Inside Skymint

After more than 20 years of working in traditional retail, Summer Ransom thought she knew almost everything about the science of selling merchandise.

But since joining Skymint, one of the leading cannabis retailers in Michigan, as the company’s president of retail, the former Urban Outfitters executive says she’s been humbled to discover how much she had to learn in her transition to a new industry. Moving from clothing to cannabis forced her to be far more cognizant of the many marijuana-specific state laws, ranging from merchandising regulations to inventory management to traceability, as well as an entirely new set of product categories.

“I love it,” she says of the opportunity. “Having done the same thing for so long, it’s not challenging any more. You start to lose your edge a little. Now, I’m constantly curious and learning more every day.”

Michigan: By the Numbers

January 2020

Medical

Total sales

$25.2 million

Average retail price of flower

$276/ounce

Sales breakdown

Flower: 42%

Vape cartridge: 30%

Edibles: 14%

Concentrates: 12%

Other: 2%

Active retail licenses

200

Average processing time for an application from receipt to approval/denial

203 days

Adult-Use

Total sales

$9.8 million

Average retail price of flower

$512/ounce

Sales breakdown

Flower: 49%

Vape cartridge: 26%

Edibles: 15%

Concentrates: 7%

Other: 3%

Active retail licenses

16

Average processing time for an application from receipt to approval/denial

58 days

Source: Michigan Department of Licensing and Regulatory Affairs

Yet, at its core, cannabis retail is still retail, and Ransom has helped Skymint rise to the forefront of the difficult new market by drilling down on retail fundamentals.

While other retail sectors have struggled in North America, Ransom says cannabis “is still one commodity or product you can do really big, really amazing things with in a brick-and-mortar store.”

Before joining the company full-time in October 2018, Ransom worked for Skymint for six months as consultant, working on different aspects from design to merchandising.

“We want the stores to be approachable and fun, not intimidating,” she says. But the layout is not just about aesthetics; the shops are also designed with efficiency in mind, providing customers with enough space to browse the open floor if they choose, but also allowing people who know what they want to get in and out quickly.

Ransom sees similarities between cannabis retail and coffee shops, which have a high percentage of repeat customers. She expects Skymint to see some shoppers several times a week. Because of that, she has implemented seasonal floor sets and regularly updates the sales layout, moving and reorganizing displays and bringing in new products and brands — a practice that is standard in most retail categories, but not yet commonplace within the cannabis space, particularly in Michigan’s new regulated market.

“I learned a lot at Urban Outfitters about the power of merchandising and not having a static sales floor,” she says. “Customers want newness when they come in.”

Skymint focuses heavily on analytics, breaking down revenue into category sales, best sellers and slow movers, and looking at the top-performing brands and strains.

“We really dig into analyzing our business, because customers will tell you what they want with their purchases,” Ransom says.

While flower remains the top-seller on both sides of the market, edibles at Skymint have seen a huge bump in the adult-use sector, moving ahead of vapes and concentrates, which are the company’s second- and third-best selling items on the medical side.

Skymint currently has six retail locations in Michigan and plans to open 14 more over the next two years. Two of its shops — Ann Arbor, as of January 9, and White Cloud, as of February 13 — have begun adult-use sales, while the Bay City, Flint, Newaygo and Nunico provisioning centers remain medical-only.

Ransom says she’s anxious for Skymint to open additional stores for the adult-use market, but some municipalities have opted out of rec sales and, even for those that have opted in, sometimes the licensing process can be lengthy.

The biggest change from medical-only sales to serving both medical and recreational customers is the sheer volume, Ransom says. In the first month of adult-use sales at the Ann Arbor location, 93% of sales were to recreational customers. The average Michigan medical dispensary in January had $125,000 in sales, while the average adult-use shop clocked in at over $610,000 (though it’s worth noting that there are more than 10 times the number of active retail licenses for medical than recreational).

While the revenue boost is crucial — “It’s a lot easier to manager payroll and product turn and stuff like that,” Ransom says — the adult-use sector also opens up more marketing avenues than the narrow demographic of the state’s registered patients.

“You can do a lot more cross-promoting,” she says.

However, one obstacle with serving both the medical and recreational markets is a quirk in the Michigan regulations: Inventory must be designated “medical” or “recreational” and kept separate.

Retailers can’t sell medical products to recreational consumers or vice versa — even though the products are almost exactly the same (some merchandise, like edibles, may have potency limitations on adult-use products). It forces some shops, like the Ann Arbor Skymint, to carry two sets of inventory. The store could, in theory, sell out of its adult-use products and have to turn away customers, while having an overabundance of medical cannabis in stock.

Currently, about 75% of the products Skymint carries are in-house brands, manufactured by its parent company, Green Peak Industries. The other 25% of products, including accessories, are from third-party suppliers.

“People want variety and assortment,” Ransom says.

Skymint has been continuously refining its operations since opening its first retail location in Bay City in July 2019 and now the company is circling back to its early shops to implement the concepts learned more recently, Ransom says. While in most regards cannabis operates no different than other, traditional retail categories, Ransom says she’s noticed that consumers tend to be skewed heavily toward men, with only about 30% of the customers being women, despite a “female-friendly” design. It’s a trend she expects will shift closer to 50-50 as the market develops and as cannabis in general loses some of the stigma with which it’s long been associated.

But despite the hurdles of the Michigan market and the growing pains associated with Ransom says she’s thrilled to be a part of the movement and to be able to serve customers of every age demographic. The way cannabis is being displayed today, in an open, everyday manner, as opposed to the dark, hidden dispensaries of old, will only continue to help move it toward acceptance, she says.

“I don’t know that I would have ever seen myself here 10 years ago, but it’s such a cool, misunderstood industry and plant that I’m so anxious for it to become more mainstream and destigmatized,” Ransom says.

Comment

One response to “Inside Skymint”

  1. Roland Bigley says:

    Very interesting story !

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