Tag Archives: dispensaries

As Mastercard Exits Cannabis, There’s a Cash Opportunity

By Shawn Kruger
No Comments

Late last month, Mastercard decided to halt their debit card transactions with cannabis dispensaries, notifying financial institutions and payment processors to stop processing purchases. This isn’t the first digital payment solution to swiftly exit the industry – late last year, vendors turned off services to their cashless ATMs. These abrupt decisions have made major headlines, shocking cannabis dispensary owners, operators and consumers as they scramble to shift focus back to the remaining legal payment tools.

For the cannabis industry veterans like myself, these exits aren’t a surprise at all. Why? Cannabis is federally illegal and federal regulations restrict banks and other financial services companies from working with cannabis businesses – even if it is legal at a state level. Due to this massive legal hurdle, cannabis dispensaries often lack access to typical banking services and have limited payment options for consumers, making it challenging to manage and facilitate payments.

Some believe that this decision by Mastercard, the second largest payments provider in the world, and by other payment vendors, coupled with the political pressure to legalize cannabis could help push legalization or the Secure and Fair Enforcement (SAFE) Banking Act to help mitigate the lack of access to banking services in the longer term. Even though cannabis represents an economic opportunity – MJBizDaily estimates that combined medical and adult use cannabis sales could reach $33.6 billion by the end of 2023, and $53.5 billion by 2027 – hurdles to legalization mean that, for now, cash will be the most prevalent payments option.

Let’s Talk About Cash

Physical cash is difficult to manage for dispensaries

Cash remains the longstanding and most prevalent payment option in cannabis. However, it presents difficulties for businesses. Physical cash is difficult to manage for dispensaries for several reasons, primarily due to the costs to count, track and manage cash volumes and the labor required to count the cash. In fact, in most dispensaries, associates count cash an average of six times a day. Each time cash is manually counted, dispensaries risk miscounts, shrinkage, security and safety concerns due to robberies.

This manual labor required to oversee a business’s balance sheet and keep dispensaries operating is inefficient and unsustainable, and many have attempted to incorporate debit payments or cashless ATM transactions to help mitigate the costs associated with cash. However, while cash presents logistical and operational challenges for dispensary owners, it remains one of the more dependable payment options consumers and dispensaries have for cannabis transactions. Dispensaries can integrate simple strategies to improve their cash handling and operate more efficiently.

Best practices with cash management for dispensaries 

The biggest and most impactful strategy is incorporating cash automation tools to help secure, count and manage their payments. The largest and oldest dispensary in Washington D.C. incorporated sophisticated automation tools into their cash handling practices, which have alleviated massive headaches and burdens from store associates, managers and its accounting team, who previously relied on manual cash processes to count, sort and manage their cash.

Mastercard halted debit card transactions with cannabis dispensaries just weeks ago

This cash-handling technology has improved count accuracy, saved time for staff, improved visibility and enabled real-time reporting. These tools have transformed the day-to-day duties of staff. The dispensary’s accounting team and associates no longer get overwhelmed when anticipating increased cash flow on 4/20 or other holidays because they have tools that eliminate the extreme costs of handling cash. Additionally, they now confidently support audits as they have complete reports of each transaction by user, date and time. Before automation, audits were next to impossible to execute confidently.

The greatest benefit of cash automation tools is the near elimination of shrinkage, a term referring to the cash lost due to employee theft or miscounts. With cash automation, cash is as affordable as digital payment options, with the added confidence that cash won’t disappear as a payment option for consumers.

Have a Cash Strategy

While Mastercard’s decision to leave the cannabis industry leaves dispensaries in the lurch, the cannabis payments ecosystem continues to evolve and transition quickly. Dispensaries must be agile and incorporate strategies for the payment options, both inbound from consumers and outbound to their vendors, that they can rely on.

As the cannabis industry continues to evolve, embracing cash automation will be crucial for sustainable growth and success. Cash automation is a transformative solution for cannabis reducing the cost of managing cash while addressing the unique challenges associated with high cash volume operations. Embracing cash automation allows dispensaries to thrive in an evolving industry while maintaining control over their cash ecosystem, no matter who enters or exits the payments space.

The Infused Pre-Roll Revolution: How to Ride the Wave and Boost Your Brand

By Johnathan McFarlane
No Comments

While pre-rolls are finally getting their moment, posting notable growth across virtually every market, much of that growth has been powered by the infused pre-roll subcategory. In Michigan, for example, infused pre-rolls now make up over 40% of the category, and 9 of the top 10 best selling pre-roll products are infused. But what’s driving this trend? How can brands capitalize on this new opportunity?

A galaxy of variations… and differentiation. 

Once saturation and price compression rear their ugly heads, cultivators in maturing markets quickly realize that producing just flower is a tenuous position. You are beholden exclusively to the price of flower, and it is often the first category that begins a race to the bottom. Diversifying your offerings, specifically with value-added products, is a necessary path to protect your brand and continue to grow as competition heats up. Pre-rolls are a common first step beyond flower because it’s a relatively convenient step. Many smokers roll flower into joints anyways, so why don’t we do it for them? It’s also been the only category to show steady, consistent growth across virtually all markets. The problem is that none of this is a secret, and so the pre-roll category can get crowded quickly. To stand out amongst the crowd, many brands are turning to a subcategory with an almost limitless potential for differentiation: infused pre-rolls.

An infused pre-roll sold at BeLeaf

While standard pre-rolls have only two ingredients (paper and flower), by adding an infused element to the product you introduce an almost limitless potential for differentiated products. “Our team is doing a lot of R&D on pairing the right flower with the right extract to create an entirely new experience,” says Jason Nelson, CEO of BeLeaf in Missouri. “We’re hearing a lot of legacy consumers talking about the entourage effect between flower and extract, which is something that is still being explored.”

Almost anything can be infused into pre-rolls: distillate, diamonds, rosin, shatter, the list goes on. Not only that, the concentrates and extracts world expands nearly every day with some new creation, which means the infused pre-roll subcategory expands along with it. “There are tens of thousands of combinations you could make,” says Nelson. “The sky is limitless, assuming you have the right technology in place to produce them consistently.”

Being the same as everyone else can mean death for a cannabis brand, but creating unique products that few other brands have – that’s the key. Separate yourself from your competitors.

Pack more punch… and more profit 

It’s no secret that many brands use their less-than-premium flower in their pre-rolls. That’s a big part of what has historically given the pre-roll category a reputation for poor quality. We often answer questions from customers asking how much trim they can include in their pre-rolls. While we advocate for always using quality flower and little to no trim, there is still a place for budget-friendly products in the category. That’s where many brands find an excellent use-case for infusion. You can infuse average flower with distillate (or some other extract) and even fruit terpenes to give it a significant “glow-up.” With the right combination, a very average budget pre-roll can be turned into a product that tastes better, smells better, is more efficacious and is more profitable than a non-infused, low-end pre-roll.

A preroll infusion automated system

In a competitive market, value-added products are important and infused pre-rolls add value two degrees past flower. That translates to better margins and more cushion from the fluctuation of flower pricing.

“Our infused pre-rolls average retail price is more than double that of our non-infused products,” says Noah Levine, head of Oregon-based category leader Benson Arbor. “But our cost to produce an infused pre-roll is less than double non-infused. We end up with significantly higher profit on our infused products.”

Of course, there is more to consider beyond just profit. But CEO of The Clear, Rich Batenburg, Jr. has an important reminder to everyone in the cannabis business: “Remember, prices never go up in cannabis! Before launching a product into this subcategory, you need to determine if it has sufficient margin to sustain the line over time.”

Collaborate to accelerate

Collaborations between brands are becoming more and more common in the cannabis industry, especially between brands that specialize in separate categories. It’s not a new concept – craft breweries have been using this tactic for years. Fans of each brand get exposed to the other, and in some instances even get introduced to a new category. It’s become so common, in fact, that many brands exclusively create collaborative products.

A DialedIn and Terrapin Care Station collaboration

Although they focus on live-rosin edibles, DialedIn Gummies in Colorado used this tactic to power their meteoric rise over the past several years. Every single DialedIn SKU is a collaboration with a different grower. DialedIn’s VP of Sales Keith Portman says, “Our collaborations have been a huge factor in our success. Including our partner’s logo on our tins helps promote their brand as well as ours, and helps us establish great relationships. We’re proud to say we’ve collaborated with over 100 rosin makers and cannabis growers.”

A side-bonus is that co-marketing and co-branding products usually comes with either a discount on purchased ingredients (like flower) or simply a revenue share or royalty without any additional capital needed. We’re now seeing this trend pop up in the pre-roll game as well; co-marketed infused pre-rolls are becoming common projects between concentrate and flower brands.

It’s about gaining something you might not normally have access to. Noah Levine at Benson Arbor points out, “We partner with farms that grow strains that we normally don’t, so it widens our selection. And, it helps with the hype. We leverage the popularity of both brands to create something that’s unique, and often a limited-run, which builds a sense of FOMO (fear of missing out) and curiosity with the consumer.”

Infused pre-roll manufacturing gets easier

When infused pre-rolls began hitting the market several years ago, they were difficult and time-consuming to make, so they were primarily marketed as a luxury option. That is no longer true. With machines like the RollPros Blackbird that can handle homogenized, infused plant material, or the Sorting Robotics Jiko, that automates injection infusion, producing infused pre-rolls is becoming more cost effective and more automated.

Nohtal Partansky, CEO of Sorting Robotics says, “The infusion process was the most labor intensive part of manufacturing a pre-roll. It was impossible to do at scale. But now with the right automation equipment it’s easier and more affordable. You can make a significantly better, more consistent product with a dramatically lower labor cost.”

The Blackbird atuomated system

Beyond the lower labor costs, the right equipment even allows you to create products that simply weren’t possible to make by hand in a commercial setting. “We have a customer on the East Coast that makes a blunt infused with live rosin and then coated in by crushed diamonds,” Nohtal continues, “that product really wouldn’t have been possible to manufacture even two years ago.”

The RollPros Blackbird presents another example of infused pre-roll manufacturing becoming more automated and easier. The Blackbird can create certain types of infused pre-rolls without any additional equipment. Kyle Loucks, CEO of RollPros says, “More and more of our customers are using the Blackbird to produce infused. Some use it exclusively for that purpose. They infuse and homogenize the flower first and run it through the Blackbird to roll it up. We are seeing some really unique products come off our units.”

What’s next?

Data from virtually every market shows significant growth in the infused pre-roll subcategory, and the momentum shows no sign of slowing down anytime soon. By adding an extra element to their pre-rolls, brands can stand out in a crowded market by diversifying their offerings and using infusions to increase potency and profits. Pre-roll automation equipment has made the manufacturing process easier and more affordable, allowing brands of all sizes to create complex infused products. With popular options ranging from distillate infusion to kief dusting to crushed-diamond coating, there is something for everyone in this burgeoning product category. In the midst of this flourishing landscape, the infusion of creativity, technology and advanced manufacturing processes continues to propel the infused pre-roll category forward, solidifying its place as a dynamic and lucrative dimension within the cannabis industry.

Digital Insurance Solutions are Ripe for Fast-Growing Cannabis Dispensaries

By Jay Virdi
No Comments

Cannabis sales in the United States are expected to hit $100 billion by 2030, and yet dispensary owners still face hurdles before getting up and running, namely obtaining the right insurance coverage. Unlike a coffee shop or clothing store, it can be difficult to secure the insurance coverage needed to satisfy the requirements prescribed by the state and/or commercial leasing agreements.

Yet a simple answer to the dilemma exists. Increasing demand for cannabis business owner policies has prompted some retail insurance brokers to provide convenient turnkey solutions via digital commercial insurance platforms. These platforms circumvent the traditional underwriting process that could trudge on for weeks, allowing cannabis businesses to ramp up operations sooner.

Currently about 30% of insurance customers interact with and purchase from their insurance provider digitally for their business needs. This can be a game changer for a fast-growing cannabis business operator.

What do you need to obtain insurance online?

Obtaining insurance online lets dispensaries secure a complete, holistic insurance policy in one quick pass to cover the industry’s unique risks.

Increasing demand for cannabis policies has prompted some insurance brokers to offer digital solutions

Like any other commercial business package policy, you’ll need to provide details about your business and its operations when harnessing a digital insurance platform.

The first piece of information needed will be proof of licensing with the applicable state or commonwealth where the business operates. This piece is critical since cannabis is still illegal at the federal level. In addition, businesses will need to have other basic data on hand before finding coverage online, including:

  • The legal name of the business
  • Tax identification number
  • Operating locations
  • Annual or monthly sales projections
  • Number of employees

A Closer Look at Cannabis Coverages

Crime, extreme wealth conditions and legal challenges count among the risks faced by cannabis dispensaries. Here are three essential coverages important for cannabis business owners and operators.

  1. Commercial property insurance. Owned cannabis dispensary properties can face perils such as fire, storms, theft and vandalism. Buildings hold value and need to be repaired or replaced if any adverse events occur. Leased properties may contain equipment and fixtures owned by the business and subject to the very same hazards. Commercial property coverage can help cover the cost of replacing business contents and inventory if damaged through a peril covered by the policy.
  2. General liability insurance. Cannabis retail outlets experience a high volume of foot traffic from customers, vendors and technicians, for example. As such, trips, slips and falls could occur and lead to lawsuits. General liability insurance helps cover legal defense costs should any of these parties seek to recover compensatory damages from accidents and mishaps on the property or occurring elsewhere in a business-related capacity.
  3. Product liability coverage. Issues such as quality control with infused products and concentrates can be a concern for cannabis purveyors. Lawsuits arising from mislabeled or improperly tested products likewise need to be defended by cannabis businesses. Comprehensive product liability coverage can meet the needs of cannabis dispensaries promoting and selling a unique variety of product offerings.

Outside the standard commercial package offering, dispensaries can opt for coverage such as business interruption insurance, which helps pay overhead costs if the operation must temporarily cease due to a covered peril.

Cannabis businesses also often need to retain workers compensation insurance that helps pay for lost time and/or medical bills incurred by employees who become ill or injured on the job. Commercial crime policies help cover losses that may occur on premises or in transit in a cash-centric business.

If cannabis industry owners and managers use an online platform for their insurance needs, they could secure a certificate of insurance in as little as 24-48 hours. HUB’s digital commercial insurance platform, powered by Insureon, is one such direct-to-consumer solution. The platform is ideal for licensed retail cannabis dispensaries in all legal US states.

Retail Shrinkage and Navigating Loss Prevention in the Cannabis Industry

By Dawne Morris
No Comments

In the regulated cannabis sector, retail shrinkage is a concern as business owners must navigate tight regulations in an often cash-only environment combined with the usual causes of retail shrinkage, including theft and inefficient operations.

Retail shrinkage occurs when a company loses inventory from causes other than sales—and it’s a problem that costs companies $100 billion annually, according to the National Retail Federation’s (NRF) 2022 National Retail Security Survey (NRSS). The cannabis industry is not immune.

Utilizing Technology to Combat Retail Shrinkage

The 2022 survey estimates that 65% of inventory loss is due to theft, a trend that is expected to continue with the rising cost of goods. Other factors may include administrative and human error. Nearly half of the retail respondents reported an increase in technology spending to combat these threats.

In Q1 of 2023, Proteus 420, an online enterprise resource planning (ERP) system for highly regulated industries, including alcohol and cannabis, saw a substantial uptick in POS software requests, in part attributed to the need for additional automation and auditing tools in order to more easily and accurately monitor and control inventory.

Physical security measures can aid in loss prevention

In the cannabis industry, along with a challenging regulatory environment, retail businesses are facing declining sales. Loss prevention is where dispensaries can protect their bottom line with a targeted approach and the right system in place.

How can cannabis businesses do this? By avoiding antiquated spreadsheets and by having the ability to quickly analyze vast amounts of data. Business owners should be proactive and utilize technology, such as a quality ERP system, to mitigate risk and safeguard inventory.

When choosing a software provider, cannabis retailers should focus on systems that offer day-to-day support and emergency assistance, and systems that can seamlessly monitor employees, cash and inventory. Software, and employees who work with it, should also be able to track and trace compliance, identify suspicious transactions and look at data from multiple locations. Detailed reporting is crucial from a compliance perspective.

Loss Prevention Practices

Because cannabis is a heavy cash-only industry, having the right tools to monitor the physical cash as it moves through your business is necessary to prevent loss. This is done with cash drawer-specific transaction tracking, employee module access, and the ability to open and close drawers at the employee level.

Here are some of our top loss-prevention tips:

  • There should always be multiple eyes on cash and products. Managers and assistant managers should always verify counts of cash and products as a check and balance measure.
  • Make sure employee access to your POS or operational system is granulated. This means that different positions have varying levels of access and capabilities.
  • Have a solid inventory auditing process. To stay on top of this, make sure that your staff and system can do spot inventory audits and can track the audits long-term.
  • Have physical security measures in place. This can include security cameras and alarm systems and a dispensary designed to keep inventory strategically placed.
  • Build a workplace culture that empowers employees to feel ownership in their work and feel accountable for loss prevention in their This includes emphasizing the policies and procedures needed for loss prevention, including consequences for theft. This culture is not an overnight process but develops over time.

The Right Employees Make a Difference

The first line of defense against product or cash loss is your employees

In addition to the right technology and prevention practices, the first line of defense against product or cash loss is your employees. From your budtender to your general manager, you need to make sure the right people are in place in the correct positions for fair compensation.

Some questions you can ask yourself during the hiring process include:

  • Do they have the right experience for the position?
  • Are they motivated, flexible, detail-oriented, team players?
  • Are they passionate about cannabis and want a future in the industry?
  • Have you checked their references?
  • Things move fast in the cannabis sector – are they willing to learn new skills?

Once you have the right people, do they have the standard operating procedures (SOPs) needed to do their jobs? If not, it’s time to create them.

When it comes to loss-prevention, you must trust that your cannabis point-of-sale and operations ERP system will monitor and provide the needed reports. You can also make sure there are additional measures in place to prevent retail shrinkages, such as empowered employees and solid loss prevention practices so that your inventory and cash stay right where they belong until sold.

New Jersey Market Grows, Regulators Make Licensing Progress

By Cannabis Industry Journal Staff
No Comments

2023 has so far been a productive year for the New Jersey Cannabis Regulatory Commission (CRC), the government body tasked with overseeing the state’s medical and adult use cannabis markets. The licensing process since New Jersey first launched its adult use cannabis market has been slow, but intentional and systematic.

When the state first launched adult use sales in April of last year, only thirteen dispensaries in the Garden State had their doors open for customers. A little more than a year has passed and now 27 dispensaries at this time have opened their doors for adult use customers.

Holistic Solutions, a dispensary based in southern NJ

The CRC has been a busy body this year, issuing hundreds of conditional licenses to microbusinesses and standard licensees (temporary licenses awarded to applicants giving them the green light to obtain local approval, find real estate and apply for a conversion to an annual license). Of the annual licenses they have awarded in 2023 so far, 18 have gone to cultivators, 12 to manufacturers, 35 to retailers and one laboratory. That’s an additional 65 cannabis businesses given approval to start operations.

Just last week, Holistic Solutions, based in Waterford, New Jersey, announced that they started serving adult use customers. Holistic is New Jersey’s first Black woman-owned cannabis licensee, with Suzan Nickelson at the helm. “We are thrilled to have the opportunity to serve adult-use customers at Holistic Solutions,” says Nickelson. “Our mission has always been to provide education and access to natural healing solutions, and we are excited to continue that mission for all of our customers.”

The Cannabis Quality Conference takes place in New Jersey this year, October 16-18, 2023. Click here to learn more.Valley Wellness, the first independently owned dispensary to open in the state, also opened its doors to adult use customers last week in Somerset County. “While the market is expanding, it takes cannabis companies months, if not years, to open,” Sarah Trent, owner of Valley Wellness, told reporters. “So we expect our product selection will remain stable and similar over the next year or so. That said we are anxious to add new products made from local New Jersey growers and manufacturers.”

With all these new licensees and a larger marketplace comes tax revenue the state is eager to see. Back in March, legislators in the state approved a bill that would allow cannabis businesses to deduct ordinary business expenses on their state tax return that they are prohibited from deducting on their federal tax return, the dreaded 280E tax code that cannabis stakeholders know as a painful thorn in their side. Governor Murphy signed that bill into law yesterday, which should lessen the massive tax bills that cannabis businesses in the state are accustomed to seeing.

As the state’s cannabis market continues to blossom, a large number of those new licensees are expected to come online before the end of the year.

Andrew Faulkner, MOST Consulting Group

How Dispensaries Can Create Superior Online Experiences

By Andrew Faulkner
No Comments
Andrew Faulkner, MOST Consulting Group

Even the most traditionally-minded, tech-averse entrepreneur accepts their success relies on providing customers with a superior online experience in 2023. Trying to succeed without a robust web presence is akin to running the 100-meter with your legs tied together.

On that note, the legal cannabis industry might have a leg up over other sectors in providing superior experiences online. After all, the legal cannabis market is relatively new, meaning no legacy systems require any rehauling. Still, many dispensaries must start their websites from scratch.

A website bolstered by an excellent user experience offers many benefits (e.g., branding and additional revenues), but ground-up projects are daunting. Fortunately, the insights below will make your web design process more manageable.

Design Your Website To Click With Your Customer Base.

The primary commodity of all dispensaries is the same. Yet, each dispensary is different. They all have unique branding, voices, and stories they’re trying to tell.

Moreover, every dispensary wants to provide customers with a brand-specific experience. There’s no one-size-fits-all dispensary website for the above reasons.

A brand-specific experience can have a sense of familiarity that customers may desire

Even so, the following general best practices will be conducive to streamlined, successful dispensary website design. While every website designer or agency has their own process, this process has proven to be extremely effective for the dispensary clients we’ve helped:

Develop an outline and wireframe for the website’s structure and content:

  • A guiding principle during this process is to include the necessary pages and sections to optimize vital brand components and effectively promote products.
  • Other factors to consider are sections, features and calls to action.
  • Dispensary websites should contain educational content and resources.
  • Fluid, straightforward navigation should also be prioritized.

Move onto the front-end design:

  • Incorporate and harmonize multiple brand elements.
  • Identify aesthetically pleasing typographies and imagery.
  • Design each page outside of the content management system. This makes it easier to make changes and adjustments after the first draft has been completed.

Get feedback from relevant parties (e.g., clients, colleagues, management, or other stakeholders):

  • Transparency and open communication are paramount to this step.
  • This phase will ensure that all expectations for the new design are met while providing a platform for course correction as needed.

Use the feedback to create a foundational website framework:

  • Meet for a second feedback session before committing 100% to a web design framework.

Develop the website inside of your content management system of choice:

  • Now that the front-end design has been created, the website will be built out in the actual CMS platform, ex. WordPress.
  • Share every page with other relevant parties to maintain and foster the web design process’s fluidity.

By now, you should have a solid base for the website’s final form:

  • The stage involves fine-tuning as the launch date nears.
  • Also included at this point are the following:
    • Ancillary page development.
    • Dispensary menu integration.
    • Tablet/mobile optimization.
    • Speed/performance tests.
    • Contact form designs.
    • Lead capture setup.

One last guiding principle in web design is to view your website through a user’s eyes. Continually assess how intuitive and convenient it is to navigate your site as a customer.

Optimize The Customer Experience With Seamless Navigation 

Dispensaries benefit by guiding visitors to their website’s most important sections.

It’s an understandable oversight only to prioritize seamless navigation to the menu page. However, customers will be less inclined to order if they can’t access educational content to learn more about your products. Plus, they may want to visit your physical store, so they’ll wish to view your location information.

Furthermore, visitors sometimes need clarification about what they want from your website. Build their pathway with insightfully structured navigation systems with clear prompts, calls to action and an emphasis on the following:

  • Specifics about store and location
  • Brand information
  • Where to find responses to FAQs

Lastly, be mindful of the mobile experience on your website. Your customers expect seamless navigation on their phones and tablets as much as on their laptops and desktops.

More people will visit and shop your menu on the mobile version of the website than the desktop version, so it needs to take priority in the design process.

Create an Intuitive Online Ordering Process

The ordering component of the customer experience is integral to receiving desirable returns on your online investment.

Intuitive, easy-to-parse menu systems are a must when optimizing online ordering.

Of course, every visit counts and brands are happy to educate consumers. A steady, always-growing stream of eCommerce transactions paints a winning picture of your site’s navigation. More to the point, success with online orders means you’ve optimized the ordering experience.

Intuitive, easy-to-parse menu systems are a must when optimizing online ordering.

Ensure that your customers are one click away from their preferred menu and location (if you have multiple locations), regardless of where they are on your website. It’s even better if those pages can rank on Google based on local searches (e.g., Pennsylvania dispensary menu).

Online shoppers also respond well to search filters on your menus, such as:

  • Products with the highest or lowest THC levels
  • Products with the highest or lowest CBD levels
  • Specific strain types (i.e., Indica, Sativa and Hybrid)
  • Product types (e.g., flower, concentrate, oil or edible)

Build A Robust Resources/Information Section

Almost every branded website has a resource/information section. In some instances, it’s a blog. For other brands, it’ll be eBooks, guides, case studies, press releases, videos or news articles.

Customers respond well to search filters on your menus

A resource/information section is uniquely vital to cannabis brands. Many prospective customers will be first-timers and require sure-handed wisdom to guide them through the experience. Also, many seasoned enthusiasts want to learn about the latest trends and the best new strains.

Furthermore, providing resources and information is a form of education. This “teacher” approach helps push back against stigmas by focusing on cannabis’s nuances and benefits.

Consider using a “pillar page” system to organize your informational content (e.g., blogs, videos, eBooks). Doing so will make it seamless for website visitors to learn about strains, terpenes, upcoming community events, consumption methods or information about local cannabis laws.

It helps to customize each pillar page with an icon and create an individual page for every post in a given category. This way, newly published content will automatically appear under its associated pillar page.

Other Considerations

We understand the budgetary challenges many dispensaries face when getting off the ground. You can grow your budget by making decisions and taking educated risks that generate returns.

Your customers’ online experiences are a worthy investment. Nonetheless, are you investing wisely by building (or redesigning) your website in-house? After all, your team’s expertise is in cannabis sales (or cultivation). They’re smart enough to learn as they go, but would this trial-and-error web design process be efficient or ideal for your dispensary’s bottom line?

Conversely, working with a Consulting Group like MOST who specializes in dispensary website design can ensure your website generates the desired returns and results. Contact us today to learn more.

The Story of 5th House Farms: Economic Empowerment & Equity in Cannabis

By Aaron G. Biros
2 Comments

Based in Rochester along the I-5 corridor in western Washington is 5th House Farms, a black-owned cultivation and processing company. Founded in 2016 by a BIPOC family with a tier three producer license, the company has quietly built an impressive brand success story in the state. 

Coming from an economically-disadvantaged background, Carlondo Mitchell, owner of 5th House Farms, persevered through adversity to build a successful cannabis business in Washington state. By influencing consumer behavior at the retail level with branding, they are trying to turn the concept of social equity on its head.

As a family owned and operated business since its launch, they have embodied the idea of economic empowerment in the cannabis industry. As of this writing, 5th House Farms has sold over one million vape carts, reaching the top 10 in sales for that product category in Washington and their products are sold in about 35% of dispensaries in the state. 

From Section 8 to Venture Capital

Carlondo Mitchell, Owner of 5th House Farms,

After cutting his teeth in the state’s medical cannabis market back in 2012, Carlondo Mitchell later grew in the cannabis space as a farm worker and sales representative. He ultimately took over operations of 5th House Farms in 2019, building on the same entrepreneurial and family-focused legacy that the company started with. “I learned a lot as a trimmer and sales rep,” says Mitchell. “I was the guy who would work 18-hour shifts for you, whatever you needed.” 

This month marks five years in the Washington adult use cannabis market for him. “I come from a single parent, low-income household so it was important to have an entrepreneurial mindset,” says Mitchell. Coming from humble beginnings in Section 8 housing, he has grown 5th House Farms into a multimillion-dollar business. “Now I own the company, I own the land, my family is there and we have twenty employees,” says Mitchell. 

The business has definitely become a success story, to the point that the state of Washington is working with 5th House Farms as a case study for economic empowerment and social equity. “For some people in this industry with a lot of opportunities, the path to success is pretty short and wide,” says Mitchell. “For me, and a lot of others, it’s been a lot more narrow, long and thorny. Through 5th House Farms, we want to show people what’s possible. We’re trying to show people that it is possible.” 

Innovating & Differentiating

Back in 2018, it was tough to compete in a marketplace dominated by flower, so Mitchell went in a different direction and started pouring vape carts by hand. “There wasn’t room for me at the table, so I thought I’d try and do carts and chase that. It was a day-by-day effort. He says you need to know you must work twice as hard to get noticed. “You have to prepare to be disregarded. Getting in the first store was the hardest step; you had to go through ten stores who said no to get one who said yes.” Their success came through partnering with retailers, building strong relationships, understanding consumer trends, identifying their needs and working closely with budtenders. 

Some of the product offerings from 5th House Farms

He says they treat people how they want to be treated. They sell products that they themselves would want to buy, by offering good, consistent products that are high quality and for a reasonable price. “Before you knew it, we had a prototype on the market and it took off. I do believe fundamentally that on the ground, consumers make choices with their morality. Some of our biggest retailers didn’t even know we’re a black owned business just a few months ago.” 

Economic Empowerment from the Bottom Up

Typically, when people in this industry think of social equity, they think of this top-down policy approach that tends to rely on lawmakers and regulators to develop things like social equity funds, a minimum number of licenses reserved for minority owners, license fees for equity programs and other policy approaches. Through 5th House Farms, Mitchell and his team are working on a different approach starting with the consumer. “We’re not only fighting for social equity, but also fighting to use cannabis to create equity,” says Mitchell. “Now that people are identifying us as a black farm, it’s a cool opportunity to show people what is possible. The equity is starting to come from people caring about how they spend their money.” 

Social equity, while a relatively new concept to the cannabis industry, has garnered attention in state legislatures, legalization initiatives, conferences and talking points, proving to people that they’re an ally of BIPOC stakeholders and those harmed by the War on Drugs. “To me, social equity is really about giving everyone a seat at the table. Not just trying to make things fair, but reversing this cycle of extracting from communities and instead, uplifting them.” He wants to eliminate the idea that social equity is about taking from one side of the fence and giving to the other side, rather it is about removing that fence altogether. 

5th House Farms is currently working with BIPOCANN on a product badge to be displayed on product packaging, identifying it as sold by a black-owned business. “We need a tactful way to show people where their investment is going,” says Mitchell. By influencing purchasing behavior at the retail level with branding and packaging, they are essentially trying to turn the concept of social equity on its head. 

Looking Back & Forward

In the chaos of chasing a dream and building a business, people tend to move quickly. “I would tell the version of me that’s ten years younger to slow down and trust the process,” says Mitchell. “As a young man, I was always looking for the cheat code.” He says his success came from losses, but they were also valuable lessons. When states began legalizing cannabis, it created real opportunity and real hope for a lot of people, but Mitchell says you need to stay vigilant and be mindful. “Try not to be so excited for the opportunity that you forget that you need to put in the work. I would tell others in this industry the same thing: to take your time in your process.”

Looking ahead, Mitchell says the plan for 5th House Farms was always sustained growth, to go national and then international. They’re in discussions with companies in other states about moving beyond Washington and they’re building a lifestyle brand. “The dream is to sell 100 million carts.” In talking about his future plans for the company, Mitchell spoke of Tyler Perry’s success story, going from sleeping in his car in the 90s to owning the largest production studio in the country today. “He didn’t have a seat at the table so he created his own table. We are intent on creating tables everywhere we can.” 

Anticipating the Ebbs and Flows of Seasonal Retail Cannabis Sales

By Itali Heide
No Comments

Like any industry, cannabis can experience ups and downs, especially when it comes to a doors-open retail business. Dispensaries that operate in towns or cities that attract tourists experience this more than anyone, seeing sales spike during the busy months and reach lows during the off-season.

We spoke with the folks at Dragon Hemp, a hemp retailer based in Sag Harbor in the Hamptons. As a brand that has first-hand experience with seasonal spikes, they were able to provide more context when it comes to anticipating the ebbs and flows of seasonal retail cannabis sales.

What is the Best Way to Prepare for Post-Busy Season Retail Lulls?

In Sag Harbor, Dragon Hemp awaits a spike during the busy summer months, as well as lulls when the tourist season is down and visitors head back to New York City and beyond, many becoming loyal online customers year-round.

According to Kevin Menard, LAc, founder of Dragon Hemp, the best way to prepare for post-busy season retail lulls is to build a community of loyal customers that take your brand home with them.

“Post-busy season lulls can be very useful in setting strategies and goals for the coming year. In our case, we do a thorough inventory review and align what we have with what we need for the upcoming peak season,” says Menard. “As the season winds down, they prepare for online orders that come from the impression left on customers in the store. “We also focus on cultivating our owned channels where we can have more direct communication with our community.”

Advice on Preparing for Busy Retail Seasons

Kevin Menard, LAc, founder of Dragon Hemp

Before the busy season is even over, it’s important to start preparing for the lull in business that’s bound to set in. For Kevin Menard and his business, preparation starts with inventory. So, what’s their secret? “Make sure you have budgeted for an inventory of your most popular items and hire excellent storytellers in both your retail locations and e-commerce marketing teams.”

Keeping an eye out on inventory management can be a great way to spend the slow months. Give brands a chance to monitor sales trends and keep up with changes in consumer preferences, putting more time and effort into online retail and social media and implementing promotions and sales online and in-person. Grow the team behind the brand, keep up with all new regulations and focus on customer loyalty to maintain trustworthiness even from afar.

Turning a Seasonal Customer Into a Lifetime E-Commerce Customer

In order to turn a seasonal customer into a life-long client, it’s important to connect beyond just the sale and product. For Dragon Hemp, the most important part is personalizing the experience for their customers: “For us, it’s all about achieving personalization with each customer,” says Menard. “Typically, a seasonal retail buyer will be opportunistic about their purchase in-store, but that purchase is indicative of a longer-term need. We try to create customer profiles based on in-store buyers and craft recommendations that fit that customer’s health needs over the long term.”

In order to turn a one-time buyer from out of state or city into a lifelong loyal customer, there are a few things to consider that can make this connection happen. First and foremost, building a relationship by maintaining impeccable customer service and personalizing the experience.

Focusing on online retail is also important in order to maintain the connection with clients. Making sure the website is in perfect shape and offer loyalty programs, incentives, promotions, sales, discounts or rewards to returning customers.

Marketing and publicity are other essentials, as you want to target those who have a long-time need that needs to be filled. Allowing for a fuss-free online shopping experience, targeting people who fall in line with the brand’s products and values, being creative and innovative when promoting the website and keeping in touch with active social media and newsletters.

How to Project Goals In Places That Swell Seasonally

It can be difficult to project year-on-year retail goals when the geographic location has a tendency to swell seasonally and have off-seasons but preparing and knowing what to expect can help with reaching those goals (and even surpassing them).

According to Menard, the secret to projecting their goals starts with their first location: “Since our first retail location in Sag Harbor, NY has been open only a year, our projections are still a work in progress! We’re using 2022 data to budget for this year, accounting for marketing efforts, increased awareness, and seasonality. We have some sensitivities built into this model based on different growth scenarios.”

The instabilities and fluctuations that come with a business that works on a seasonal tempo can be challenging when it comes to reaching and achieving specific goals, but there are things that can be done to make the whole process more seamless, and hopefully, more successful.

Looking back at previous years can be helpful in pinpointing tendencies and habits that can be observed in the consumer, and the lower sales allow space for the time that can be used in innovating and creating new products that are based on what the client base wants.

Researching not only the immediate region, but the regions that people often visit is another handy trick. Knowing who is coming, why they’re coming, and what they’re looking for can help set objectives that can be brought to reality throughout the off-season and the busy season, even experiencing more foot traffic in town. Moreover, making the most of the local events, occasions, changes and circumstances like holidays and local events can keep the brand connected to its roots and primary clients.

The off-season is a great time to set up a budget or specific monetary goals to reach, and off-season fluctuations can be added in to give a more complete idea of what the year might look like. Keeping an eye on the market by monitoring it and using forecasting models to predict results can also help set the stage for changes in the year-to-year goals.

Expanding From a Cannabis Retailer to a National E-Commerce Brand

Dragon Hemp didn’t start off with a bang, but they sure have achieved it over time. Dragon Hemp products were conceived by renowned alternative health practitioner and founder, Kevin Menard. Using hemp oil, Chinese herbs and native botanicals, they have managed to create a variety of beneficial and natural products.

“Our apothecary in Sag Harbor has been a great success, but the most rewarding aspect of the location has been the ability to have direct conversations with customers and get a deep understanding of how we can support their journey to better health,” says Menard. “We’re excited to expand our mission of helping people feel like themselves again by using next-generation natural botanicals and time-honored herbal remedies.”

Final Thoughts

As the country continues toward legal and accessible cannabis, new businesses are learning the ropes and those that have been there all along have been leading the way.

Having ups and downs in any business is to be expected, but just like any industry, knowing what to expect and what to do can make these challenges seem like less of a hassle. Building an online presence that clients connect to, developing e-commerce strategies, expanding product lines, building a loyal customer base and staying up-to-date with the latest regulations are surefire ways to stay on top of the cannabis business.

A Guide to Dispensary Insurance

By Itali Heide
No Comments

As a business owner, insurance is always a must. If you are interested in entering into the cannabis industry or you already have, it’s important to know what to expect when it comes to insuring your cannabis-related business.

That’s why we’ll be exploring what dispensary insurance is, different options for business owners and general advice regarding dispensary and other CRB insurance.

What is Dispensary Insurance?

Insurance for cannabis-related businesses refers to policies that protect the business against risk. This can include dispensaries, cultivation centers and testing labs – all of which require different levels of coverage and liability.

We spoke to Alexander Marenco, an insurance broker from Marenco Insurance, who explained what dispensary owners should know before seeking out insurance. Marenco says it’s similar to shopping for insurance for other businesess. “You need to have full details of the business and location to receive a quote.” He adds. “The applications will ask questions such as location, renovations, or improvements to the location, ownership information, payroll details, and sales or projected annual sales.”

How is Dispensary Insurance Different From Other Forms of Business Insurance?

Because non-hemp-derived cannabis is still considered a schedule one controlled substance under the Controlled Substance Act, cannabis insurance can be more expensive than regular insurance for non-cannabis businesses. Because of the risks associated with being considered a potential retailer of a controlled substance, liability policies and other options can cost a pretty penny.

budtenderpic
The cash-only nature of the business makes insuring dispensaries more costly

Additionally, when asking Marenco about how dispensary insurance differs from other brick-and-mortar retail insurance, he says: “With more states increasingly legalizing medicinal and recreational marijuana, insurance carriers have started to open risk acceptability. However, since marijuana is still federally illegal, businesses will find it difficult to find multiple quotes from different carriers.”

Types of Insurance Available for Cannabis-Related Businesses

What kind of insurance is available for cannabis-related businesses? Let’s find out.

First off, it’s important to keep in mind that CRBs are at risk for a lot of things: workplace accidents, damage to property, theft, general liability and product liability. Plus, the fact that most dispensaries work on a cash-only business model until the Secure and Fair Enforcement (SAFE) Banking Act is approved by Congress, CRBs tend to handle big amounts of cash, further putting them at risk of theft and liability. CRB insurance can be as low as $350 and as high as $7,500 depending on the type of business and policy.

Here are some of the most common types of insurance for CRBs and what they cover:

  • General liability: third-party claims for bodily injury, property damage and reputational harm.
  • Commercial property: damage to a business-owned property.
  • Professional liability: third-party accusations of negligence and mistakes.
  • Workers’ compensation: employees’ medical bills and lost wages due to injury or illness.
  • Inland marine: damage or theft of business-owned property in transit.
  • Crop: costs from damage to seeds and plants.

With so many things to watch out for, insurance for cannabis businesses and dispensaries isn’t cheap. Here, Marenco says what CRB owners can do to keep their premiums as low as possible:

A smart safe like this one can help secure cash handling

“Premiums are primarily based on sales (actual or projected). After the term expires, the insurance carrier will conduct an audit for the prior term to confirm the information from the application. The audited discrepancy will adjust the next term’s sales figures. Dispensary insurance will typically be placed through an excess & surplus market which do not provide traditional discounts.”

So, in essence, the best thing a dispensary owner can do is be honest about their projections.

Navigating premiums can be a detailed process, as we learned when speaking to Jesse Giffith, an owner of Smokeless CBD and Vape: a chain of retail shops across the twin cities Minneapolis–Saint Paul, Minnesota:

“Our shops carry insurance that has been offered with a modified rate for vape retailers. This route was not as straightforward as some traditional retail insurance options, but may offer benefits, and a better fit for coverage than other dispensary insurance options.”

A Growing Number of Dispensaries Across America

With the growing legalization and normalization of adult use, medical and hemp-derived cannabis across the nation, it should come as no surprise that the number of dispensaries across the country grows exponentially.

In 2021, the cannabis market in the U.S. was valued at 10.8 billion dollars, with an expected annual growth of 14.9% annually. This is a sign of what’s to come. Cannabis may be an industry that’s been considered taboo for decades, but the growth shows the growing acceptance of the plant for medical and adult use reasons.

Insurance providers remain cautious as cannabis laws are still in flux.

With that growth comes a greater need for insurance providers, opening the door to the possibility that these two industries will grow in tandem. The future may bring a greater variety of options for coverage at cheaper prices. But for the time being, insurance providers remain cautious as the fate of federal and local cannabis laws are still in flux.

Are There Limited Carriers that Issue Dispensary Insurance?

Every CRB needs insurance, just like any other type of establishment, business or company. The issue within the cannabis industry is that there is still a limited insurance market, with insurers willing to provide insurance constantly exiting and entering the market. Plus, the overall capacity and variety of policies that cover different types of risks are limited. Lastly, it can be difficult to use CRB insurance when you read between the lines of the policy. Because cannabis with THC is still federally illegal (excluding hemp-derived cannabis products containing less than 0.3% THC), insurers can negate coverage when a loss or claim occurs.

Because of the complications that may arise even if you do have insurance, Marenco offers some advice for dispensary owners that are searching for the right insurance option for them: “Before shopping for insurance make sure you have all your licenses and are in full compliance with all regulations. Insurance carrier’s requirements from the state. Additionally, consider different coverage options.” He continues. “At a minimum, a business needs general liability insurance. Insurance companies can also consider covering business property including inventory, betterments, and improvements to a rented space, among others. When shopping for insurance make sure your agent reviews different coverage options.”

Data: The Key to Success in Today’s Cannabis Market

By Rick Maturo
No Comments

As the cannabis industry continues to evolve, recent market challenges have created an environment that is more difficult for industry leaders to navigate. To find success in today’s marketplace, company leaders need to adopt a robust, data-driven approach to combat the influx of rising brands, emerging markets and pricing challenges, among other obstacles. By leveraging data, cannabis brands and companies can better make well-informed decisions to refine their business strategies and drive growth.

The Evolution of the U.S. Cannabis Market

The cannabis industry maintains its ranking as one of the fastest growing industries in the U.S. as the legalization of adult-use and medical cannabis continues to expand. When California first legalized medical cannabis in the 1990s, a lack of regulations in the market created space for new cultivation businesses and dispensaries to form. These early cannabis players leveraged capital to expand and grow, developing a business model that has been replicated many times over the years in markets like Washington, Michigan and Arizona.

“Keystone pricing is a common strategy in today’s cannabis retail market, and manufacturers would benefit from reevaluating how wholesale products are priced to determine the ultimate impact on the bottom line to maximize profits.”Some of the strongest cannabis brands today were formed during this time. Today, the U.S. cannabis landscape looks vastly different, and strict government regulations and stagnant federal policies make it more difficult to find success. Brands that are surviving and thriving in today’s landscape have invested heavily in data operations.

Investing in Data Operations

While data wasn’t essential for cannabis operations in the past, today, it can mean the difference between success and failure for a company. Cultivators, processors and dispensaries that analyze data have a broader perspective that allows them to pivot quickly and stay relevant.

Data-driven decision making is critical for cannabis companies looking to meet and exceed revenue goals at every level. For cultivators, data can help create an optimal environment for growth. Manufacturers can utilize data to improve environmental conditions, reduce waste, cost and more. By leveraging data, retailers can benefit significantly from learning precisely which products should have a place on their shelves.

Business leaders in the emerging cannabis industry benefit from embracing the infrastructure and business practices that are already standard practice in other industries. Many top-performing cannabis companies today are structured similarly to other CPG organizations, and those who employ these tried-and-true strategies will be primed to win. One successful approach that many cannabis companies are adopting is a three-tiered system for manufacturing and selling products similar to the one employed in the beverage alcohol industry, providing economic, regulatory and commercial benefits for all.

Unlocking Efficiency with Pricing

Pricing challenges have plagued the cannabis industry for the past 18 months. While an inflationary environment has caused the prices of products in many sectors to rise, cannabis has been largely unaffected. Yet, because cannabis is not yet legal at a federal level, markets have become segmented, and prices are highly dependent upon demand factors in each state. This unique dynamic, combined with increased competition, has forced many producers to accept lower profit margins rather than pass on costs to consumers.

“Outside of point-of-sale and distribution data, consumer insight panels are also important for gaining valuable information about what consumers truly want and need.”These challenging market conditions have made it critical for companies to drive more efficient operations. By implementing data-driven technology, cannabis leaders can operate more precisely to minimize costs and produce high-quality products. Keystone pricing is a common strategy in today’s cannabis retail market, and manufacturers would benefit from reevaluating how wholesale products are priced to determine the ultimate impact on the bottom line to maximize profits.

Leveraging Data for Growth and Innovation 

For retailers, running a successful cannabis operation with sustained growth is nearly impossible without leveraging in-depth industry data and analytics. Consumer data offers key insights to guide in-store activations, including promotions and discounting, to boost sales for retailers. By utilizing data, including data from loyalty programs, retailers can optimize their product mix based on what consumers are actually buying, and improve scaling and segmenting. From analyzing a store’s traffic to monitoring product, brand and category performance, data is indispensable when it comes to elevating business performance.

Data is also essential for innovation planning, pipeline building and analyzing location-specific variances. Seasonal trends influencing cannabis products often depend on various geographic and socioeconomic variables. While in the past large retail chains often ran the same shelf assortments at each location, utilizing data allows retailers to account for variances that make a significant impact based on location and consumer set.

While some cannabis industry leaders are accustomed to making business decisions based on their gut instinct, data enables them to quantify predictive levels of success and plan for what sales will look like once products hit shelves. Outside of point-of-sale and distribution data, consumer insight panels are also important for gaining valuable information about what consumers truly want and need. As the cannabis industry continues to expand quickly, an increasing demand for products will encourage innovation that will be powered by data-driven intelligence for years to come.