How cannabis retailers can leverage market data to boost revenue

This is part of a regular series of MJBizDaily interviews with major THC industry players. To be considered for an interview, contact editorial@mjbizdaily.com.

Laurie Parfitt knows cannabis retailers are sitting on data they don’t use

The problem isn’t access, said Parfitt, a Chicago-based marketing executive who offers her services to companies on a contract basis, with 17 years in consumer-packaged goods and a background in data analytics that she now applies to cannabis retail.

After all, platforms like Headset, BDSA, Hoodie and New Frontier Data all sell market intelligence to operators, investors and the industry at large.

The problem is that most cannabis businesses don’t know what to buy, why they need it or what decisions the data can drive once they have it, Parfitt told MJBizDaily.

“Operators don’t know what’s happening outside their four walls,” said Parfitt, CEO of LKP Consulting. “They don’t have the staff and the mindset to understand it.”

Why don’t cannabis operators use data systems?

Parfitt described a predictable cycle: An operator gets excited about data, signs a contract for a new data provider, sits through a training session and walks away thinking the dashboards look easy.

Then nothing happens.

The typical retail store manager wears many hats – procurement, marketing and shifts behind the counter among them. Without data at the forefront of their minds, weeks pass without anyone logging in.

When an executive finally asks for a specific number, the manager can’t remember how to find it.

“They get frustrated,” Parfitt said. “They don’t want to call because they’ve been trained, and they don’t want to look stupid.”

“Then the program comes up for renewal, and they’re asked whether it’s helpful.”

Pride, she said, kills adoption. When employees don’t ask questions about how to use a system, they’re not extracting the value from it.

That reluctance to ask questions leaves valuable subscriptions unused until they lapse.

How can data help cannabis retailers?

Parfitt pointed to concrete examples of what the data reveals when someone actually reads it.

She worked with a Colorado retailer that had just purchased Headset data to determine the product mix they should carry. Their assortment ran 30% concentrates. Colorado skews higher on concentrates than most markets – but not that high.

“You should really be at 10%,” Parfitt said.

She also found a gap in their edibles offering. The retailer carried no products from Wana Brands, the second-biggest traffic driver in the category.

“You have edibles, but you don’t have Wana,” she said. “Why? They had no idea.”

Promotions revealed similar blind spots. Some operators run deals because a competitor across the street offers them, giving away margin to attract deal hoppers on Weedmaps without a clear objective.

“Take Waxy Wednesday,” she said. “They think they have to do that because the guy across the street is doing that.”

“It’s a strategy but not a great one.”

Her fix? Stop copying and do something different: Change it to Wyld Wednesday.

In one Colorado engagement, Parfitt changed the entire assortment, cut products that weren’t performing, revised the promotional strategy and ended the dispensary’s contract with Weedmaps.

Why is using local data important?

Parfitt cautioned against treating cannabis like CPG. In packaged goods, national data lets operators benchmark broadly. Cannabis doesn’t work that way.

Each state sets its own tax rates, licensing caps and sales rules, so prices and competition vary sharply across borders, making a single playbook unworkable for multistate operators.

“You can’t compare California and Illinois – it just isn’t the same,” she said.

Early in Parfitt’s cannabis work, mature-market coverage from providers like BDSA didn’t extend to the states where she was working, so she ran a primary consumer research study, setting up a mock dispensary to watch how shoppers moved through the cannabis category.

Coverage has since expanded. BDSA, Headset, Hoodie and New Frontier now offer overlapping but distinct products, each measuring the market a little differently.

BDSA leans on retail sales tracking, Headset pulls dispensary point-of-sale data, New Frontier models demand forecasts and Hoodie sharpens pricing intelligence. Few operators need all four. Most start with one that fits their biggest question, whether that’s shelf performance, pricing or where demand is headed, then layer in others as budgets and blind spots demand.

How does AI lower the barrier to entry?

The biggest shift, according to Parfitt, is artificial intelligence. Headset’s new “Ask Headset” function lets people in the cannabis industry query data in plain language without technical skill.

“Just ask it – top 10 edible brands in New Jersey, revenue and units for the last complete 12 months – I need it ranked, and I need velocity,” Parfitt said. “That’s new. That’s the evolution of the data.”

But there’s a catch. Users still have to ask the question correctly, specifying the right timeframe, metrics and units.

“You need to know what data you want and ask for it,” Parfitt said. “You can keep asking the questions. The AI can’t get mad at you. You have to play with it.”

How have the platforms evolved?

How the providers break down data varies.

Some providers collect and scrub point-of-sale (POS) data, aligning it with the broader market the way Nielsen does in CPG. Others scrape ecommerce menus to capture information no one will hand over directly.

Headset now layers several products: retailer dashboards that display an operator’s own data for free, with paid upgrades for higher-level views, insights that show masked, state-by-state activity on brands and promotional strategies; and a bridge tier that helps manage inventory, letting a brand alert a dispensary before it runs out and recommend order quantities.

The common goal across all of them, Parfitt said, is making the data approachable for the average person.

Why does 280E make spending feel risky?

Cost is at the center of the reluctance. At least for now, adult-use cannabis retailers remain hamstrung by Internal Revenue Service Code Section 280E, the federal tax provision that blocks cannabis businesses from deducting most ordinary expenses on their federal returns.

In that context, spending five figures on data feels burdensome, Parfitt said. So, operators lean on their POS and commerce dashboards and drop the subscription.

That often solves the initial pain, Parfitt said, but not the underlying problem of not knowing what you’re doing or why.

What’s Parfitt’s onboarding fix?

Parfitt’s advice for getting operators to stick with the platform is to assign them a business question and ask them to pull the information from the platform to answer it. Then meet again in a week to discuss what they discovered. 

The follow-up meeting checks whether they used the right platforms and pulled the right numbers. Watching someone else build the answer doesn’t count – people must do it themselves – seven times – before the data becomes second nature.

“People need to see things seven times before they engage with it,” she said.

Margaret Jackson can be reached at margaret.jackson@mjbizdaily.com.