Taking Care Of Dispensary Business In This Competitive Cannabis Market

It was only a few short years ago that going to a cannabis dispensary was a little like a clandestine visit to a loved one in prison. The windows were barred and it was a case of your name’s not down, you’re not gettin’ in. Not to mention the scary security guards on duty and the more often than not underwhelming, dingy facilities we were presented with.

But those days are long gone, with cannabis consumers stepping into the light and increasingly demanding a higher and more pleasurable shopping experience — and that’s not just from the weed they ingest, but the store they purchase it from.

So, how do dispensaries come up with new and exciting ways to keep their clientele interested and set it apart from an increasingly crowded, competitive pack?

From grow-room tours to express parking, as well as creating the biggest cannabis store on the planet, there are a whole host of ways bud-centric business owners are rising to the occasion when it comes to providing a positive shopping experience in their dispensary businesses.

One dispensary intent on giving clientele something special is Denver’s Seed & Smith, the vertically integrated production, extraction, wholesale and retail cannabis space in operation since 2014. And it is the company’s grow rooms that are proving the biggest draw, thanks to the 40-minute guided tour of the cultivation facility offered by its knowledgeable staff.

Brooks Lustig, chief operating officer of Seed & Smith, says, “When we pull up the shades to these large grow rooms, which are on day 50 and day 60 of flower, people are blown away. When we walk them through the extraction room, and they can see the pumps running, it is almost perfect. They see what is happening and what you are making and how that process works, and it’s almost a guarantee they are going to buy a product in the gift shop at the end of the tour.”

Lustig explains how he and his fellow Seed & Smith co-owners were inspired to come up with the tour concept by examining microbrewery experiences. “The ownership team grew up in Denver, Colorado and saw this explosion of microbreweries. We all turned 21 as this was happening, and it became a thing — you have a beer while you view the beer-making process. That was the value that was really important to us — the transparency value. I like to tell people the tour is part brewery tour, part Ben & Jerry’s tour, part [tea company] Celestial Seasonings tour.”

The Seed & Smith cultivation tour runs every day, and even accommodates larger coach tours.

“It would be naive to say we would compete with all the other dispensaries in Denver as well as we do without having some sort of tour, or something to differentiate Seed & Smith,” Lustig continues. “However, being in our location so close to the airport, we also have something that is convenient, a great experience and also interactive.”

Asserting that it’s not just the cultivation tour that sets Seed & Smith apart from other Colorado dispensaries, Lustig explains it’s also the attention paid to customer service and individualizing each customer’s purchasing experience. “Seed & Smith is a store that my mom and my grandmother would come into and find it a relaxing place to shop. You don’t want people to feel like they are essentially going into a prison to buy marijuana. It is amazing to me the people who come in who haven’t consumed cannabis since Woodstock in the 1960s, and they are so excited to be part of this revolution as a consumer. Or there are people who are trying cannabis for the first time and just turned 21, and here we go, we have another avenue.

“It is amazing to me the trust the consumers have in the budtenders and the customer representatives, and we are very transparent about where this product comes from, how it’s made, what’s put into it,” Lustig continues. “My advice [to dispensaries] is, you never want to violate that trust with your patients and your customers. And that all comes down to training.”

While Seed & Smith only sells flower and concentrates, and not edibles, another issue Lustig says the store unexpectedly encountered as it grew and expanded was having to accommodate cannabis storage space and workable ways of displaying its growing inventory of products.

“Storage space for any dispensary is not glamorous, but it remains an issue for any dispensary. It comes down to specifics. For us, we were trying to stack stuff as high as we could in the back rooms, and we ran into some code issues. We were also struggling for display space for our own brand. There are so many cannabis brands out there, and so many companies that have every gizmo and gadget and say this is the best and insist on putting it on the counter.

“If you are an integrated business like we are, you want a clean display lined next to each other, one by one. At the same time, your average shopper isn’t necessarily just looking for your brand, especially if you don’t cover the full spectrum of cannabis products.”

Seed & Smith offers a 40-minute guided tour of its state-of-the-art cannabis cultivation facility.

Rosie Rothrock is the vice president of branding and marketing at Caliva, one of the leading cannabis dispensaries in San Jose. She explains that, following California going fully recreational last January, which resulted in a huge shift in the clientele they were seeing, her dispensary had to pivot its focus to accommodate customers at the counter. “We noticed this huge increase in time spent at the counter,” Rothrock explains. “Customer time jumped from six to eight minutes, to 12 to 22 minutes, which was huge. They needed more education, they had more questions, and they wanted a true consultation.”

So, how did Caliva account for this increase in time budtenders were spending with customers, as well as the need to enlighten them?

“We rearranged the store to accommodate an express line and we digitized the store menus. Plus, we created a section of the shop floor where [customers] could educate themselves and come to the counter with pre-educated questions.”

Caliva also allocated an outside section for express parking, so clients who knew what they wanted could have a quicker purchasing experience.

The internal design of the store has also been a focal point that Rothrock feels elevates customer experience, although she reveals with a sense of pride that Caliva’s updated format has since been ripped off by competitors, something that she takes as nothing more than flattery.

“We have reverse engineered the store to be more of a flagship. It doesn’t cost a lot to make a beautiful experience, but you have to back it up with fully trained staff,” she adds. “What we have done to freshen up our business model is [utilize] a full Digital Stack, which is a digital app we’ve added for both check-in and menu-browsing purposes.”

Rothrock says Caliva has been described as what it would be like if Starbucks and a surf shop had a baby, with the space designed with lots of exposed timber to provide a calming, warm environment. “Yes, we have low price points, but when the time comes, [this is an environment where] you feel comfortable enough to convince your elderly mom to come to. We had to have a lobby, where customers are checked in and greeted, getting them excited about entering [the dispensary floor]. We have music playing. One customer said it was like walking through the doors of Narnia!”

Security personnel at Caliva also purposely dress down in polo shirts to appear less intimidating to customers. Indeed, how security guards present themselves plays an integral role in Las Vegas dispensary Planet 13’s approach to staying steps ahead of competitor dispensaries. With 40,000 square feet of floor space currently in use, Planet 13 ranks as the largest in the world, with further plans to expand into its full premises, totaling 120,000 square feet, by way of a cannabis-centric entertainment complex and coffee shop.

Planet 13’s full-service experience includes valet parking — and decorative neon flowers on the roof.

Co-CEO Bob Groesbeck explains of the concept behind Planet 13, “Nobody wants to shop in a prison; people want a high-end experience and they want to feel safe. You don’t want a bunch of 300-pound, 6-foot-6 guys standing there, staring at you. As a customer, you want to go in and feel comfortable. You want to see people around you.”

He adds, “This industry is still fairly new and there is still a stigma attached. [Customers] are absolutely shocked when they walk through the doors and they see what we have built, because they have a perception that we came out of the basement a couple of weeks ago, and it’s going to be iron gates and a bunch of burly security guards.”

Groesbeck strives to ensure medical marijuana patients feel particularly looked after the moment they step through the doors at Planet 13. “They were there for us from day one. When you check in, we see your medical card and we put a smiley face on your shirt. We think that is important.”

Perhaps the biggest obstacle for Planet 13 was convincing the cannabis community to believe in the concept of the cannabis superstore before it launched: “There were huge challenges — namely, getting people to see the vision. But it’s cool if they don’t get it. My response to them is, ‘I’m glad you don’t get it, because that is what makes us unique.’ That is our bridge and our goal. That, and you have to understand the market you’re in. We wouldn’t build this flagship operation in Reno, for instance. This is Las Vegas.”

Finally, does Groesbeck have any advice for fledgling or struggling dispensaries? “It is heavily competitive out there, and it’s important to understand the wants and needs of customers. You really need to stay focused, because this game changes daily. You only get one shot.”