Cannabis Retail Environments: Opportunities for a Challenging Industry

cannabis and experiential marketing

Wherever you are across America, chances are good that your state’s approach to cannabis has recently changed — or is just about to. As more and more states relax their laws, legal cannabis sales are exploding. In 2018, legal cannabis was a $10.4 billion industry in the U.S. In Massachusetts alone, recreational sales have topped $140 million in just six months. With numbers like that, cannabis has quickly attracted attention from investors and entrepreneurs, and new startups are looking for ways to get their brand in front of an open field of consumers. Suddenly, cannabis and experiential marketing are looking like best buds.

Businesses looking to cash in on the green wave are quickly running into difficulties, and not necessarily the ones you would expect. If there’s one word to describe the cannabis market in the U.S. today, it’s “challenging.” But what marketer doesn’t love a good challenge?

The State of the Market

Here’s the lay of the land: You have a young, rapidly growing industry and competition is ramping up. You have a consumer base that went from zero to millions overnight, but no company is starting out with a big customer database. You have consumers who are new to the market and they’re unfamiliar with the options, still working past lingering social stigmas, and a product that you definitely can’t try before you buy.

On top of this, there are still big question marks about legal issues. To put it bluntly, the state laws on cannabis are complex and constantly in flux.

When it comes to marketing, you’re blocked from many traditional channels like print, TV, and radio. In California, you can’t even advertise on a billboard if it is on a road leaving the state. Digital is just as much of a labyrinth for cannabis marketing. The legal cannabis market has been hamstrung by its lack of support from the likes of Instagram and Facebook, which will not allow legal marijuana sales on its platform, nor will it allow distributors to market their product.

Cannabis Retail Design

What options does this leave a company looking to grow its business?

Cannabis businesses are looking to educate, differentiate, and build connections with consumers — this is where experiential marketing excels.

Retail environments, in-store activations, lectures by experts and influencer events, interactive learning, digital displays for product that can be on the sales floor — these are time-tested techniques in experiential marketing for consumer products that are just now being picked up and applied to cannabis retail experiences and a budding schedule of cannabis trade shows across the country.

Where cannabis clubs and clinics once hid behind frosted glass and curtains, the new crop of marijuana retailers is casting open their doors as wide as possible to shine a light on their products, bring in consumers and outpace their competitors. And once inside, consumers need an experience that at once calms any nervousness they might have, and then guides them through the growing array of options and accessories. This is where today’s retailers are differentiating their designs and experiences, some opting for bright, welcoming experiences that have more in common with an Apple Store than a Haight-Ashbury head shop, others echoing upscale speakeasies, hip cafes, old-fashioned apothecaries or ultra-clean modern pharmacies.

With limited online options to build customer lists, brands are turning to both live events and direct in-store data collecting, using mobile payments, RSVPs, newsletter signups and text messaging to help build their customer databases. When customers can be targeted directly through their devices, this circumvents social media restrictions, and, while higher effort, has a higher rate of return.

While the landscape can be complex and volatile, watch for exciting things from cannabis and experiential marketing in the near future. Cannabis may be learning from other industries right now, but a market with so many constraints is certain to drive innovation.

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