Photo: Tech Daily
Understanding Cannabis Retail In Ontario
Cannabis retail regulations in Ontario are still murky. While the first 25 retail licenses have been granted, the industry still awaits clarity on the opening of the playing field for others eagerly awaiting a piece of the pie. Regulations are important – we’ve heard companies employing substantial in-house legal counsel to vet through regulatory information as it becomes available. We seem to be making progress in some areas – Lift & Co has recently signed a multi-year contract with the AGCO for its CanSell retail certification program which will be mandatory for all retail employees working in Cannabis stores. However, the current advertising regulations seem to have gaps, leaving them open for interpretation.
What is completely clear though is the fact that large-scale advertising we’re used to seeing for some of our favourite brands will not be permitted in Cannabis. Further to that, the digital platforms we’ve become ever so familiar with – Instagram, Google, Facebook – all have policies against advertising/promoting Cannabis. While each individual company has its own risk profile, the lack of marketing channels will sure be a challenge in a very crowded market.
Succeeding In A Different Kind of Market
So what are Cannabis companies doing in an effort to get ahead?
- Lead With Innovation
- Double-Down On Retail
Organigram Chief Commercial Officer, Ray Gracewood believes one of the best strategies is to focus on retail education and the front line staff. Tons of people are walking into stores with all sorts of questions – highly educated retail staff will be crucial in ‘hand-holding’ in this brand new industry. Merchandising is also a very important part of the retail puzzle. Focusing resources on merchandising vs media impressions definitely seems like a smart play.
Weedbox on the other hand has engaged a restaurant design group to bring their ideas for retail to life, understanding that Cannabis retail will need to be a much different experience than regular retail.
What do you do when the digital tools you’re used to using are no longer available to you? Build your own says Weedbox Co-Founder Jeremy Potvin. Technology is definitely a key differentiator in being able to identify and anticipate customer demands and how best to be available for them. By building their own digital platform to look for particular ‘moments’, Potvin notes that they’ll be in a better position to serve prospects and customers.
There Will Be Winners and Losers
It’s no secret that there are a ton of Cannabis companies, from licensed producers, to Cannabis tech companies and everything in between. In a brand new industry, where the size of the market has been estimated and still isn’t very definitely known, this can provide its own challenges.
What happens when you have a very crowded market with a tiny number of marketing channels?
You have winners but you also have a lot of losers noted Nick Pateras from Lift & Co. And he’s right. In an industry where brand recognition will be a very challenging feat to accomplish, if no one knows your brand, will they ever buy your product in retail or on the OCS? Many customers currently going online to the OCS to make purchases have already made their brand or product decision before even opening their browsers – possibly through referrals from friends, comparison websites or possibly social media. Without an ability to ‘brand’ in the OCS, is it just enough for companies to get into the OCS for their product to sell? Probably not.
Thanks to the panelists:
Ray Gracewood, Chief Commercial Officer, Organigram
Nick Pateras, Vice President of Strategy, Lift & Co
Zachary Pendley, EY
Jeremy Potvin, CEO and Co-Founder, Weedbox
Moderator: Matt Humphreys, CXO, Diff