The cannabis industry lags behind other retail sectors, primarily due to its long history of prohibition and persistent strict regulation. Cannabis is one of the most regulated markets in the country.
Rules of distribution for cannabis and CBD products and their use vary not only by state but also by the city and even block by block. As markets are constantly changing, there’s a lot to keep up with. Let’s look at what’s next for retail and how you can stay ahead of the curve.
The Next Big Investment Boom
While cannabis has had a storied past, investors are starting to view the industry with fresh eyes. Faced with new opportunities after legalization, retail cannabis is stepping into the limelight. Up for grabs, it is one of the most lucrative modern markets. Legalized cannabis has the power to transform both culture and economy, but it won’t be an easy road.
According to Pew Research, 62% of Americans supported marijuana legalization in 2018. That is twice the number of people who supported it in the year 2000. That growing support has translated into 33 states with medical marijuana and 10 states and Washington D.C. with recreational marijuana. Additionally, retailers across the industry offer discount codes and exclusive offers on CBD products, making it a very active sector.
What’s Next for the Cannabis Market?
We are in a new age for cannabis, where manufacturers have more incentive than ever to bring high quality products to consumers.
The industry is beginning to operate as a collaborative ecosystem. Third party lab testing for unwanted particles, accountability, and transparency are the vital factors that lead to responsible purchasing and consumption of cannabis products.
As the sector evolves, the following factors will be vital to keep up with your competitors.
In the near future, customers will no longer step out of the house to buy commodities, including cannabis. Retailers will engage with their target audience by connecting with them in their homes, either online or in person.
One-on-one consultations are increasingly important to consumers, as many are seeking to be educated about various products and their uses.
Cannabis will soon be the next great American industry. Many retailers in the industry are even shifting back to the “traveling salesman” system, wherein product representatives visit potential buyers in their homes and recommend products based on their specific requirements.
The customer base for medical marijuana often includes first-time buyers. Manufacturers should aim for packaging that is both informative and aesthetically appealing. Cohesion is key.
Cannabis Industry Journal drives this point home: the design of the product must align with your brand. If the consumer feels there is a disconnect between brand identity and packaging design, it creates a sense of discomfort. As explained by TheCannabisRadar.com, “Clean, simple design is reassuring and inspires trust.”
Curating the Right Products
In this retail climate, those who are able to effectively curate products for their customers are the winners. Long passed are the days when retailers could stock up on random products with the hope that the people will buy.
Shopper’s today have a myriad of products to choose from. At the end of the day, they’ll buy from those who have curated their offerings to meet the unique preferences of their customers.
The merchants in the cannabis industry are creating thoughtful hand picked products such as tinctures, bath bombs, or other artisanal products they know their targeted audience will value.
Curating cannabis based on individual customer data is pivotal. Multimedia Journalist and Digital Marketer Julia Ho emphasizes on the potential of personal data for curating cannabis businesses.
Ho concludes that since curation helps marketers to target consumers with advertisements, it can be used to understand various complexities regarding their health status. This data could be assessed in conjunction with recreational habits to prescribe medical cannabis more accurately.
Inventory and Packaging
Cannabis isn’t sold in baggies anymore. Flower is increasingly sold in pop-top bottles, concentrates in glass vials, edibles in specifically labeled wrappers, and so on. Marijuana packaging has become a multi million dollar ancillary industry.
The growth of the cannabis packaging industry has paralleled the astronomical growth of the overall marijuana trade. Looking forward, keep an eye on emerging trends and requirements such as custom packaging, child resistant packaging, and so on.
Advertising and Marketing
Cannabis can indeed sell itself, especially in states with recreational markets. But, when it comes to advertising for cannabis companies, it is far from a one-size-fits-all setup. About 80 percent of what you can do with advertising is locked off from the cannabis world.
When it comes to advertising, cannabis companies will have to be more creative and personalized.
Word of mouth can account for a lot of sales. But, when it comes to marketing for cannabis companies, it is far from a one-size-fits-all setup. At present, digital marketing plays a vital role when it comes to marketing your brand and creating brand awareness.
Marketing is what will make you stand out amongst your competitors in the online marketplace.
Delivery and Online Retail
Thousands of medical cannabis patients shop for products online without leaving the comfort of their home. There’s a definite value in offering products and services online, but those products have to be delivered. At this point, California is one of the only states to allow delivery of cannabis products.
There are so many regulations surrounding the sale and delivery of cannabis and those vary from state to state. Typically, cannabis products cannot be shipped across state lines with the exception of verified CBD-only products. This poses a challenge when attempting to operate online sale and delivery models and is why most dispensaries are brick-and-mortar stores.
The retail industry of cannabis is a brave new world for consumers and investors alike. The early entrants to the industry who have access to capital and a large retail footprint will likely lead the charge. The future of the cannabis retail industry will depend on its ability to overcome the challenges put forward by lawmakers and regulators.