Cannabis Retail Secret: Sexy Isn’t Success
Chris Jones, Cannabis Xpress founder and CEO, said he found a cannabis retail secret: be a big fish in a smaller pond.
“Location selection is important,” Jones said. “All our stores are profitable, and that’s because we picked areas that aren’t as sexy as opening in Toronto – small to medium-sized towns with little or no competition. My cheapest rent is $400 a month in Wasaga Beach.”
Many who jumped into the retail market are perhaps surprised that cannabis retail secrets are needed at all.
“Everyone opened a store thinking they were going to get rich,” he said. “But a lot of these [cannabis retailers] have weak strategies.”
The numbers lately are either encouraging or discouraging, depending on what you believe. Larger companies including Canopy Growth and Tilray report lower sales. In “sexy” places like Toronto, the per-store cannabis sales are going down.
However, when you look at the actual cannabis sales numbers, the news is very different. Cannabis sales in Ontario, for example, climbed 12.8 per cent in March 2023 year over year, reaching $158.9 million. After lagging a bit, cannabis sales in Canada as a whole are up 12.1 per cent in 2023 as of July. One reason why per-store sales are down is the fact that the number of stores is way up – there are 40 per cent more cannabis stores in Ontario since last year. So perhaps another cannabis retail secret is to look at the right numbers and understand what they mean.
Cannabis Retail Secrets Are Actually Lessons – LPC
The Canadian retail cannabis market isn’t even five years old yet, so there are still many lessons to be learned. In some ways, those cannabis retail secrets are actually lessons.
“I think the market has caught on to the fact that you don’t need large, or expensive, real estate to sell pot,” says Brad Polous, a lecturer in entrepreneurship and strategy at the Ted Rogers School of Management specializing in the cannabis industry. “So like any retail operation, it comes down to first and foremost location, and then the other basics like well-trained, courteous and helpful staff, the right assortment, and fair pricing.”
Normalizing cannabis use is another lesson that the market needs to learn. That includes governments easing cannabis retail restrictions including frosting storefront glass. Making cannabis stores these “hidden” locations promotes cannabis stigma rather than reducing it.
“Customers are getting more educated on what products they like, trying new product types that are easier to use or less stigmatizing than smoking,” Jones said. “Not being able to see inside the cannabis store is intimidating and turns off customers. It doesn’t normalize [cannabis].”
There are still a lot of lessons to be learned – and a lot of cannabis retail secrets to uncover. But Chris Jones and Cannabis Xpress seems to be the poster child for the future of cannabis retail in Canada.
“We’ve gone through different periods of growth,” Jones said. He is slowing down opening stores in Ontario – the focus in now New Brunswick, he said. The real cannabis retail secret is that it’s all about finding the right opportunities. “The plan was always to build, sell, then start again.”
Read the Source Article at Toronto Metropolitan University
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