38 TOBACCO BUSINESS | MARCH / APRIL | 22 Despite its media hype and gas station availability, delta-8 tetrahydrocannabinol (THC) is very much on the fringe of the cannabis industry. Chemically, this compound is extremely similar to the tightly regulated cannabinoid THC (also known as delta-9 THC) andmimicsmany of its cousin’s psychoactive effects. When synthesized from hemp CBD, delta-8 THC is a federally permitted substance (thanks to the 2018 Farm Bill, which effectively legalized all hemp-derived cannabinoids except for delta-9 THC). Delta-8 products have boomed in popularity since the Farm Bill became law, especially in areas where regulated THC products are not widely accessible to the public. But who exactly is buying these delta-8 products, and how does their delta-8 usage relate to their tobacco/ nicotine purchasing habits? The Delta-8 THC Consumer Compared to the typical tobacco consumer, a delta-8 purchaser is significantly more likely to be both male and single (though a plurality is married). Despite having less higher education than the tobacco consumer on average, the delta-8 consumer is significantly more likely to be in middle- or high-income brackets, though purchasers of both product types over-index among lower-income consumers. Both delta-8 and tobacco consumer categories are more likely to live in rural areas/small towns than the average American consumer—which is perhaps illustrative of wider geographical trends. The delta-8 consumer is disproportionately likely to be from the South and, secondarily, the Midwest. This is consistent with trends in cannabis legalization, as consumers living in the South tend to have the most restricted access to regulated cannabis products of any region in the country while the Midwest has greater levels of access but remains below the eastern and western regions in this metric. Delta-8 THC and Tobacco As is true of cannabis and CBD purchasers, delta-8 consumers are significantly more likely to consume all varieties of nicotine products than the average American consumer. Compared to the average consumer, delta-8 purchasers are nearly twice as likely to smoke cigarettes and are nearly four times as likely to use nicotine vaporizers. They also are extremely likely to have purchased delta-8’s cannabinoid relatives, THC and CBD, as well as alcohol—which is illustrative of the amount of overlap between cannabinoid consumers. The use of delta-8 THC products does not appear to reduce nicotine usage as strongly as CBD and delta-9 THC usage does. While 14.1 percent and 15.2 percent of CBD and cannabis users respectively stated that they had decreased their tobacco usage in the past six months, only 12.5 percent of delta-8 consumers experienced the same decline. In fact, among the 48.8 percent of delta-8 consumers who also purchase nicotine products, 46.6 percent reported using more nicotine overall—higher than is the case among either CBD or delta-9 purchasers. Delta-8 consumers prefer to purchase their tobacco products at convenience stores and smoke shops, with lower levels of preference for grocery stores, pharmacies and mass merchandisers. Wrapping Up Though there remains a significant opportunity for nicotine and tobacco businesses to capitalize on the interest their existing base of consumers has in delta-8 products, the future of the category is somewhat unclear. Though delta-8 has yet to be regulated at the federal level (regulatory bodies are currently exploring thematter), nearly 20 states have banned the substance or restricted its sales to regulated cannabis channels (i.e., dispensaries). However, in markets currently permitting delta-8, tobacco companies need only to capitalize on their brand loyalty to gain a strong foothold in this emerging cannabinoid market. TB — Contributed by Matt Zehner, a senior insights analyst at Brightfield Group, where he performs quantitative and qualitative analyses of the cannabis and CBD markets in North America. D LEG I SLAT I ON : BR I GHTF I ELD GROUP THE SKINNY ON DELTA-8 THC What the tobacco industry needs to know about this new, legal (for now) cannabinoid.
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