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July 11, 2022

Welcome to the first issue of the latest MJBiz newsletter focusing on cannabis retail. We'll drop in each Monday to share the latest roundup of headlines and insights on retail operations, sales trends, product innovations, branding and much more.

Based on your interest in cannabis retail, we didn't want you to miss this! But if that's changed, simply update your preferences to get the MJBiz newsletters that best match your current role in the cannabis industry.
In researching this week's news, we learned there's a music genre coined "sadcore." We also learned playing sadcore in retail stores leads to increased sales.

Wait, what?

Yes, really. Scroll down to learn more about curating an audio vibe that sells more.
How music helps retailers increase sales
"Stranger Things”, Season 4 © Netflix
Chances are you’ve been humming “Pass the Dutchie” this summer even if you’re not a fan of Netflix’s “Stranger Things” series that recently brought the 1982 Reggae hit to the top of music charts.

Movie soundtracks are well-known marketing tools, but what about the music you play at your store?

Research shows that the right music has the power to change customer behavior and ultimately boost sales.
Keep it low & slow
You might be tempted to crank up the volume to set the mood, but this study says the trick is to keep the background music, well, in the background.

While music volume has no direct impact on sales, it does affect how much time customers spend in a store. So, if you have a large space with lots of products, playing softer music will encourage customers to browse longer to explore the products and potentially buy more, too.

Another study proved that music tempo can affect both sales volume and how fast customers move through the store. After going downtempo, participating store's sales increased by 38.2%.
Check the vibe
Studies on music and retail seem to agree it’s never just volume or tempo that influences consumer behavior.

Another major factor at play is the mode of your playlist.
Research shows that sad, downtempo music generates 12% more sales than slow and happy or sad and fast playlists.

Does it mean that you have to play “Summertime Sadness” instead of “Pass the Dutchie” at your cannabis store? Depends on which products you’re trying to push.

This study proved that background music can influence not only sales volume, but also the quality of sales. In the experiment conducted for the study, a wine store prompted customers to buy more expensive bottles by playing classical music instead of pop.

That confirms the notion that the background music should be aligned with the general store ambiance and the associations shoppers may have with buying a specific product.

So, if you’re focusing on selling cannabis wellness products, choose calm slower songs or nature sounds for your playlist. Or, if you're promoting energy-boosting cannabis drinks, get more lively with your tunes.
Cannabis discounts on the rise
As recreational marijuana markets mature, retailers are turning more and more to discounts to manage aging inventories and expanding variety of products.
The combined discount on mainly recreational marijuana cannabis sales in nine U.S. states more than doubled over the past five years, from 7% in June 2017 to 15% in April 2022, according to retail data collected by Seattle-based analytics firm Headset.
Sales and discounts
Total sales and discounts from product categories in 9 states.
Percent discount of flower by state
While the use of discounting has varied over time in Western U.S. markets, all have experience increases since 2018.

Source: Headset.
© 2022 MJBiz, a division of Emerald X, LLC.
E D I T O R ' S   T O P   P I C K S
Retail storage woes
Concentrates like hash, rosin or live resin have unique storage requirements.

Solventless extracts such as live rosin can begin to degrade in as little as 30 minutes outside of cold storage.

When concentrates go bad they lose taste, potency and turn a darker color, which usually forces retailers to heavily discount the products.

In a cutthroat market with razor-thin margins, most retailers cannot afford to discount product any more than they already have.

However, by investing in a good freezer and refrigerator, retailers can save themselves from losing more money in the future.
More top retail headlines this week:
  • Retailers in mature markets like Colorado, Oregon and Washington have been struggling to stay competitive amid oversaturation, heavy taxes and overproduction of product.
  • All medical marijuana patients in Washington D.C. will soon be allowed to “self-certify” themselves for a recommendation.
  • Nevada finalizes rules to allow the opening of 60-65 cannabis consumption lounges.
  • Denver-based dispensary chain Buddy Boy announced in June they would be closing down all seven stores, but were shut down early due to alleged nonpayment of taxes. 
  • The Governor of Kentucky announced publicly he was considering implementing a medical marijuana program through the power of executive order, but a Kentucky lawmaker and advocate for legal cannabis said it would not be possible.
Patrick Maravelias,
retail and brands reporter for MJBizDaily
Andrew DeAngelo’s Fight for Harborside and Beyond
Andrew DeAngelo and his brother Steve were legacy cannabis market entrepreneurs and “reluctant activists” before founding one of America’s most iconic cannabis businesses, Harborside Health Center Oakland in 2006.

The DeAngelo’s helped pave the way for today’s legal cannabis industry, and in its heyday, Harborside was the “largest medical cannabis retailer in the world.”

But when Harborside tried to expand into other states, Steve’s cannabis felony proved too big a barrier. The DeAngelo’s retreated to California, but needed investor capital to survive that difficult market, precipitating a less-than-desirable exit.

Listen to the new episode of “Seed to CEO” to hear the key takeaways from DeAngelo’s story.
Union boom: Employees of at least two cannabis stores unionized in June. But this trend has been booming not only in the marijuana industry. Why are employees everywhere joining the unions now

Speed vs. Sustainability: More consumers are choosing delivery options that are good for the environment. Those options happen to be beneficial for retailers, too.  

Omnichannel expectations: Retailers still struggle to provide the experience shoppers expect. 
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