Recreational marijuana retailers looking to pump up their sales should take a close look at their approach to luring tourists, one of the most lucrative segments of the adult-use market.
Developing a solid base of loyal customers who live or work nearby is important. But rec shops that aggressively and effectively target visitors to the region can bolster their businesses with a new revenue source and offset dips in local sales. At the same time, they can expand brand visibility by winning tourist customers who will be your brand’s ambassadors back home – provided they had a good experience.
Strategies include picking a location that is easy for visitors to access, listing your business in a local guide that targets cannatourists specifically, advertising in airline magazines, reaching out to businesses and organizations that cater to out-of-staters, and even organizing your own cannabis tours.
It’s not a cakewalk. Rec stores must overcome notable hurdles to reach tourists, given that adult-use states severely restrict how and where retailers can advertise. Also, social media sites including Facebook and Instagram have shut down cannabis-related accounts.
Still, it’s possible to reach tourists via careful planning, creativity and persistence.
“Tourists aren’t a big part of our customer base, but that’s a segment that we’d like to see more from, which is why we’re trying some of the things that we’re trying,” said Aaron Nelson, director of actualization at 2020 Solutions in Bellingham, Washington, pointing to tourist-minded brochures his shop advertises in and social media and online tools it employs.
Location, Location, Location
One of the most important steps for entrepreneurs fishing for tourists is finding a location that is easy for out-of-towners to visit.
Consider Shy Sadis, a marijuana store owner in Washington state who aims to open his third shop, The Joint, in Burien, a municipality a few minutes from the Seattle-Tacoma International Airport.
“I’ll have the closest store to the airport,” Sadis said, noting his shop will be off the first exit from the airport as well.
The location Sadis chose, a restaurant, wasn’t for sale. But he offered the eatery a price – he didn’t disclose how much – that exceeded its market value.
“The building I got, I had to have it because it was the only spot that was compliant (with local ordinances). They didn’t want to sell, so I had to pay more because of where it was,” Sadis said.
The rec shop, which is conveniently located on the way to Seattle, was slated to open in late January, after this magazine went to print.
Meg Sanders also had tourists in mind when she bought the location for her latest Mindful store, in Aurora, Colorado, which she says will also be the closest cannabis retailer to Denver International Airport once the shop opens.
Another important factor Sanders took into consideration was her location’s proximity to the new Gaylord Rockies Resort & Convention Center, which will have about 1,500 rooms and is less than a mile away. It is slated to open in late 2018.
“We know that (cannabis stores) near hotels tend to see higher traffic,” Sanders said.
To capitalize on her location, Sanders is considering offering a shuttle bus that would transport people between her store and the airport and the hotel. She is seeking a canna-centric bus company that could provide the service, noting that it’s legal to consume cannabis on private shuttles in Colorado.
“There’s no better way to grab tourists than to be the first stop,” Sanders said.
Targeting Tourists Before They Arrive
It’s also possible to reach tourists before they hit the ground.
Sadis, for example, has been trying to place advertisements in airline in-flight magazines. He was in talks with Alaska Airlines, but the company eventually declined (the airline didn’t say why). But he is talking with other carriers about adverting in their in-flight magazines.
The idea is that tourists aboard a flight to Seattle will spot the ad while browsing the magazine and then head to his store from the airport.
Some retailers in recreational states may also be tempted to advertise in print media publications in neighboring states that don’t have legalized cannabis. But Kris Krane, managing partner of 4Front Ventures, a cannabis business consulting firm in Boston, said such advertising carries too much legal risk.
“I would definitely advise against it because it would be a fairly easy way to run afoul of the feds, because you’d be encouraging people to bring these things across state lines. That’s a violation of one of the tenets of the Cole memo,” Krane said, referring to guidance released by former U.S. Deputy Attorney General James Cole.
The memo essentially says that regulated marijuana businesses in states that have legalized medical or recreational cannabis can operate without fear of federal interference provided they don’t violate certain guidelines, such as encouraging the transport of MJ into states where it is not legal.
A more conventional but still effective way to reach out-of-state tourists is through social media and retail review sites like Leafly and Weedmaps.
The best way to get your Leafly or Weedmaps profile noticed by tourists is to provide excellent service to locals, said Nelson from 2020 Solutions. The better the experience your local customers have, the better reviews you’ll receive, and the positive reviews will push your listing higher up on the websites’ search results.
Another helpful aid for drawing tourists is Google Business View, a service that allows people to view photos of your store beforehand.
“People are more likely to visit you if they have an idea of what to expect,” Nelson said.
Sanders said her company uses proprietary tech tools that involve geosensing and geo-targeting, which send content to users based on their location.
“Those are things we’ll use in (the location close to the airport). When you search cannabis when you get off the plane, we will be all over that,” she said. “We know people are using those sites so it’s really important to be as high on that platform as you can be.”
She added that advertising restrictions have forced her to think of different ways to reach a broad audience and build a brand. To that end, one of the first strategies Mindful deployed was to get its name out in the media.
Sanders hired a public relations professional, Erik Williams, who reached out to local media outlets and started forging relationships.
When “60 Minutes” requested to include Mindful in one of its pieces, Williams didn’t say yes right away. But he did make sure the managers and staff were prepared and knew how to present the business in a positive light – and not to put their feet in their mouths when “60 Minutes” arrived for filming.
“At first, we had to reach out to people and build those relationships. Now, it’s more managing requests, and making sure you hit the audience you want and not repeating,” said Williams, stressing that it’s important to avoid sending duplicate requests to the same member of the media.
Sanders acknowledged it’s not every day that a national news show will want to profile your business. She speculated her company was asked because it was the first to get its name out in the local press.
“The challenge is unless you’re putting yourself out there, it’s really hard to create a brand that’s going to pull customers to your stores,” Sanders said. “Through our dedication to earned media, we’ve really become a destination. We hear that from our out-of-state customers all the time (that) ‘we saw you on this, we saw you on that.’”
Reaching Tourists After They Land
Retailers also have other options for wooing tourists once they are in their city.
2020 Solutions in Washington, for example, has found success listing itself in a local publication called Kush Guide that can be found in the brochure racks – nestled in between brochures for whale watch and winery tours – at most hotels in the area.
Some hotels are open to the company’s entreaties, while others are not.
“It’s definitely been a mixed reception. Some hotels are very supportive and others are quite the opposite,” Nelson said. He estimates that about 5% of his customers are tourists.
He noted that it was the Kush Guide publishers that approached 2020 Solutions about listing. Less than 1% of Nelson’s customers say they heard about 2020 Solutions through the guide, but the company plans to continue listing because it’s good for “brand awareness,” he said.
“It’s kind of a novelty to pick up the brochure that tells you where you can buy cannabis legally in Washington. For a lot of tourists that’s their first look at the cannabis industry,” Nelson said.
It costs $500 to $800 per month, Nelson said, but will get your store’s name in places where your shop isn’t allowed. For example, while Seattle zoning restrictions prohibit marijuana stores from opening in prime tourist spots such as Pike Place Market, some places, like the popular Ivar’s chain of seafood restaurants, have brochure racks that include the Kush Guide.
“It’s a little steep,” Nelson said of the Kush Guide price, “but that gets you access to a lot of tourists.”
Personal relationships are also important, and retail owners and managers should make efforts to connect with their counterparts at hotels, bars, restaurants and tour companies. Why? Because visitors to a recreational state may ask their hotel concierge, waiter or tour guide where the best place is to buy a pre-roll. If you’ve made the contact, they could recommend your store.
“You’re basically forming alliances with people in your state who are already dealing with tourists, who could then recommend them to you. That’s a fairly cumbersome strategy, but one that could pay off, particularly in advantageous tourist locations,” said Krane, the consultant. “You’re not going to be successful unless you try. You are going to encounter some resistance, there are going to be places that don’t want to talk to you, and that’s OK, because others will. ”
Retailers seeking to cement their brand with tourists may also consider playing tour guide themselves.
2020 Solutions was recently contacted through its website by a group of tourists who asked if it could cook some infused products for them during their visit. Nelson told them his staff couldn’t do the cooking, but he connected the New York group with a local chef he knew who wound up handling the culinary side.
Neslon’s staff also arranged tours of some of its suppliers’ facilities and directed the group to musical venues.
“Being a young company we have a lot of people on our team that are used to making the guest experience an exceptional guest experience,” Nelson said. “Regardless of what their needs are, we’re usually willing to help them out.”