5 Business Lessons From the Cannabis Industry
April 20th is around the corner – which means that the cannabis industry (and many other industries, for that matter) is getting ready for Weed Day. Dispensaries, retailers, growers, distributors, manufacturers, and laboratories gear up for this day in the same way that most retailers gear up for Black Friday.
As a company who has had the pleasure of working with cannabis businesses, we know that they’re some of the most innovative, dedicated, informed, and adaptable businesses in the global market. So, to celebrate Weed Day, we put together the top five business lessons we can learn from this trailblazing industry:
1. The right technologies will customize buyer experiences and improve customer service.
Many cannabis businesses use in-store and online interactive product or service knowledge bases and self-serve software to customize buyer experiences.
Online customers almost always tap into a knowledge base before placing online orders. Most in-store customers do preliminary research with digital signage (i.e. iPads, tablets, computers, touchscreen monitors) by the time they reach the checkout counter. These knowledge bases deliver customized experiences by catering to modern purchasing needs. Case in point, 91 percent of customers would use digital knowledge bases if available. On top of this, knowledge bases cut down expenditure on human resources. Employees can optimize their availability for only the most pressing customer inquiries. Non-cannabis businesses should take these cues from the industry and empower customers with self-serve technologies.
Many cannabis businesses also integrate their customer support, CRM, and marketing automation software systems with their point-of-sale platform to create more seamless customer service. For example, integrating a CRM with a point-of-sale platform ensures that out-of-stock items are tracked in both systems – so you can scratch items off your catalogs that are unavailable and prevent poor customer experiences.
2. Educating customers will gain you public trust and increase customer loyalty.
Although the onset of legalization has reduced stereotypes surrounding cannabis consumption, the product is still misunderstood. Many customers are anxious or uncertain. This is why many cannabis businesses embrace their role as information connectors. They train staff to ask many questions before recommending anything to customers and make it their duty to build a knowledgeable staff of friendly, patient, and hospitable employees. No patron – of any kind of business – should feel incompetent or unsure when making buying decisions.
To put customers at ease, employees are knowledgeable about various types of cannabis products or how to use them and answer any questions customers have. They recommend products that meet specific needs and explain how to administer them correctly. Businesses that carry seeds and clones of cannabis plants hire staff with cultivation expertise to help inexperienced growers.
An educated customer is a happy customer, and a happy customer is a repeat customer. It’s important to put staff through formal training, no matter what kind of business you are. Many cannabis businesses hold regular meetings with cannabis experts or key partners to educate staff on best practices and current trends.
3. You can undercut opponents and competitors through community outreach and corporate social responsibility.
To legitimize themselves and stand out from competition, cannabis businesses often give back to their local communities through highway or beach cleanup, volunteering at fairs and events, or running donation drives or charity fundraisers.
They also take corporate social responsibility quite seriously. Cannabis is still stigmatized as a dangerous drug by anti-legalization proponents. Businesses (dispensaries and medical centers in particular) address some of the public health concerns raised by this group by offering in-house wellness services. Acupuncture, aromatherapy, massage therapy, yoga and fitness classes, nutritional advice, mental health services, and pain management resources are some examples. Some even provide agricultural and cultivation seminars, cooking with cannabis classes, and guest lectures from educators, activists, scientists, politicians, and prominent members of the cannabis community.
These extra services strategically position them as meaningful contributors to society in contrast to opponents and competitors, but more importantly, drive community participation and engagement.
4. It’s better to be safe than sorry – so prioritize operational compliance.
Operational compliance in the cannabis industry is exceptionally complicated and inconsistent. Although some states and counties have legalized cannabis, it’s a federal crime to possess, use, distribute, and sell it.
Growers, distributors, dispensaries, retailers, manufacturers, and laboratories all have unique operational compliance obligations. Most obligations are mandates from regulatory agencies (i.e. Bureau of Cannabis Control, Department of Food and Agriculture, Department of Public Health), tax laws, zoning and agricultural laws, local license and ordinance requirements, and odor or waste management regulations. Luckily, there are dozens of cannabis-specific compliance software solutions to address compliance, many of which include:
- Automated checklists for compliance with regulatory and government agency reporting systems
- Notification safeguards for current (or future) compliance violations
- Updates of visitor logs, waste logs, receipts and labels, inventory audits, and transportation manifests – to track processes, account for missing products, and validate customer information
- Chain of custody records with two-factor authorizations and permission-driven user profiles
Violation of operational compliance puts cannabis businesses at serious risk. They may lose the trust of their customer base, cause serious harm or illness with faulty products, face lawsuit, or be forcibly shut down by authorities. But the cannabis industry has risen to these challenges with the help of emerging compliance technologies.
5. Keep up with market trends and adapt catalogs to meet customer needs.
There is no secret recipe to success. All businesses must be able to keep up with market trends and adapt product or service catalogs by staying informed. Research, market data, and consumer reports help, but customer surveys are better.
Many cannabis businesses rotate products in their catalogs, prompt customer feedback, and incorporate that feedback into the next rotation to better understand preferences. While non-cannabis businesses may not be able to change up their catalogs per say, they can improve or change their catalogs to better meet customer needs. The key here is adaptability, not so much variety.
However, variety is important. The cannabis industry is aware of this – as evident by the commonality of expansive product portfolios with various price points. For example, many dispensaries include flowers and concentrates, as well as various edibles, tinctures, and topicals. This way, their business serves all budgets. Dispensaries typically take the ‘one-stop shop’ approach and also sell accessories like pipes, vaporizers, grinders, torches, papers, and other items to address customer needs.
This year on April 20th, let’s remember that behind this whimsical holiday is a budding industry of hard-working professionals with a lot of heart – and that we can learn a thing or two from them!
Stay in the Loop
Subscribe to get all our latest content sent directly to your inbox!