How We Make Our Forecasts

At Headset we create our Insights daily, product-level market forecasts by combining data from government agencies, publicly available financial information/press releases, and our sample of retail partners. Before we launch Insights in any market we first run all of our data through a rigorous statistical process to ensure we are confident in our projections. This process includes ensuring that our sample of data is reflective of the entire population, that no one store or chain of stores unduly influences our projections, and that our projections would not significantly change if additional stores connected to Headset.

What Is Insights Data?

The data in Insights reflects market projections for the total (legal) Adult Use, Medical, or combined cannabis sales depending on the state or province. We get market sales totals from each market’s regulatory agency (usually via cannabis sales tax collection disclosures). We then use data from our connected retail partners (over 3300 as of March 2024) to feed our statistical processes to come up with daily, product-level market share forecasts.

Find a list of current Insights markets and their included sales reporting below:

 

Sales Totals in Insights

Sales totals in Insights represent total retail sales (in local currency). This is presented after any discounts and before any consumer paid taxes. In addition, we present cost information (wholesale price paid by retailers to acquire products) and discounts (these are explicit discounts and exclude temporary price reductions). Thus the average item prices are not "out-the-door" prices but rather actual total store collected revenue before taxes.
 

A Note on Taxes

Insights presents data before consumer paid taxes. This amount varies considerably state by state and even city by city. For example, there are some cities in CA where there is a 7.25% sales tax, however, sales tax may be at or above 10% in other counties. Each state has different laws. For example, in WA excise taxes are paid by the consumer at the time of purchase; thus, our WA sales totals exclude excise tax (35%) and sales tax (10%). If you are unsure which taxes are consumer paid in each state you can find that information in the cannabis legislature or reach out to your customer success rep at Headset.
 

Vertically Integrated Companies

In all current Headset Insights markets vertically integrated companies are grouped under a single brand called "House Brand".

• For companies that are 100% vertically integrated you will not find their brand listed in our Headset data.
• For companies that are partially vertically integrated in certain markets, you will find their brand listed in our data, however, our forecast reflect sales outside of their own retail establishments only. For example, if we ran a company called "Headset's Flower and Retail" we sold $10M in Flower of which $6M was sold in our own stores and $4M of which was sold in other retailers you would see $4M for Headset's Flower in our Insights forecasts. The remaining $6M would be in-house brand.
   

Frequently Asked Questions (FAQs)

How does your sampling process work?

• Headset Insights always utilizes government reported cannabis sales totals where possible. In each market, when available, we use government reported cannabis sales as the topline for all our category and product level forecasts. Using these market sales totals, we then take a sample of Headset-connected retailers in the state/province to create category, brand, and product level forecasts.
• Using a combination of human knowledge and machine learning, Headset taxonomizes a wide array of products from its connected retailers to clean and standardize Point of Sale data, ensuring that the ever-growing catalog of cannabis products in the market is captured by Insights.
• Next, the Headset Data Science team uses rigorous statistical analyses to select (by state/province) subsets of stores from the 3,000+ Headset store sample that provide the most accurate and holistic view of each individual marketplace. These statistical analyses are conducted frequently to ensure Insights is always utilizing the most representative stores in any given state/province.
• The combination of taxonomized Point of Sale data and Headset's large sample of retailers allows their Data Science team to create daily product level forecasts, which then aggregate up to the government reported sales total, providing a complete picture of the marketplace.

How do you avoid aggregation bias?

Headset Insights avoids aggregation bias inherently through it's sampling process. This is accomplished by using product-level forecasts as the basis of our product. By first using product level data to create forecasts, Headset Insights can avoid incorrectly assigning an overall market trend to an individual product/category.
 

How do you ensure data accuracy?

Headset Insights always utilizes government reported cannabis sales totals, where possible, as a source of truth. We diligently review customer feedback regarding our data & run a rigorous process to review our projections at least three times each month to ensure they are tracking with median like store growth. Multiple analysts create independent forecasts and then review the aggregate projections before they are inserted into our modeling. While data entry errors do occur, our team has built many methods of monitoring for potential discrepancies and regularly adds more to continually improve our response time to any issues that may affect Insights data accuracy.