. We can follow that when they come back to the store. So, for instance, if you came in today and bought flower brand A, what’s the likelihood that when you come in next time, you’re going to buy flower brand A so that’s things like how sticky a customer is, maybe their repeat purchase rate. What you do… 


Rick Kiley: But nothing on the cannabis grilled cheese sandwich ratio? 


Jeff Boedges: Yeah. Or Girl Scout cookies? Yeah. 


Liz Connors: No, not really. So, we do work with Nielsen, who does a bit of that so they’ll ask like, “Why did you purchase this? Is it for…?” Well, they have a very nice term. “Is it for experience enhancements? Or what is it for?” So, they have a whole lot of those things. They even do stuff like people that purchase certain types of cannabis, maybe what are things that they buy more of when they do go to grocery stores?


Jeff Boedges: They buy all the Oreos. 


Rick Kiley: I think Nielsen…


Jeff Boedges: Sorry. Go ahead. 


Rick Kiley: I think Nielsen just watched the movie Half Baked and there is that section on the different types of stoners. They just took the categories from there. I think Jon Stewart was the experience enhancer guy. He’s like, “Have you ever watched it on weed?” 


Liz Connors: Oh, yeah. 


Rick Kiley: That’s so funny. You came up with a much better question. I was going to ask something like random like, which is the best one to give to my dog? Did anybody ask that? Just wanted to stump you.


Jeff Boedges: Anybody listening from the animal cruelty society, please don’t call us. 


Rick Kiley: You’ve gotten that question before?


Liz Connors: We do. There are a lot of CBD pet products. For sure, you see that THC is not for dogs but we do get a lot of…


Rick Kiley: THC is not for dogs. That’s a T-shirt. 


Jeff Boedges: That is a T-shirt for sure.


Liz Connors: You know, we do get a lot of like what treat flavor goes best with CBD like I don’t even know how to ask a dog about it. He eats garbage off the street. He’s not very discerning. 


Rick Kiley: Maybe that guy’s asking for… 


Jeff Boedges: He works a lot of parts. 


Liz Connors: Yeah. He licks his own butt. I don’t know that we can…


Jeff Boedges: Yeah. You can’t trust his taste. 


Rick Kiley: All right. So, one thing that’s come up a lot especially in the adult-use markets because of and you talked a lot about pricing so that’s why I want to ask this is that the existence of the black market is still there partly because the retail prices are so high which we know is a result of a lot of different factors including still the fact that it’s federally illegal and no one running the business can write off in either business expenses, but are you recording on the black market as part of your pricing strategy analysis?


Liz Connors: We don’t do a ton with black market. For sure, you can see it’s impacted some places. One, it’s really difficult to connect to black-market point-of-sale systems for sure. 


Jeff Boedges: Yeah. It’s more challenging. 


Liz Connors: Yeah, absolutely. And it’s difficult to get people on it like through surveys to honestly report on their illicit behaviors. Illicit behavior is something that we notoriously underreport on as people. If you look at surveys at all, the number of people that go to the gym and eat salads for lunch, just that can’t be true. We wouldn’t have the obesity. 


Jeff Boedges: Every doctor’s appointment I’ve had in the last three years. They ask you, “Do you use illicit drugs?” I’m like, “No. Of course not. What have you heard?” Yeah. 


Liz Connors: Yeah, right? Yeah. You know, we tend to answer surveys with our best selves in mind. Maybe not our actual selves. And so, for the black market, what I will say is there are, for sure, prices that are cheaper on the black market. That is true of moonshine, too. So, instead of having your Manhattan tonight, you can go out and buy moonshine for a lot cheaper because they don’t pay the taxes. 


Jeff Boedges: Moonshine can make you go blind, and it can kill you. I don’t know if you can get blind or dead from the pot. 


Liz Connors: It’s not tested and it’s not consistent but the stuff that the marijuana that’s in stores is tested and its product is consistent. And so, I do think as people start to look for, “I want the same experience every time. I want something that’s predictable. I want to know what’s been tested. I want to know that there’s not vitamin E acetate, for instance, in vapor pens,”

you really can be a lot more confident of that in retail stores. Same that’s happened with alcohol. 


Rick Kiley: Yeah. No, I get it.


Jeff Boedges: Acetate and alcohol. No good.


Liz Connors: No. 


Liz Connors: They’re putting vitamin D in there now. 


Jeff Boedges: I’m sure they are. Yeah. 


Rick Kiley: In alcohol? I hope so.


Jeff Boedges: It’s 2020. It’s the year of the bad idea so why not?


Rick Kiley: Yeah. I’m going to stop trying to come up with good ideas because they get blown up. Yeah. 


Jeff Boedges: The worst it is, the better chance it’s going to be on the front page tomorrow. 


Rick Kiley: So, I think maybe THC for pets. 


Jeff Boedges: Yeah, for sure. I mean, look, they got those begging strips. I mean, I could see that being like the perfect place to put some THC. 


Rick Kiley: Oh my god. How fat was your dog? 


Jeff Boedges: I don’t think my dog can be fatter. 


Rick Kiley: A dog with the munchies would not be a good idea. All right. Let’s bring it back here. So, how do you guys monetize your business? Is a licensing arrangement with folks? Are the custom reports like just one shot extra like how does that work? 


Liz Connors: Yeah. So, for the most part, we’re a SaaS provider, a subscription as a service. So, you would buy your products for a year, for two years, but we do also have some non-subscription products more like how you would have a consulting engagement with like Deloitte let’s say or Nielsen. So, we do a little bit of both, but by and large, most of our revenue comes from subscriptions. 


Jeff Boedges: I have a new marketing idea, Deloitte Kush instead of, yeah, just a little play on words. 


Rick Kiley: That’s branding.


Jeff Boedges: I’m a marketing guy, man. These ideas they come to me. 


Rick Kiley: Yeah. Well, the name Headset, you really have to find the connection there. It’s good. You brought up the Grateful Dead earlier so the Dead Headset, I don’t know if that’s how you got your brand. 


Jeff Boedges: Just Head. Anybody’s a head.  


Rick Kiley: I’m just guessing. 


Liz Connors: Yeah, I think the way that they came up with it was kind of head shop and then like a data set. Yeah. The data set. 


Rick Kiley: Cool. So, one of the things I love about data is being able to use it to debunk myths and I have a feeling that there are several myths that exist in the world of cannabis. Like, THC is good for dogs. But I’m curious if you’ve come across, what I’d love to know is someone who’s looked at the data, are there one or two commonly believed things that you know are myths that you’ve been able to or had to debunk from people because you’ve seen the data that proves otherwise? I don’t know exactly what that is but like everyone’s using vape pens because they’re so cool. I know that’s a bad example because I actually know the answer to that one. But are there any myths that sort of fit in the world that you could share? 


Liz Connors: Yeah, for sure. So, I think one that recently has cropped up a lot is that as COVID is kind of taking hold, we have high unemployment rates, a lot of economic uncertainty that people will regress back into like really cheap cannabis. So, that value price items will be doing super well. And when we are seeing people buy larger package sizes where you can see a bit of economy maybe there. For the most part, especially in edibles, we see the more premium ones actually doing quite well during this time. Yeah, I think especially everybody’s trying to comment right now how the kind of like impending perhaps recession will impact cannabis. When you think about cannabis, it really isn’t a terribly expensive product. And especially right now there’s not many places for us to go or new and interesting for us to do. And so, it has been pretty interesting watching people change their consumption patterns, maybe not the way that’s super predictable.


Jeff Boedges: I think I got to go back to the enhancement idea here. I think I should start marketing for specific shows. I’m just going to get that one too. So, it’s like, you’re going to watch the… 


Liz Connors: There is a brand out here in Washington that markets their vapor pen cartridges with a playlist. And so, each individual strain has a playlist. 


Jeff Boedges: I like that. I love that. 


Rick Kiley: That’s interesting. That’s so curious that you say that because we work a lot on the alcohol beverage side and while alcohol beverage in the off-premise is doing very well, everyplace else is doing terribly but people are avoiding spending as much. So, they’re still consuming a lot but they might be buying the $20 to $25 bottle of booze instead of a $30 to $40 bottle of booze. I imagine I think that’s because actually there’s the belief or knowledge that there’s high-quality alcohol beverage product available at that price point. Did you think that there’s a big perception difference or actual quality difference between the more expensive-grade cannabis products and the cheaper stuff? Or I don’t know if that’s a perception or actually like a reality because I could see someone being like, “Look, I want to get the good stuff because I only need to take X and it lasts me longer,” or something like that. I’m curious if there’s like a definite quality difference at those price points.


Liz Connors: Yeah. I mean, I’ll just speak to myself. I for sure think that there are, and I think here’s another, I don’t know if it’s a myth but a data point I find interesting. In Washington for instance, where I’m from, the average cannabis retailer has about 5,000 SKUs that they’ll stock throughout a year. In contrast, a Trader Joe’s only has about 4,500 so these stores have wicked assortments. And there’s just a ton of product right now especially not a lot of people are going into the stores have been clicked to collect online so you don’t have the expertise of a budtender there to help you as you’ve done before. And so, I think people are leaning back on things they know or go to be consistent. You know, cannabis isn’t terribly expensive, but I don’t want to spend $30 on a package of gummies if I’m not sure what the experience is like I believe. 


Rick Kiley: That makes a lot of sense. 


Liz Connors: The world is so unpredictable right now, let me just predict when my gummy will get it. 


Rick Kiley: Right.


Jeff Boedges: Yeah. 


Rick Kiley: No, no, no.


Jeff Boedges: We’ll just keep eating them. 


Liz Connors: Yeah.


Rick Kiley: No, that’s a good point. You know, we’re in a burgeoning industry, let alone category and one where like even brands themselves are in their nascent. So, I could totally see the risk factor playing into people’s purchase decisions now. That’s smart. Thanks for that. So, I mean, we’ve talked COVID a couple of times. So, I’m asking the question everyone’s asking you, how has COVID-19 impacted cannabis sales? Actually, I have it written right here. You’ve answered one of them already but is there anything beyond people sort of gravitating towards what they already know really well? Any other trends you think that are changing in the industry? 


Liz Connors: Yeah. I’ll speak to maybe two different trends. So, one, just when we think about the industry as a whole, states like Washington and Oregon are doing exceptionally well. They actually have larger year-over-year growth than they did before. And when you look at states like Nevada, we’re seeing the sales kind of really, really fall there. One of the biggest reasons we see that happening is because, in Nevada, about 80% of cannabis sales were occurring in Clark County which is where Las Vegas is and the casinos are closed. The airports really aren’t doing many flights. Nobody’s traveling. And so, there, where it was much more like kind of this pop tourism and where their sales are coming from, we see sales really down compared to a state where ain’t nobody taking vacation to Washington in March. 


Jeff Boedges: There’s some skiing there. There are some skiing there. 


Liz Connors: Yeah, for sure. But we weren’t this like spring break destination.


Jeff Boedges: No. 


Liz Connors: So, we do see quite a big difference there. One difference that I think happened quickly and might stick around a little bit is the difference in pre-rolls. So, many categories are doing quite well. So, flower is doing very well. Edibles are doing very well. Pre-rolls aren’t but when you think about pre-rolls, a lot of…


Rick Kiley: Oh, we lost you there, Liz.


Jeff Boedges: I thought that was me. 


Rick Kiley: No.


Jeff Boedges: That’s not the first time. 


Rick Kiley: Hold on, Liz. Okay. You came back. 


Jeff Boedges: You’re back. 


Rick Kiley: You’re back. I don’t know. You froze up there. So, yeah, that’s great. Pre-roll, you’re like what’s been happening with pre-rolls. 


Liz Connors: Yeah. And I left you hanging. So, when you think about a pre-roll, a lot of times we consume these by sharing with others. We’re not gathering in groups to share even when we’re able to so let’s say tomorrow everybody said it was safe to gather in groups again. I don’t know they’re going to want something that was in someone else’s mouth. It came a whole lot of someone else’s mouth. And so, what we see is like the bigger joints, you know, the one gram joints. Those really haven’t seen the sales that they used to, but the people that are on multipacks or the half gram joints, those are actually doing pretty well. And so, we could have a fundamental shift in purchasing these products. 


Rick Kiley: That’s so interesting because it’s such a communal product for so long. 


Jeff Boedges: I feel like there’s a technology answer for that though because I feel like people could have their own mouthpiece and you pass the do but it just goes into a different mouthpiece. 


Liz Connors: Yeah. Those…


Rick Kiley: Kind of like a mountain condom? 


Jeff Boedges: Yeah. A fancy cigarette holder. That’s right. 


Liz Connors: Yeah. Those fancy like the ladies from the… 


Jeff Boedges: For sure. 


Liz Connors: Yeah. 


Jeff Boedges: Yeah, man. Look at Laurel Canyon videos that are up right now. They’re all using them.


Rick Kiley: Interesting. All right. 


Liz Connors: So, perhaps a good market opportunity for someone there if you’re…


Rick Kiley: Or just bored. 


Jeff Boedges: Or maybe you want to look really fancy. I mean, I think even just the fancy market. 


Rick Kiley: Cool. So, I mean, I don’t know if there’s like been a dramatic enough shift but so in general though, is flowers still ruling the roost in adult-use markets? So, it’s flower then what’s next?


Liz Connors: Then I think in almost every market would be vapor pens. 


Rick Kiley: Okay. Even with all the vape pen scares, that sort of thing, you feel like people are still vaping? 


Liz Connors: It is, yeah. So, what we saw was during, I think, it was August and September, where we saw vape pens. We did see vape pens, vapor cartridge sales really take a hit. They pretty much recovered at this point. And I do think actually, I brought it up before but for people that are consuming vapor pens, one of the things we found was this vitamin E acetate. It didn’t seem to be linked to a lot of it. Now, if you’re buying it in a retail shop, usually it will say doesn’t contain it. It’s been tested all of these things. So, I think it might have pulled some people out of the legacy markets, illicit markets, and into regulated channels just because they were fearful of health repercussions. 


Rick Kiley: Got it. Cool. 


Liz Connors: We did see during COVID maybe like mid-March when no one was really sure or how respiratory this was, we didn’t see anything inhalable except for flowers. So, vapor pens are good. Decent… 


Rick Kiley: Right. Now, we had a gentleman on who’s on the medical side of the industry and an activist who had said he’d seen some data about it actually helping alleviate the symptoms and treat some of the coronavirus, at least on the CBD side. I’m just curious if you think…


Jeff Boedges: I think it was really lung ailments in general that helped relax some of the spasms that were caused by these inflammatory diseases with a, I’m sorry, I’m going to screw it up, the uvula would swell and then when you would put the THC cannabinoid on there. Sorry. I’m not speaking well today but…


Rick Kiley: Cannabinoid. 


Liz Connors: Cannabinoid, thank you, would actually relax that and actually help people to fight those symptoms.


Rick Kiley: Yeah. It was just interesting. So, you talked about, alright, the pre-rolls because we’re not sharing any sort of the communal stuff like that’s a shift from COVID. People buying in larger quantities so that they’re presumably shopping less often I would guess, right, minimizing their trips. Any other like major shifts in how people are consuming or shopping right now?


Liz Connors: So, say we did see a lot more Gen Z come into the market. Gen Z is aging into the market, I think they’re 24 the oldest right now so the ones just below millennials, but we do see them coming into the market a bit more right now. And then the only other thing we saw, topicals not doing quite as well during this time. Generally, those are marketed either for pain or for like a skin cream. A lot of pain comes from being on the job and we have a lot of people on the job right now. And then wrinkle cream, that’s a free filter for me right now on Zoom. I don’t really have to spend a lot to keep my wrinkles hidden.


Rick Kiley: Wait, I think I need that. What’s that filter? I was trying to have someone talk about the bags under my eyes earlier today.


Liz Connors: There’s a handful of filters that just, yeah, to make it nice and airbrushed. 


Rick Kiley: I’m going to do the sunglasses trick next time. I think you’re pulling that off well. I like it. Cool. So, I’m just curious and you maybe you don’t want to give this away but if someone were getting into the industry right now, is there a piece of sage advice or perhaps a word of warning that you might be able to provide based on like what you’re seeing? Like, is there a glut somewhere as like, “Hey, guys, we don’t need any more sodas right now because, holy crap, there’s 6,000 and nobody knows what they do and nobody likes them.” Is there any easy ones that’s something for you to give that you could tease people with?


Liz Connors: Yeah, for sure. I think the easiest ones is sort of a cop-out answer but if you are starting in the marketplaces, look at the other states, especially as new states legalize, you’ve got places like Washington that has been legal first six years. You have a six-year test run to see what consumers want. And so, what I see a lot of and I definitely saw it in Canada for sure was a lot of people didn’t use any data and came up with forecasts that 20% of sales are going to be the capsules. Well, in the US, there aren’t any states where that’s above 2% or 3% at most. It’s not a very common recreational way to consume cannabis. And I think there’s a whole lot of these. I think even if you’re in a state that has been legalized for a while, you can still look to other states. There aren’t many multi-state operators. And so, a good idea can pop up in California and if you’re a truly shrewd and enterprising person in Washington, you might be able to grab some of that and bring it over here, especially because it’s difficult to get licenses across states. Multi-states are relatively foreign. 


Rick Kiley: Okay.


Jeff Boedges: Yeah. Most of the licenses are actually per, well, they’re all per state for the same company to get licensed and it’s just, for some reason, a black mark on them.


Rick Kiley: Yeah. It’s disappointing to hear about the capsules. It’s going to mess with my suppository idea. 


Jeff Boedges: Yeah. That’s 2020, the year of the bad ideas.


Liz Connors: Yeah. I wouldn’t go all in, for sure. 


Jeff Boedges: But that’s a social one when you’re hanging out with friends. 


Rick Kiley: Well, you can’t pass the joint anymore.


Jeff Boedges: That’s how you give it to your dog, actually.


Rick Kiley: That was good. 


Liz Connors: My dog is hiding under my desk here. 


Jeff Boedges: Yeah. Rover, dad’s got something for you. 


Rick Kiley: Yeah. So, you mentioned like working with Nielsen and Deloitte. I think it’s kind of like a two-part question. Do you think that you need that your business partly fills a need to enhance the perception of the cannabis industry as a whole that it’s like a real industry? Do you feel that like applying data analytics to the industry helps with the image of the industry? I think that’s one. And we’re curious if like working with institutional data companies that have been around for a long, long time, does that help sort of elevate that status as well? I’m just curious. 


Liz Connors: Yeah. I mean, I think on the hierarchy of needs for business, sometimes data doesn’t come first but I think, obviously, I think it should and I think that adding more data analytics, for sure helps. But I also think even just having analytics companies providing numbers for the broader marketplace to know about California is like a $3 billion market. Canada’s already annualizing more than $2 billion a year, and they just rolled out 2.0. And so, I think having people that provide information, provides knowledge to the world as a whole, which does always help to put things into perspective and make people realize how large something is. If you live in a state like Indiana, maybe you’re not sure how much of this exists and to be able to compare that by getting real numbers I think is pretty important. 


Adding Nielsen and Deloitte, I think that they are companies that have been around forever. We can always learn from people that came before us even if it’s not a perfect correlate to what we’re doing today. These are people that have been in the marketplace and been successfully helping businesses for many years. I’ve never said no to free advice my whole life. So, the worst you have to do when you get advice is not listen to it, right? 


Rick Kiley: Sure. 


Liz Connors: For sure, there’s always something to learn. 


Jeff Boedges: I would think also, though, even with like governments, as they start because there are a lot of governments that are afraid that legalizing cannabis is going to create this massive, frankly, attraction to people that they think are undesirable, and I’ve heard it to certain people throughout the years. But I feel like if you can start to show like if you can start to overlay the demographic data on who’s buying, data will help to sort of debunk that myth. That isn’t exactly going to help the growers per se or the retailers but I think it will help the entire industry as people will start to be more accepting of it once they realize really who’s using it.


Liz Connors: I think having those facts out there are what people need. I got into data because I love to be right and so when you have to like…


Jeff Boedges: Yeah. You’re going to fit in fine at this pool. I’ll bring my wife and you and Rick and my wife can all tell me you’re right all the time. Yeah. No, that’s good. But I would think do you have any governmental or institutional sort of or anybody in like the people who are out pushing for legalization, are they using your data or do you guys have specific like products for them? 


Liz Connors: Yeah. Absolutely. We’ve definitely worked with a lot of them. We’ve worked with I would say individual ones, but we’ve worked with people to do things like increase the amount of inventory retailers are allowed to carry. We did some work around vapor pens for a government that was trying to decide what to do about like who is buying them? Do we need to do anything about it, that kind of stuff? We’ve done work on even just saying this is about how large a cannabis operator usually is. How do we predict how many, if it’s a brand new state, how many licenses do we need to give out? Do we need to give out 100 or do we need to give out 1,000?


Jeff Boedges: That’s fascinating. And do you guys do anything like on the potential tax revenues that that would equate to if they did?


Liz Connors: Yeah. For sure, we can do a little bit of that. I think other interesting ones. We did some work to because of packaging requirements to say, “Well, hey, if you took the packaging requirements back a little bit, it would save this much waste.” You know, the little pieces of plastic going out into the oceans for those poor seals to deal with. 


Jeff Boedges: Very cool. I love that. 


Rick Kiley: Cool. Awesome. All right. Well, I think we’re getting close to the end of our time here. We’re getting close to the point where we get to ask our famous crystal ball question. I don’t know if it’s famous at this point, but…


Jeff Boedges: Well, it’s definitely famous. 


Rick Kiley: It’s famous. Yeah, absolutely. But we started this podcast because we’re sort of trying to watch the progress as cannabis marches towards federal legalization. Jeff and I believe that that’s going to happen. We’re not sure when we want to keep asking everybody. Do you believe that that is also inevitable? And if so, do you have a guess you want to put up on the big board?


Liz Connors: I mean, I do think it is inevitable at some point. I’ve spent my life as a forecaster. I have managed processes that do over a million product level forecasts that I’m comfortable with. 


Rick Kiley: Yeah. This is going to be a good one. I like it. 


Jeff Boedges: My money’s with you then.


Rick Kiley: Is it January 31, 2021? 


Liz Connors: Forecasting the whims and fancies of this current administration is outside of my ability but I do think especially right now, as we look at all the budget shortfalls in states, cannabis tax revenue feels like a good way to shore some of those up and a good way to get more voters on your side because it does seem like popular opinion is very much leaning toward that preference. So, I don’t know that it’ll be in the next year or two, but I do imagine we will see more states start to move to adult-use especially some of the [inaudible – 50:50]. And you can only take so many more states before. What’s really the point of having a federal…


Rick Kiley: Twenty-one states, right? It’ll be 21? What do we need? How many adult-use states do we need before it goes? That’s another question we can ask people. What is the 26th state? 


Liz Connors: I don’t know. Yeah. It’s set to get to 20, 25. I mean, that’s half the states at that point. Now, what are we going to do here? It seems like it just got to the point where, well, there’s not much we can do. 


Rick Kiley: I feel like if Texas goes, the country goes. I don’t know. That’s my guess. 


Jeff Boedges: Exercise joints. Again, it’s been going out there for…


Rick Kiley: Cool. Liz, it has been great speaking with you today. Thank you so much for joining us. If someone were listening to this and were like I totally want to get this data or I want to talk to Headset, how should they go about doing that? 


Liz Connors: Yeah, absolutely. So, you can just email sales@headset.io or you can go to Headset.io. And we even have some free data products that anybody can sign up for, some broad level information about the markets as a whole and right on our website, you’ll see the link for I think it’s called Insights Pulse. If you’re already there, there’s a link right there. We have tons of free products for retailers to help you better manage so many parts of your business with data. 


Rick Kiley: Awesome. Awesome. Cool. Well, it’s been great speaking with you. Thanks so much for joining us today. 


Jeff Boedges: Thank you for being on the show, Liz. You’re great.


Rick Kiley: Cool. All right.


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