What quality data means for the cannabis space

We all know that data is an essential component in running a business, and the quality of your data will have an impact on your capabilities to make strategic business opportunities. This seems like common sense; no one wants to use bad data. But as the industry expands to include more data providers, it can be hard to sift through the noise and figure out which data partner is the right fit, and more importantly, who has accurate and trustworthy data.

Data analytics is a complicated field, and cannabis data is messy. What more businesses need is an easy-to-use tool, with dashboards that convert all of the data noise into a clear picture of performance that guides you to the existing opportunities. This is the motivation that guided the creation of Headset tools. Below, Headset CEO and co-founder Cy Scott explains what quality data should look like for cannabis businesses today.

The importance of data in the cannabis industry

Fundamentally, cannabis companies need data to drive important decisions. Every aspect of a business, no matter what kind of business - retailer, manufacturer, distributor, plant-touching, financial services - is constantly faced with a host of different decisions to make. Data is critical in making the right decisions.

Our data covers both market intelligence and business intelligence. Market intelligence measures a business’ status in the space, risks and opportunities, and trends happening in specific markets to provide a competitive analysis. Business Intelligence is data on a business’ own operations. For retailers this includes sales and inventory trends while brands can see product sales performance on retailer shelves and more. At the end of the day, the best decisions are made with data.

How has the use of data in the industry evolved over the years?

In the last five years, data has become a more important part of the equation for two reasons. One, the industry has matured greatly. As it continues to develop, businesses are getting savvier and attracting talented team members from mainstream industries who have experience leveraging data and look for those data sources to drive decisions.

There’s also stronger competition. It’s getting harder and harder to win shelf space as a product manufacturer or to draw in customers as a retailer. Many people recognize the opportunities in the industry and have joined the race, so it’s tougher out there.

A few years ago, the cannabis market wasn’t nearly as crowded as it is today. The high level of competition is driving people to the data as they look to gain a leg up on competitors.

What industry challenges can real-time data solve?

Cannabis companies don’t have the luxury of time to make decisions because they operate in a very fast-moving industry where everything happens at a rapid clip. Real-time data on the cannabis market helps companies better understand and respond to its ever-changing competitive landscape and consumer base in a timely manner.

For example, let’s say Massachusetts is issuing a number of licenses in a short period of time. As additional dispensaries open and new trends emerge, businesses need to be able to respond immediately. If it takes two months to make a decision, the data and the dynamic has already changed. Any opportunities from that initial market shift are long gone.

Cannabis is unlike any other traditional, long-established vertical where things don’t change as fast. New competitors, consumers and product innovations are entering the industry all the time. Real-time data is absolutely necessary as it empowers operators to make decisions while the trends are still relevant. Otherwise, they’re basing important decisions on bad data, which can be even worse than basing them on no data.

More data providers entering the space. Why should cannabis businesses use Headset data over others?

Cannabis businesses should work with data providers that offer the most comprehensive, holistic market reads. When making business decisions, the four pillars operators should look for in data are accuracy, relevancy, timeliness, and completeness. Headset’s data checks all of those boxes.

Headset works with the largest sample of retailers and dispensaries across the largest markets in both the U.S. and Canada to aggregate the most relevant, reliable and complete datasets. Other providers cover only a relatively thin slice of the market, a piece of the story, whereas we tell the whole story. Our data knows more about cannabis sales than any other data provider out there.

Why can you trust Headset's methodology over others in the cannabis space?

Headset builds out rigorous statistical models that are validated against other datasets from states, provinces, and our partners. It’s part of our process to include checks and balances in our models. We work closely with the brands we represent to verify our data’s accuracy by comparing it to their own internal data.

Headset is also very transparent in how we produce our market projections. We go through a complicated process to create our market reads and we’re happy to discuss it with our partners. It should be asked of any vendor so the client knows the data process is reliable.

What would you say to a business owner who feels they don't need to leverage data at this point in their business?

There’s no reason not to use data in your decision making process. A majority of successful operators already leverage data and the market will only get more competitive as time goes on. Business owners may be successful without data, but could reach greater success by bringing it into the decision making process.

With Headset data, it's easy to be an analyst

We leverage our extended footprint across dispensaries to develop best-in-class data and statistical models. With our data, operators don’t need to build out a large team to create everything from scratch, which can be costly and time consuming.

Plus, our visibility into questions others are asking allows us to democratize the information out to our partners. We understand how other leading organizations are leveraging data and present that to clients. It’s a simpler way for companies to evaluate different frameworks that might better meet their needs. With Headset as a data provider, enterprise businesses simply don’t need data compilation and analysis as a core competency.

How does Headset out-perform the competition?

Headset’s data is richer, more reliable and more comprehensive than what our competitors can offer, plus ours is in real-time. We also provide a lot more in terms of data analytics. While we discern patterns in the data and share what can be inferred from it, our competitors deliver high-level data but doesn’t tell you what it means from a pricing or consumer perspective.

Why should businesses outside of the cannabis space leverage Headset's data to inform their cannabis business strategy?

Cannabis is a fast-moving industry fraught with massive opportunities. There are many reasons to jump into cannabis, especially with federal legalization on the horizon here in the U.S. Many mainstream organizations are thinking about it, but any action must start with data and questions regarding various opportunities. Headset has those answers. We understand what’s driving sales and where they can participate, no matter the type of business they look to build.

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Want to see us walk our data talk? Get started with our free resources. Our industry reports provide detailed analysis on a variety of topics, like how cannabis Beverages are performing in the US and Canada and how retailers can gain revenue from optimizing their inventory management. Our Best Sellers pages provide real-time sales data of top-selling products by category in various markets. If you want to take it a step further, sign up for a demo and learn how our tools can help you make data-backed decisions in your day-to-day.

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