Marijuana retailers that opened during pandemic share winning formulas

marijuana retail, Marijuana retailers that opened during pandemic share winning formulas

Planet 13 reopened its Medizin dispensary in Las Vegas in November 2020. (Courtesy photo)

(This story appears in the May-June issue of Marijuana Business Magazine.)

Opening a retail cannabis store is difficult. Throw in a pandemic, Toronto’s bitterly cold winter weather or the revival of a dormant medical marijuana dispensary, and the new venture could be headed for disaster.

Nevertheless, Forever Buds CEO Vish Joshi said his company’s new store is “killing it” on service in Toronto’s Little Italy neighborhood. The community is responding, Joshi added, even though customers have not yet been allowed in the store.

Forever Buds began sales Jan. 28, shortly after an alarming increase in COVID-19 cases prompted Ontario’s provincial government to declare an emergency and restrict cannabis retailers to serving customers through delivery and curbside pickup.

Joshi and his team persevered and strived to make the outdoor experience as comfortable as possible for curbside shoppers. They set up heaters outside the store to keep customers warm, served hot chocolate while consumers waited and worked hard to fill orders as fast as possible for curbside pickup. Forever Buds also offers a free, same-day delivery service.

“When we got into this business, we wanted to be a landmark,” Joshi said. “We wanted a big splash with a big party. But we couldn’t do it. It’s the worst possible time you can open.”

With Forever Buds’ opening not going according to plan, the team recognized that there were other ways to get the word out, such as holding food drives, raising money for charity and taking advantage of social media.

Joshi’s advice for cannabis retailers who are new to the market? “Don’t give up,” he said. “This is a temporary situation. We’re all trying to penetrate the same marketplace, and there’s enough business for everybody. Stick to your business plan and roll it out. Keeping your doors closed doesn’t pay.”

Make it an attraction

In November, Las Vegas-based Planet 13 reopened its 2,500-square-foot Medizin dispensary. The shop closed in October 2018 to transfer the license to the Planet 13 superstore next to the Las Vegas Strip.

Medizin did $18 million in sales the first year it was open, with profits coming mainly from local residents. To get the word out that Medizin had reopened (the superstore remained open as well), Planet 13 advertised the Medizin store in local newspapers and magazines. The company also advertised on multiple, sequential billboards.

Not only did Planet 13 open a new cannabis retail store in its hometown, but it also started construction on a 55,000-square-foot superstore in Santa Ana, California. Called the Orange County Cannabis SuperStore Entertainment Complex, the shop is expected to open in mid-2021.

Construction on the California superstore started in early February, nearly a year after Gov. Gavin Newsom issued the state’s first stay-at-home order related to the coronavirus pandemic. The Orange County retailer will have 16,500 square feet for the dispensary and additional space reserved for ancillary stores and experiences like the ones at Planet 13’s Las Vegas flagship location.

Planet 13 delivers more than just cannabis products. With attractions that include an aerial orb show, LED interactive floor and interactive laser art, visitors to the company’s 112,000-square-foot Las Vegas shop leave with an experience they’re likely to share with friends on social media, said Larry Scheffler, Planet 13’s co-CEO.

The Orange County store will have a different theme but will still be an experience that visitors want to share, Scheffler said. The tentacles of a 16-foot-tall octopus sculpture in the store’s lobby reach into 500 brightly colored umbrellas that will hang from the ceiling. An interactive floor will suggest waves lapping up on a beach, where visitors’ footprints are left behind in the sand.

“Everybody wants to be entertained, and it’s our job to entertain people,” Scheffler said. “We encourage videos and photos. What’s going to help us is the people who advertise for us—take a picture and send it to their friends or post it on social media. The best advertising in the world is word of mouth.”

In talking with other California dispensary owners, Scheffler said he’s learned that as much of their business these days is coming from delivery as it is from in-store sales.

“We were planning for $50 million in sales our first year,” he said. “If we do as much as that in delivery, we’ll be up to $100 million.”

The pandemic isn’t slowing Planet 13’s expansion to other states. The company is looking at opening superstores in Arizona, Florida, Massachusetts and Michigan. While the company will consider neighborhood shops such as Medizin, its focus will be on developing the larger-format superstores.

Build community

The Farmacy Berkeley had barely opened its doors when Alameda County became one of six California counties to issue shelter-in-place orders. The Farmacy already had built a relationship with the city of Berkeley and was pushing hard to be classified as an essential business, said Kitshwa “Kiki” Genama, general manager of the Farmacy Berkeley, one of the retail brands under the Glass House Group umbrella.

“We had 20-plus employees trying to navigate something that’s new to the world. But the bigger challenge was pivoting and adjusting our operations to immediately launch delivery, which was something we weren’t going to do for three months,” Genama said.

That pivot meant buying delivery vehicles and getting them insured within two weeks of the store opening. In addition to delivery, the Farmacy also implemented a curbside model with different levels of service so that people who were new to cannabis would have extra time to explore the options.

The Farmacy started by serving customers through its modified entrance. The store ultimately spent $50,000 to replace its existing storefront windows with sliding windows and more security for the building. Deeper into the pandemic, when it was allowed to welcome customers back into the store, the Farmacy reconfigured the sales floor layout to accommodate social distancing, with only three to five shoppers permitted inside at a time.

Genama said that at least half the store’s customers were new to cannabis, and most steered away from vaping or smoking because COVID-19 is a pulmonary virus. It was imperative the staff was well-trained about the products available in the store in order to alleviate concerns, Genama said.

“If there’s a new customer or someone who’s in need of a consultation, we’re able to accommodate bringing them into the space and giving them more one-on-one attention,” Genama said. “We had to make sure we got our product knowledge up to par so that people who were coming in droves to get relief from anxiety and insomnia were comfortable that we had enough information.”

That commitment to education helped the Farmacy foster a sense of community among its customers, an outcome of the pandemic that Genama said has served the business well.

“For the people who were being responsible or living alone, this was one of their very limited social interactions in a day,” Genama said. “We built a community around people who love to come in and talk to us. Cannabis is a community of like-minded individuals who are socially conscious and health conscious.”