Marijuana has been legal in Washington and Colorado for longer than any other state. Both have seen their cannabis industries evolve and grow for the past six years. By most standards, the experiment has been a resounding success.
However, the business has not been without setbacks. One of the most obvious has been the unrealized dreams and financial losses suffered by the ill-prepared and poorly capitalized. In short, for most, the easy “green rush” money never materialized and those that did make it had to work hard to earn a buck. The lucky ones that survived the initial year or two rapidly evolved and sharpened their skills.
Entrepreneurs in states like Illinois, Oklahoma, Maryland and Michigan, with relatively new medical or adult-use cannabis programs, would be well-advised to visit Colorado, Oregon and Washington for a dose of reality. The actual cannabis industry might differ greatly from their romanticized version.
For example, in Washington there has been a steady move in retail away from fancy, gimmicky stores that emphasize an “experience” and toward a much more customer-centric approach that resembles most traditional retailers’ operations.
Ramsey Hamide, owner of Main Street Marijuana, Washington state’s top-selling cannabis retailer, stated it quite simply: “The No. 1 customer concern is price, and No. 2 is selection.”
He and other retail leaders have come to understand that ads on Leafly, social media marketing, fancy stores, endless Yelp reviews and gimmicky promotions do little to drive store traffic. What does drive traffic and sales could be called Retail 101: Great prices, great selection, great location (with parking), friendly budtenders and weekly specials.
We’ll be doing an article in an upcoming issue about one such retailer that took over a high-end designer cannabis store in Seattle and gutted the expensive interior. Replacing the jewelry-store-style display cases, Greco-Roman fixtures, huge potted plants and Louis Vuitton atmosphere were big screen TVs with sports and news, an expansive selection of well-displayed products along a well-lit wall, aggressive prices and friendly, engaging budtenders. In other words, gone was the upscale pretense and in came a decidedly blue-collar, consumer-friendly look. The results? The new operators nearly tripled the sales of the old store. Monthly revenue went from roughly $250,000 to more than $600,000 in the first 90 days of operation.
I visited the revamped store on a weekday and there was a steady flow of traffic at 1 in the afternoon. Customers were helped quickly by friendly budtenders, and it was obvious that the majority of the clientele knew exactly what they wanted, happily paid for it and went on their way.
The lesson seems clear: Consumers may talk a big line, and there may be some room for high-end cannabis retail. However, in the end consumers appear to shop for cannabis just as they do for groceries, clothes or hardware: They want convenience, great prices and friendly staff.