(This story appears in the November-December issue of Marijuana Business Magazine.)
Once extraction is complete and finished products are made, there’s still one important step for marijuana-extraction companies to execute: Selling their manufactured goods to consumers.
Marijuana firms looking to sell their concentrates and infused products for top dollar should consider:
- Getting samples into the hands of the right budtenders and making sure they understand what they’re selling.
- Pricing cannabis extracts and infused products correctly.
- Placing products with the best stores—not every store—and in creative ways.
“The X-factor is getting creative,” said Case Mandel, founder of Humboldt, California-based Cannadips, which makes tobacco-free, CBD-infused pouches. “You have to create something authentic, and you have to be dynamic.”
The first point of contact between product manufacturers and the consumer is often the budtender. Getting sales associates to recommend one brand over another requires a belief in the product—and maybe some incentives.
“Getting to those people and educating them is key,” Mandel said. “They’ll become beacons for what you’re trying to do.”
In California, budtenders are often mature and well-versed in the products available, so quality often wins out, he added.
But Mandel says it’s important to go a step further: For example, he suggests taking the region’s top 20 budtenders to the company’s facility for a getaway once a year. A site visit and a weekend away will show the sales associates how products are created and serves as a reward for recommending the brand.
At Denver-based Clear Creek Extracts, a subsidiary of edibles, vapes and concentrates producer Medically Correct, co-founder Derek Cumings believes in persistence when it comes to giving out samples to budtenders.
“Sometimes you give away a lot of products, then you catch a whale,” he said of getting samples into the right hands. “Good product and a good value are the most important things.”
Peter Barsoom, CEO of Denver-based edibles company 1906, floods budtenders with samples before handing out educational materials.
“Doing that education after they’ve had an opportunity to sample our product resonates more,” he said.
Barsoom also believes in sales incentives. For one contest, the three budtenders who sold the most 1906 products received cash rewards.
While some budtenders will push a product that’s cheap but high in potency, Barsoom said cannabis consumers are more discerning, especially in mature markets.
“People will pay for quality if they perceive it’s giving them high-quality ingredients from brands they trust,” he added.
Mandel agrees that the extract market isn’t a war where the lowest price always wins, but he also believes consumers are price sensitive to a degree.
In California, for example, he sees some lower-quality products still garnering market share. Therefore, his goal is to make high-quality products as affordable as possible. A tin of Cannadips retails for around $18.
Cumings said prices for marijuana extracts and infused products can be fluid, so he recommends staying current on pricing trends by spending time in retail stores and asking for reports from the sales team.
“You don’t want to be outpriced, and you also don’t want to give your product away,” he said.