Photo: Curaleaf
Pandemic ‘fast-forwarded everything’ for nation’s largest cannabis retailer
The cannabis industry has its own set of idiosyncratic challenges due to its federal legal standing but, during the first wave of pandemic lockdowns, chain dispensary Curaleaf found itself, like all other retailers, also facing the challenge of pursuing digital transformation to do socially-distanced business.
In a BrainTrust Live session on LinkedIn and Facebook earlier this week, Chris Mellilo, vice president of retail for Curaleaf, spoke with RetailWire editor-in-chief George Anderson about the steps Curaleaf took to reshape its operations to meet customer needs in places where cannabis retailers were labeled “essential” at peak lockdown. This consisted of most of the states in which Curaleaf does business. (The company has recently expanded to 23 locations with the acquisition of dispensary chain Grassroots.)
“The pandemic on the whole has absolutely changed everything we do,” Mr. Mellilo said. “The silver lining there is it has fast-forwarded everything we needed to do, which is catch up to more traditional expectations of retail.”
The lockdown-induced enhancements included:
- Geolocation via their website which points people to the nearest dispensary and provides a menu of cannabis products so that the customer can order remotely;
- Curbside pickup where necessary;
- Debit cards built around their hand-held ATM solution to eliminate cash transactions.
The “essential” label and the need to provide socially-distanced service allowed Curaleaf to benefit from the relaxation of some state regulations; for instance, they were able to begin doing delivery in some states where it had previously been illegal to do so.
The ultimate goal of the retailer is to streamline the retail cannabis experience into something less medical-feeling — which is often the case, due to legal cannabis’ roots in medical-only dispensaries — and more comfortable, providing for all levels of familiarity with the product and all ranges of desire for interaction with in-store staff.
Curaleaf is also envisioning taking unprecedented steps in the space, like having consistently branded cannabis products available throughout the country on the model of a traditional CPG like Coca-Cola.
Even amid loosening restrictions, cannabis retailers like Curaleaf are still a ways off from the mainstream, especially due to banking restrictions which prevent them from processing remote transactions.
Discussion Questions
DISCUSSION QUESTIONS: Will the pandemic give cannabis retail a push in the direction of being treated more like traditional retailers? How do you see legal cannabis retail progressing in the next five years, and do you think Curaleaf’s attempt to create a national brand of cannabis products will come to fruition?
Poll
BrainTrust
David Naumann
Marketing Strategy Lead - Retail, Travel & Distribution, Verizon
Kevin Graff
President, Graff Retail
Enabling debit card purchases, curbside pickup and delivery are big steps in making cannabis retailers seem more like traditional retailers. I always thought it was an odd law that everyone had to pay in cash at cannabis stores. During the past five years, many cannabis retailers have raised the bar on professional looking stores that appear more clinical than the “head shop” feel of other stores. There is also a move to much bigger chains as independents are being gobbled up by big investors. This industry was due for a change and the pandemic is accelerating the change.
Until our federal government and banking institutions pass laws and policies to allow the cannabis industry to operate and trade like other retailers, they will operate as if they were in the 19th century. It is difficult to move to a digital strategy when the use of cash is the only means to trade. Granted, cannabis retailers have gotten creative by creating shell merchant accounts to fly under the radar of processors and banks, but these are not legitimate solutions to move into the 21st century and beyond.
Yes, the pandemic will push cannabis closer to mainstream retail.
In recent years, cannabis has made inroads in grocery, wellness and beauty, as consumer attitudes shift in favor of this new product segment. Now cannabis spans sectors performing well in the pandemic: retail, manufacturing, logistics, tech and healthcare.
Momentum and mainstream acceptance will help legal cannabis thrive in the next five years.
Traversing a labyrinth of conflicting city ordinances, county regulations, and state and federal law is the single hurdle to moving cannabis retailing into the mainstream, and COVID-19 isn’t hyper-accelerating progress in that arena. So my vote would be no. Sure some superficial changes have happened, but we are talking about a potentially huge industry still in its infancy. Where I live you could legally posses cannabis in Windsor; legally posses it in Detroit; and be arrested crossing the border between Windsor and Detroit. That’s the problem. I assume cannabis sales will continue to increase. When you see arch conservatives like John Boehner becoming cheerleaders for the cannabis cause you know two things: one there’s a large fortune on the horizon and everyone is getting in position to grab it; and the forces which have historically been opposed to any “drugs” are now promoting it meaning the profit opportunity has superseded their “morality,” or they just want the population stoned so they’ll be easier to herd, or both. I assume once the legal/regulatory issues are resolved you will see a massive rollup or consolidation with major branders capturing the lion’s share of the industry and small boutique growers/retailers producing the cannabis equivalent of craft brews.
Hello from the land of legalized cannabis … Canada.
Some of the best looking stores here are in the cannabis sector. There’s still invisible handcuffs on them that doesn’t allow them to run their business the way the liquor industry does. However they are quickly moving in the right direction, and the pandemic has pushed them along faster. There is amazing demand and not nearly enough stores yet.
Five years from now will see cannabis retail being completely mainstreamed and operating the same, if not better, than every other retailer. Curaleaf is just one of many that are on the right path.
It’s too bad we had 50 years of anti-marijuana political efforts which built this opposition in society to even fundamentally smart things. That a marijuana retailers cannot use traditional banking is one of the clearest evidences of how badly we’ve messed this one up.
Unfortunately, the opposition to changes remains strong in circles where any contact with marijuana is seen as a religious issue.
That makes me a skeptic about how well society will accept and regulate marijuana sales – thus losing the tremendous social benefits which come from removing this drug from illegal distribution and the social ills which accompany the illegality.
The results are in and cannabis is seeing acceptance in all age groups. Whether it’s to help with arthritis or provide a calming affect for anxiety, consumers are open to this new treatment. The fact that we’re seeing adoption in national chain drugstores, big box retailers, and subscription boxes is evidence that it’s going mainstream. This pandemic has only progressed the adoption and I’d imagine in 5 years, people won’t think twice about seeing it at their favorite retailer.