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In a press release issued mid-June, leading cannabis market research and analytics provider BDSA announced an ambitious strategic alliance with Management Sciences Associates, Inc. (MSA), a provider of analytics and data-driven solutions for Fortune 500 companies, that it says will “revolutionize cannabis market insights.” MSA, which celebrates its 60th anniversary as a business this year, was founded in Pittsburgh by Dr. Alfred A. Kuehn, Ph.D., a former faculty member at Carnegie Mellon University’s Tepper School of Business who developed an academic interest in bringing a quantitative approach to decision-making and problem-solving.
“Kuehn was a professor using leading-edge analytics, including WW II innovations such as Artificial Intelligence and advanced statistical inference for problems posed by firms or their management consultants,” noted a 2019 article by Pittsburgh Technology Council. Today, MSA “serves institutions and companies across a spectrum of industries, including consumer packaged goods, media, healthcare, pharmaceuticals, metals & advanced manufacturing, casino gaming, medical cannabis, and internet applications.”
The announcement calls the alliance between BDSA and MSA “a significant milestone in the industry, bringing together the expertise of both organizations to provide unparalleled data collection, reporting and analytical capabilities to those participating or interested in the cannabis market. BDSA and MSA will collaborate on various fronts, including offering industry cross-analysis between BDSA’s clients focused on the cannabis industry and MSA’s clients in the CPG, health care and government sectors, and providing in-depth technical support to clients with complex data requirements.”
BDSA co-founder and CEO Roy Bingham, during a recent call with Cannabis Business Executive, was glowing in his praise of MSA and its founder, who was the inspiration for the collaboration. “I think MSA is an exciting example of one of those outside the cannabis industry companies that has been paying attention to cannabis for a long time and is now making its move,” said Bingham. “They are a major data analytics provider to CPG companies, to the pharmaceutical and healthcare industry, and many other international businesses. Their founder is quite a visionary who got very interested in cannabis several years ago and then dedicated as part of one of his people to getting involved in the industry, and this strategic alliance is a result of that.
“I think that’s a pathway that will happen for a lot of people, and one of the things that makes it easier for MSA is they’re privately owned, so they don’t have the legal complexity that a public company might have,” he added. “They’re also data specialists, and so to them data is data, and it doesn’t really matter what industry the data comes from; it’s can you make it useful to the clients. And the catalyst was really their founder, who is in his 90s, and is still heavily involved with the company, and he believes there is great growth potential in the cannabis industry.”
Bingham stressed that the alliance, while highly significant for both parties, is not a merger. “It’s a very close relationship, but there is no equity changing hands,” he said. “In terms of the way the alliance works, [MSA] will be taking our products to their clients. So, big CPG companies and healthcare companies and government agencies and the like will now be able to get access to BDSA data analytics about the cannabis industry, and then we will be bringing MSA’s capabilities to our clients in the cannabis industry.”
The benefits will be substantial, he added. “They do very sophisticated advanced analytics, and they do all sorts of things that are beyond BDSA’s current capabilities,” said Bingham. “They’ll massively increase our analytical power with our existing client data, and then most importantly, together we can combine cannabis industry data with real world and healthcare data, and thus create something that has never existed before, which is the ability to analyze the healthcare benefits of cannabis based on real world outcomes, people who are purchasing cannabis improving or reducing their amount of prescriptions and changing their diagnoses and these kinds of things.
“So, there are three aspects of it,” he recapped. “Their capabilities to the cannabis industry, our data and capabilities outside of the cannabis industry, and then the combination of the two for any clients, but that will be especially interesting to pharmaceutical companies and government agencies.”
The announcement also notes MSA’s patented and HIPAA-compliant methodology for deidentifying protected health information as being a key advantages of the collaboration. Bingham clarified, “[MSA has] an extraordinary degree of data about almost every American adult, anyone who has any interaction with the medical system, but it’s all on a de-identified basis, so it’s all HIPAA compliant. But they know which prescriptions we take, how many prescriptions we have, and even what our diagnosis is.
“Their system has this information through partnerships with all of the major health care players,” he added, “so if somebody goes and purchases cannabis for six months and changes their health care status, or changes their prescriptions or something, MSA can figure that out still on anonymized and de-identified basis. At a statistical level, we can then say, for example, ‘Okay, so consumers who purchase high THC to CBD-ratio pills tend to reduce their use of opioids or other painkillers.’”
He noted that MSA already has a foothold in cannabis-related research. “They’ve already done a study which showed about a 30 percent reduction in opioid use while people were purchasing cannabis in pill form,” said Bingham, “and so you can imagine the potential of that to really provide breakthroughs in terms of targeting cannabis products at particular health states, and actually providing comparative data for the pharmaceutical industry, which may not really want to hear this right now, but at some point they have to acknowledge that people are taking cannabis instead of prescriptions or OTC products.”
It sounded as though there is about to be a sea-change in the way data and analytics are both collected and used by companies and also by people as they go about their day. “This really is the beginning,” replied Bingham. “There’s this big experiment going on in healthcare where we’re all trying things with the advice of a doctor, or not, in order to improve our healthcare condition, and what we’re able to do here is beginning to combine those datasets in order to figure out, in this instance, how cannabinoids are helping people. That then leads to clinical studies and the development of cannabinoid products that are focused on those conditions, whether they eventually become a drug or whether they’re sold in the current cannabis outlet.”
Regarding the timeline of a collaborative effort like this, Bingham said it will not bear fruit overnight. “This is a long-term strategic alliance, and it takes a while to make progress with this kind of initiative,” he said. “There’s a lot of data that has to be acquired, cleaned, matched, and configured together, and we have to identify the right clients who are going to be interested in knowing what will come out of this combination of data. The milestones will be reports coming out within a year, but probably most of it will be more like two or three years from now.”
I asked Bingham how different the new reports will be. Will there be a wow moment for clients? “Yes, there will be a wow moments for our clients,” he said. “As a result of this, our clients will get very, very smart about who their consumers are, what health care conditions their consumers are treating with cannabis, what are the products they’re taking in conjunction with cannabis. So, our clients will be very smart, and they will figure out how to position themselves appropriately for that consumer who is on the healthcare spectrum towards their needing medical help end of the spectrum.
“They won’t be able to make statements that this product is the best product for a disease, “ he continued, “but they will know that people with diseases are taking those products, so that’s going to be an a-ha moment for them in terms of what we’re able to make public. That will be somewhat more limited, but we will be able to publish academic papers where the data is matched, and conclusions are drawn, for example, on things like reductions in opioid use. So that’s exciting because it’s a real example of cannabis actually saving lives, which it’s been doing for a long time by getting people off opioids, but there hasn’t been a lot of data to confirm that.”
Benefits should only accrue from there, he added. “You will know so much more about the cannabis consumer and what motivates them and what they’re also doing in other channels and with other categories of products,” said Bingham. “Therefore, you’ll be able to position yourself more appropriately and/or find partnerships with other mainstream companies, and those CPG companies will have tremendous insight into their consumers who are also cannabis consumers, which of course is about half the population now.”
The entirety of the cannabis supply chain also stands to benefit from the advances gleaned from this collaboration, said Bingham. “It’s extremely valuable to retailers of course to have a better sense of who the consumer is and what they’re interested in,” he noted. “BDSA already provides a tremendous amount of information on that, but this will be a whole deeper layer of understanding based on hard empirical facts about real world data. And then brands, which in this industry, unlike other industries, are themselves manufacturers and growers, will be able to say, ‘There are segments of consumers we’ve been neglecting up until now that we now want to focus on and reposition ourselves for, and there are particular types of products or combinations of cannabinoids that seem to be more effective for certain types of health conditions.
“Companies will be able to differentiate themselves with their focus and with their positioning as being more of a medical product, perhaps,” he added. “Generally speaking, the excitement in the industry recently has been around adult use, but we all know that that’s k built on a core of medical consumers and on people who never had a medical card but are purchasing cannabis for medical reasons.”
Naturally, AI will continue to play a leading role. “What AI thrives on, of course, is lots of data and lots of data from multiple different sources, and data that is not necessarily easy to integrate, and that’s what this will be,” said Bingham. “We’re adding several layers of data about consumers and consumer behavior outside the cannabis space, and consumer health states. AI will enable us – and MSA is a very sophisticated company, of course – to develop new tools so that the data can be interpreted more efficiently or made more actionable and simplified so that businesses can take action based on it.”
Could AI potentially speed-up the expected timeline of reports? “I guess I’m being cautious about the timeline,” said Bingham. “I don’t want us to get ahead of ourselves, and executing it is a long-term venture, but yes, we may have new things that we can do within six months.”
I noted that the advancement of these tools and methodologies only reinforces the idea that we are entering a brave new world of data analytics for cannabis retail and perhaps all retail. “Well, AI is all built on a foundation of machine learning and other capabilities that were developed over the last decade, and BDSA has been using those technologies ever since we got started,” replied Bingham. “So, in terms of cleaning up and organizing data so that it is accurate and makes sense, that’s something that we have specialized in for a very long time. If you don’t have that, you don’t have anything. But now we’re looking at the capability to draw more and deeper conclusions from combining data, and that is enhanced by the AI technologies coming along now, and it’s coming along rapidly.”
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