Home Uncategorized Immature Cannabis Markets Have an Untapped Ace in the Hole — Dispensaries

Immature Cannabis Markets Have an Untapped Ace in the Hole — Dispensaries


All cannabis dispensaries are not the same. Each is its own entity, bearing the stamp of the company that created it, when, and in what state. In states newer to the cannabis trade, dispensaries are often noticeably more immature in their appearance and retail strategy.

Take Michigan vs. California, for instance. Market research in both states will reveal vastly different layouts. When comparing dispensaries it’s a bit like the difference between going to a local convenience store to buy wine or going to a specialty liquor store where there are many more options.

Or, it’s like the difference between the makeup counter at Walgreens and walking into Sephora. The former might conveniently provide what a consumer needs, but the seemingly endless number of choices offered in the latter, not to mention the overall experience, not only provide what’s needed, consumers have a plethora of options — many they didn’t even know they wanted — they’ve come to expect in the marketplace.

Northern and Southern California cannabis provisioning centers are often lined from floor to ceiling with no less than 300 different product lines. That much choice is not always a good thing, as it can be overwhelming for a cannabis novice — or a seasoned veteran — but once consumers acclimate to the choices, they’ll begin to appreciate the options available to find just what they need for medicinal purposes or want for recreational purposes.

Statistics forecast that adult cannabis sales in Michigan could grow to $1.9-$2.4 billion by 2024. So, the demand is there, and it should spur more immature markets like Michigan to look to more competitive markets in states like California for guidance on how to ensure that a diverse array of cultivators and processors are represented on dispensary shelves. Michigan the number of product wholesalers available in Michigan pales in comparison to its California peers, so there is a lot of work to be done.

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Price differences can be justified

There is also a noticeable difference in price between dispensaries in mature vs. immature markets. California cannabis products are exponentially higher in many categories, yet consumers often don’t mind paying because they are confident the quality is high. 

That emphasis on quality impacts cannabis offerings on multiple levels. For instance, the California retail experience exceeds that found in other states by miles. Customers can often smell flower products, making the process of coming in-store much more engaging and interactive. Even the smallest stores in California have more variety than their equivalent in Michigan, and budtenders are often more excited, and they have a great deal more knowledge to share.

Design to help customers get what they need

Many store designs are also far superior in California than you might find in a market like Michigan, which could explain why customers are willing to pay more for products. 

In more mature markets, having a high end, very appealing store appearance offering a diverse selection of high quality cannabis products is the norm, at least it is in the “legal” stores. Unfortunately, illegally run pop-up retail stores are also common in California. But the legal dispensaries with their informative staff, interactive, consumer experience, and abundant stock, far exceed what Michigan and other newer states in the cannabis game are able to offer.

If more immature markets like Michigan hope to catch up, there are three things they must accomplish. First, cultivators must make producing clean, premium strains of high quality cannabis the norm, a gold standard, essentially. The prevalence of black market products is a pervasive issue, and consumers have to be able to differentiate between those products and the cannabis sold in dispensaries. Cultivators have to make the dangers in those products known, positioning trusted, legal dispensaries as the preferred, safe alternative. 

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In order for that to happen, however, all of the cannabis companies in the industry must unite around the need to produce products free of pesticides, heavy metals, and toxins. We must prioritize product safety and establish standardized testing protocols to ensure it across the board.

Cannabis companies must also offer more variety for both flower and processed products. Retail operations in more immature markets like Michigan lack variety in all categories, specifically in the budding demand for extracts, including edibles, which offer the end user the ability to ingest cannabis without inhaling. Consumers deserve that. 

Further, dispensaries should factor in new cannabis consumer purchasing habits brought on by the pandemic. There are quite a few new services available from online ordering and home delivery to curbside pickup and in some cases, dispensaries have even installed drive-thru windows, all to maximize customer safety and enable cannabis retailers to maximize sales.

Do not ignore the power of branding

Packaging is an important part of any savvy cannabis company’s strategy because just as with any other product, consumers need visual cues, attractants to help them make choices. So, branding is also important. 

Packaging is the first touchpoint to enable customers to experience a brand. The typefaces, color palette and logo chosen represent a feeling, an experience, we hope is not only memorable but sellable at scale.

Packaging should educate consumers as well. They need information to choose the right products for their particular health or wellness needs, and packaging should be easy to use and reinforce safety so they know no tampering has occurred.

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Third, for immature cannabis companies like those in Michigan to catch up to their more sophisticated peers in markets like California, retailers must level up when it comes to how they present products to the public. That includes everything from the dispensaries design and layout, to their employees’ knowledge and training.

How cannabis products are presented matters because it influences the customer experience, which is critical. Color and decor choice, end caps, floor space, these traditional aspects of retail have to be creative in dispensaries as well as practical. Further, these physical spaces have to blend well with digital offerings.

It may take years for more immature markets like Michigan to catch up to the convenience, diversity and quality of the plethora of dispensaries available throughout the state of California where customers have myriad premium products to choose from. But by considering key things like dispensary design, product packaging, not to mention the quality of the cannabis itself, places like Michigan can create unique and engaging cultural experiences for cannabis consumers.


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