ROADMAP TO RETAIL What Cannabis Retailers Look For When Choosing Which Products to Carry - Roshi
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ROADMAP TO RETAIL What Cannabis Retailers Look For When Choosing Which Products to Carry
AN EVOLVING INDUSTRY, AN No matter if the brand is a subsidiary of a large
well-capitalized multi-state operator or a ‘mom
EVOLVING BUYER and pop shop’ operating in a single state, there
While the cannabis industry is still in its infancy are simple, analog practices that brands can
and new product categories are continuing to deploy in order to successfully earn their place in
emerge, many brands are still finding it to be a a retailer’s inventory.
highly competitive market to enter. Whether a
plant-touching licensed brand, or, a brand that BEFORE YOU GET STARTED
leverages co-packing and distribution partners,
Long before picking up the phone or writing an
product differentiation, quality, and packaging are
email to a prospective buyer, there is a significant
paramount to success, but are they enough to
amount of pre-work that must be done. Have you
get the product in a retailer’s inventory?
ever received a phone call from a solicitor that
In a panel discussion with top cannabis retailers pronounces your name wrong, or received an
on how they evaluate and curate which brands email that is so generic or irrelevant to you or
and products to carry, strategic account and your business that it immediately gets deleted?
relationship management at every step of the This is exactly what it is like when approaching
process were the key themes behind a brand’s retailers. There are hundreds of brands vying for
success at retail. In the past, when the number of their spot in a retailer’s inventory, so without a
brands and products were limited, in some cases plan and strategic approach to their first contact,
showing up on vendor days with large garbage brands run the risk of their calls being ignored,
bags of flower and product samples were all you emails deleted, or, in the worst case annoying
needed to get your product on the shelf. buyers and losing their chance of ever being
However, today’s retail buyers are now experienc- carried. The cannabis industry is fast-paced and
ing what most mainstream consumer packaged for buyers, the inbound product pitches are
goods (CPG) buyers have been dealing with for coming in at a high volume, so it is in the best
years; too many brands and too little time. As a interest of brands to identify and demonstrate
result, many retailers have recruited experts from how their brand will benefit retailers and ultimate-
the CPG industry to lead their Procurement ly how choosing to work with them will, in turn,
Teams, and with that adopting new buying make their lives easier.
processes and methodologies. It is imperative
Heather Humble, Head
Buyer for The Apothecarium,
a full-service recreational
and medical cannabis
dispensary with locations
throughout the United
States, says, "The first thing
is to do your homework on
the retailer. Understand what
they are already offering on their shelves, the
that brands recognize the new level of sophistica-
demographics they are targeting, the location the
tion that is being added to the buying process,
retailer is in, etc. And, if they have multiple
and evolve their own practices to stay relevant to
locations, know how the demographics might
the retailer and competitive among their peers.
change from location to location.” Buyers are
Page 1
focused on building the perfect product portfolio pete head-on with their in-house brands. The
that drives sales by meeting the needs of their cannabis industry has a unique model of vertical
own customers. For buyers, the products to carry integration, so while in most other industries
for both online and brick-and-mortar retail chan- brands aren’t running the risk of competing
nels are rooted around knowing their customers against their retailers, in cannabis that can
and curating a thoughtful, well-rounded product certainly be the case. Eric McNeil, Product
Director of SPARC, says, "Being
vertically integrated, our own
products generally come first. It
all comes back to the product
though, and if it's something that
I can stand by and my staff can
stand by. It just has to fit with
what we're looking for."
portfolio. As such, brands need to understand
Industry research is an integral part of a cannabis
how their product differentiates itself and/or
retail buyer’s role. So, while brands should not
complements other products the retailer carries.
talk down other brands, it is still important for
Heather Humble continues, “Know how your
brands to fully understand market trends, their
products can fit into the set and understand how
industry position, and their competition. Buyers
you're different from what's already there.” It is
attend industry events, subscribe to newsletters,
important to highlight that a brand’s research and
and frequent social media and other information
positioning should not be focused on how they
outlets in their quest to stay ahead of trends - so
are better than a brand already being carried by
brands should too. In fact, the best possible
the retailer. That brand could be the retailer’s
position a brand can be in is to demonstrate its
long-time supplier, a strategic partner, or even
own knowledge of the industry and become a
the producer of their best selling item. Buyers are
resource of information for a buyer. As brands
intentional about their selections, so while high-
embark on their research, here are the top areas
lighting a brand’s product differentiation is neces-
to focus on:
sary, approach this topic as portfolio augmenta-
tion rather than replacement or displacement.
Heather Humble affirms, “I don't want to pit
brands against brands, items against items. I want “Know how your products can
to be thoughtful about how I'm choosing items to fit into the set and under-
complete my set and where a product might fill
holes in my assortment." stand how you're different
from what's already there.”
Doing this level of research also enables brands
to look within to determine retail outlets that will - Heather Humble, Head Buyer
work best for their own brand. Just as not every
brand is a fit for every retailer, every retailer is not
a fit for every brand. There is no need to waste
the time of your team or the buyer’s if your brand
or products do not align with the target demo-
graphics of the retailer, or, in some cases com-
Page 2
RETAILER RESEARCH CHECKLIST
Store demographics by location
Brands/products carried in-store and category set
Top-performing brands/products in-store and category set
Poor-performing brands/products carried by category set
Shelving strategy by category
Price points of other products in the category set
Retailer-owned (vertically-integrated) brands/products carried
Retailer’s white-label products
Retailer's mission, vision, and philanthropy
Retailer's promotional programs
Page 3GETTING IN THE DOOR time might be to circle back, log an action in your
CRM or other calendaring tools, and in the
Preferred methods of how to reach a buyer vary meantime, continue to build the relationship
from buyer to buyer and store to store, but through other means. A successful salesperson
irrespective of the mode, it is all about building will always work to find multiple inroads to an
relationships. While most of the business world is organization, building relationships, and provid-
driven by relationships, we find this to be even ing support at all levels.
more true for the cannabis industry. Andrea
Brooks, CEO of Sava, an e-commerce/delivery
retailer in the California Bay Area, emphasizes the
importance of referrals. “Getting a warm intro- "In every interaction, I am
duction from someone is the best and goes the
farthest - a referral ensures research has been
checking to see who listens,
done and the individual doing the referral works to build a connection,
believes the brand to be a good fit for our com- knows what I want, knows
pany. It doesn’t matter where the referral comes
from, getting a referral from anyone in the organi- what I have, and under-
zation (a driver, employee, etc.) makes a greater stands what Sava is about."
impact." Even if brands do not directly know
someone who works for the retailer, they should - Andrea Brooks, CEO
navigate and leverage their networks. Review
social media sites, messaging groups, and other
industry databases to reach out to make introduc-
tions.
We know that getting a referral is not always
possible, so that is when brands need to be
strategic and pay close attention to the instruc-
tions and signals from the buyer. As Brooks says,
"I'm looking for someone that listens to me. If I
THE PERFECT PITCH
tell them the timing isn't right, but they keep For some retailers, regardless of whether the
following up with me, it makes me cautious to brand is coming as a referral, is an emerging
work with them. Sometimes a no doesn't mean brand, or an established brand looking for new
forever; it's just a no for now. In every interaction, retail outlets, all inbound inquiries are submitted
I am checking to see who listens, works to build a through online forms or portals. These forms are
connection, knows what I want, knows what I not designed to be black holes that are never
have, and understands what Sava is about...We reviewed. They are in place to help structure the
are all getting full inboxes, and sending me data for retailers and serve as a database/reposi-
constant emails (especially if I've asked them to tory to review when they are looking to expand
stop) is the quickest way to get off my list.” categories or add certain types of companies and
Persistence is a fundamental tenet of any good brands to their portfolio. Likewise, product
salesperson. But so is listening, and you must one-sheeters are effective tools in providing
listen to what is being said. If a buyer is saying it’s retailers a brief overview of what a brand is all
not that right time, use this as a signal that about. As stated by Eric McNeil, “One-sheeters
dictates your next action. Find out when the right are a great way to provide me with a quick view
Page 4of whether or not what is being presented is a instances where robust sales data does not yet brand or product I would like to engage further exist, leveraging macro-level trend data on similar with. It should not just be expensive product brands and/or products is valuable. For example, shots, but rather provides me with the content I include relevant information such as, “the bever- need to take the next step.” Given this, brands age category is experiencing an 8% should dedicate time and energy toward populat- year-over-year growth.” Similarly, brands can ing these forms and/or sending product pitch show growth data on a micro-level, such as content, because if there are no warm handoffs or "Retailer X showed a 20% lift in sales week over introductions available, their product pitch may week on this SKU." Examine data from all aspects need to stand alone. of a product to pull together a compelling story. If Having done product research, brands will have the brand is new and does not have any retail determined their initial fit for the retail outlet and data to leverage, the focus should shift toward assessed how their brand overall will fit into the product innovation and differentiation. Many retailer’s inventory. Next, brands need to deter- buyers look to champion new brands and are mine how best to articulate their brand and craft excited about partnering in bringing new prod- messaging that is concise, yet memorable. It is ucts to the market. Eric McNeil of SPARC says of important to highlight key attributes that may be working with new unestablished brands, "I want of particular interest to the buyers. For example, to be the person that brings you on. I want to as a woman-owned and operated business, Sava train you and help you scale and help you grow. has made a commitment to support wom- We will work with you on pricing and let you en-owned brands by ensuring at least 50% of the know what is working and not working. If I see products on their menu are woman-owned. In potential in a brand, I will try to help them get addition, they have since expanded their man- better. I will share sales data with my brands." date to include allocated space for black-owned, BIPOC, queer-owned brands, and that overall As brands develop their product pitches, whether their shelf equity comes through. Doing your in print, digital or through form submissions, here research will bring forth these types of insights, are some key highlights to include that can make and it will be important to include these attri- their product stand out against the rest: butes in your product pitch as applicable. Let’s not forget that at the end of the day it’s all about a brand’s product and its capability to sell in the market. As a new brand, using data to support their products is vitally important. Even in Page 5
PRODUCT PITCH CHECKLIST
Company Background
Brand and Contact Information (Websites, Social Media, etc.)
Ownership: LGBT, Black Owned, Veteran Owned, Woman Owned, etc.
Mission / Vision
Operations & Logistics
Distributor Used
Contractual and Payment Terms
Product Attributes
How Product Complements Other Products Being Carried
How Product Fills Void in Product Portfolio
Price Position
Growth Planning
Store Reach
Product Velocity and Performance
Order Volume Capacity
Product Roadmap
Page 6SAMPLES ARE THE NEXT FIRST to prefer phone, email, or even digital communi-
cation via online platforms depending on the
IMPRESSION individual and circumstance. In a recent poll of
Every interaction is a new first impression. As in retail buyers, the majority reported preferring
any new relationship brands and retailers are still email communication for new brands and only
in the early stages of courtship where every wanted to receive texts from brands they are
interaction is being assessed to see if there is a already working with, but again, being a good
long-term fit for a partnership. And, the phase of partner is knowing your customer. Sava’s Andrea
sending samples is a critical moment. Brooks says, "I hate getting texts. I want every-
Surprisingly, when done wrong, product sampling thing in email because it's easier for me to track
can be a point of contention with many buyers and to ensure nothing is missed.”
and ultimately reduce a brand’s chances of being
carried. First and foremost, only send samples
when asked or approved by a retailer. This means
brands should not send METRC transfers or "Communication is very
samples for SKUs that have never been important. If something is
discussed. Speaking from direct experience, both
Eric McNeil and Heather Humble recall, "I've had slowed down or there is an
times where I received a product sample from a issue, reach out, let us know,
brand that I had never been approached by, and I
wasn't sure what was going on. It really threw me
send a confirmation when
off because it made me question that relationship you know, etc. When you get
with the distributor, or with the brand that was in a new door, communica-
presenting to me." In addition, brands should
always follow compliance protocols. We are now tion needs to be your top
operating in an “above board” industry, where priority."
traceability and compliance are integral to our
supply chain. Providing samples outside of the - Waylon Broussard, Executive Director
METRC system raises huge red flags for retailers, of Coast to Coast Farms & The
and also puts them at regulatory risk. With that General of 3C Farms
said, samples are a must-have, and a given step
in the assessment and onboarding process for
any brand. At the end of the day, it all comes
down to a retailer’s ability to sell your product to
customers.
COMMUNICATION EVERY STEP
OF THE WAY No matter what the preferred mode of communi-
As soon as you begin working with a retail outlet, cation, proactive, frequent communication will be
find out how each buyer likes to communicate in key to earning a buyer’s trust. Buyers understand
particular situations. The cannabis industry has that at times issues arise within your supply chain
been notorious for text message communication, that are out of your direct control such as ship-
but as the industry evolves, others are beginning ment arrival times, product shortages, stock-outs,
Page 7etc. Being transparent, communicative and requires both high volumes of product, and
helpful in these situations enables your buyer to frequent just-in-time ordering. Be prepared to
pivot internally to make other arrangements and answer questions about how your supply chain is
ultimately earns their trust. Waylon Broussard of managed, and spend time investing in inventory
3C Farms and Coast to Coast Cannabis says, management software and technologies that will
"Communication is very important. If something help you be successful. It is evident to retailers
is slowed down or there is
an issue, reach out, let us
know, send a confirmation
when you know, etc.
When you get in a new
door, communication
needs to be your top
priority."
Additionally, when approaching communication which brands are managing their supply chain
it’s always best to err on the side of over-commu- from spreadsheets, and which have implemented
nication; don't take anything for granted. Andrea sophisticated tools that help them stay ahead of
Brooks gives an example of how a lack of com- the curve. Heather Humble describes the supply
munication about changes to a brand's product chain related questions she asks, "If you're a
formulation changed their trust and relationship manufacturer, I want to find out where you get
but could have been mitigated. "The product your raw materials from, I want to know if you
they (the brand) shipped was a completely differ- have contracts, what happens when there are
ent dosage, and they never told me. I needed to quality issues, if you are vertically integrated,
know. It's a whole different product. It's a whole where there are potential opportunities for
different SKU. I need to be able to communicate production delays. I want to hear very transparent
down the line to my employees. I can switch information about potential recalls and how
products and make allowances, but I need to you've dealt with recalls in the past, etc. I also
know.” Active communication is what can save a want to know about your distributor. Do we have
relationship. a good working relationship with the distributor?
Is the distributor out of our region and will take a
SUPPLY CHAIN EXCELLENCE long time to get to us? And most importantly, I
want to know that you are able to back up with
Following through on your commitments is critical
consistent supply and that the quality will be
to earning trust and making it easier overall on
consistent each time we order the product.”
retailers. Being a reliable supplier and partner not
only makes everyone’s lives easier but demon- It takes time and energy from all sides to onboard
strates the sophistication of a brand’s operations. a new brand/product into a retail outlet. Eric
There is no more important commitment for a McNeil from SPARC reports similar concerns, "A
brand than ensuring there is always inventory in brand may think they're ready to launch, but
stock and available for their retail partners. For they're not ready to scale. Product availability has
Heather Humble, who is the head buyer for four to be consistent. I've had situations where we
stores and counting, it is even more critical that agree to bring a product on, and it sells out, and
brands have their supply chain operations in then we can't get it back for another month or
order. Managing stock levels across four locations two. If I get my internal team and customers
Page 8excited about a new product, go all-in on market- er, but leaving it to a retailer to sell the product is
ing and the product sells out quickly and is not not a strategy that will set a brand apart. When
back in inventory for months, it's a problem.” building a following for the brand and products,
brands should work equally as hard to create a
following for their retailers where they are carried.
Brands should look for creative ways to showcase
“If I get my internal team and a retailer in their marketing, such as geo-targeting
customers excited about a their database to let customers know of a product
being carried at the retailer closest to them, or
new product, go all-in on creating co-branded swag that the retailer can
marketing and the product use as part of a promotion, or maybe doing a
sells out quickly and is not new product launch exclusively at a particular
retailer, etc. Waylon Broussard says that, “a
back in inventory for months, win-win example is a brand that is as invested as
it's a problem.” we are in moving their product. As a dispensary,
we are advertising, marketing, educating our
- Eric McNeil, Product Director staff. With virtual events, the traffic isn't as high,
so get creative on how you're going to get the
awareness out about your brand. We want to
have both a push and a pull strategy in place. A
push strategy is a brand being out there creating
a buzz, such as a demo show or social media,
doing live feeds, etc. The pull aspect is, how are
you driving them into my store to buy your
product? Are you including my store in your
Not only is product availability key, but the logis- marketing strategy? The win-win is both a brand
tical aspects are just as important. Due to storage as well as a store succeeding."
and space concerns or upcoming special
holidays, many retailers utilize just in time order- Another example of a win-win can be accom-
ing for their products. Eric McNeil adds, “When I plished working with a brand’s distributor.
place an order, I expect that product to be deliv- Working with a distributor can make it easy for
ered within the week. Some distributors have a retailers to try a brand before committing to large
lead time of 10-14 days, which is a problem for minimum orders. Heather Humble explains, "I
me because I may need it for the weekend, and if understand why smaller brands have a minimum
it shows up two weeks later, I may need to reject order dollar amount, or unit quantity amount that
it. Timely delivery is important.” they need for us to hit for orders, but with slow-
er-moving items it becomes hard.” As such,
CREATING WIN-WIN distribution partners are a great channel for
smaller brands to leverage, as many distributors
RELATIONSHIPS are no longer applying order minimums to a
A win-win is where both the retailer and the specific brand but rather to the entire order
brand benefit from something happening. Of instead. This provides a channel for retailers like
course, it's great when a product sells well, The Apothecarium to support smaller brands and
making money for both the brand and the retail- provide them with an opportunity for shelf space.
In addition, smaller order sizes can help brands
Page 9get the opportunity to enter into new retail You can offer your products together at a
locations as their success in market penetration is discount, or maybe a gift with purchase such as a
being tested. co-branded t-shirt when purchasing a flower
product with a pipe, or a beverage and a cookie,
PROMOTIONS AS A PARTNERSHIP etc. Another popular favorite with consumers is
BOGO (Buy One, Get One). The Apothecarium
Every retailer will have a strategy and action plan worked with a pre-roll brand that wasn't having
for their promotions, whether paid or free for the success selling their cones to offer a cone for a
brand. Brands should find out what types of penny with the purchase of a pre-roll pack. The
promotions the retailer offers, their promotional promotion successfully sold packs and introduced
schedule, and plan for how they can deliver a consumers who enjoy flower to a product they
successful promotion for the retailer. Many retail- may not have tried before and helped move a
ers will have a designated day of the week to stale item from its inventory.
promote and offer discounts on specific types of
items, e.g., Waxy Wednesday. A brand may be Non-cannabis samples are not popular with all
invited to do an in-store demo when its products retailers, but some find them useful to promote
are promoted to speak directly to the consumer. new products whose customers consider the
These opportunities can be highly impactful, so flavor or texture when purchasing. Beverage,
be prepared to make an impact. When the edible and topical brands that want to promote a
opportunity to interact with customers arises, it is new product launch may choose to offer non-can-
time to have your "elevator pitch" down. Be nabis samples that can be included in exit bags
ready to tell customers, concisely, what is unique as a way of creating a following.
about your products, the effects, and show off
your brand's personality. Pull your best swag EXPAND WITH DATA
together and send them out to promote and
advocate for your brand. As the industry evolves, data analytics are driving
decision-making across organizations, and this is
Retailers will often promote their new brands on no different for buyers. Getting a foot in the door
their website and other digital channels, including with one product is not a guarantee for product
email and social. And, many will offer scheduled expansion at that retail outlet. For an established
paid promotional packages to showcase different brand that may want to justify a product exten-
products that include some social posts on their sion, using data to support the buyer in taking a
channels, a dedicated email blast to their data- chance with a new product can help win them
base, and featured product placement on their over. The Apothecarium's Heather Humble says,
site. "Letting me know that an SKU is doing well, that
you're seeing growth at other retailers, or a
New brands can benefit from collaborating and particular category is doing really well right now
getting creative to create a valuable promotion is great, but back it up with data. I love data.”
for a customer without paying full price for a Furthermore, in line extension situations, brands
promotion or offering a discount. A typical might see some crossover. Brands should present
customer will purchase two to three items per these extensions highlighting the thoughtful
transaction, so look to ensure that your product is strategies behind the expansion. For instance, if
one of them. See if there is a complementary they are a brand of concentrates and are now
product or ancillary item that the retailer carries doing a line of infused pre-rolls, the joint objec-
to do a co-promotion to share promotional costs. tive would be to capture a customer who is not a
Page 10concentrate user and introduce them to the actions to improve. Retailers are growing their
brand. Or, maybe they are a flower or pre-roll Procurement Teams and leveraging data to
buyer, and it introduces that customer to the generate supplier scores and review supplier
brand and introduces them to an infused product. performance on an ongoing basis.
Brand expansion within a retail location is not just
about assuming brands already have customer RELATIONSHIPS TAKE WORK
loyalty and can simply drop a new product.
Product expansions should be strategic in nature As with any relationship, there is a sequence of
and introduced with intent. steps that are required to build a long-lasting
partnership. And that is no different for the
CUSTOMER SUCCESS
cannabis brand and buyer relationship. First and
foremost, getting to know the retailer is the first
Once a relationship is forged, and a brand’s step. Brands should complete their research to
products are being purchased, it's time for brands establish a strong foundation for their relation-
to show that they care as much about maintaining ship, and to increase the likelihood that their
the business as they did about getting it. A relationship advances. Once they begin to inter-
common mistake with new sales representatives act with a new retailer, focus should shift to open
is to turn over the responsibility of an account to and frequent communication in order to build
production once a store is carrying their brand. trust. This level of trust will come into play as
The time invested from both sides to build that operational logistics take the forefront, where
relationship in many respects is lost, and building most commonly new challenges arise. To that
it up again comes with risks. Continuity is an end, those brands with the strongest operational
important part of account management, as issues excellence will find themselves most successful in
arise they are able to be handled quickly and scaling their products within and across new retail
efficiently by those with historical context. locations. Products are the heartbeat of the
business for any
brand, so ensuring
their supply chain is
efficient and orga-
nized is an important
element of keeping
their brand alive.
Mostly importantly,
relationships take
Customer success is an often overlooked func- work and need to be nurtured. A brand’s ROAD-
tion. Customer success is the process of under- MAP TO RETAIL is not a one-time event, but
standing customers’ challenges and proactively rather a process that continues as the brand and
finding solutions to help boost their happiness retail relationship continues to grow.
and retention while increasing your revenue and
customer loyalty. Brands have the opportunity to
get ahead of the rest by leveraging their own
CRM data to look at order history, ordering
volumes, frequency, shipping times, customer
escalations, etc. in an effort to continually monitor
customer relationship health and take necessary
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