CannaBiz Diaries: Journey to create social currency by selling an experience

Last February, I went on a trip to Los Angeles and was amazed at how openly recreational marijuana was used. My astonishment was beside my opinions; but rather, because ten years ago the very essence of marijuana would have many sneaking around to use it. Now, with the legalization of it for recreational use in states such as California, Washington, and Colorado, leaves excellent opportunities for companies to emerge and capitalize on pot in finding new and innovative ways to entice people to purchase from startup cannabis dispensaries.

But how will these companies market a commodity that is still stigmatized among American consumers? According to an article in AdWeek, digital marketing on social media websites like Instagram and Facebook have not yet received a warm across the platforms (Johnson, 2018). In fact, these entities maintain strict content policies to which remove users from their accounts if they abuse the rules (Johnson, 2018). Running print ads to promote cannabis products and dispensaries in the local paper cost nearly as much as airing a commercial during the Super Bowl (Johnson, 2018). It is under these circumstances the most effective marketing is through social currency—primarily through word-of-mouth (Berger, 2013).

Industry leaders are therefore compelled to sell the experience over the product by developing ways to attract and retain recurrent consumers and attract prospective ones. For instance, dispensaries are offering in-store demonstrations to consumers (Johnson, 2018). I thought this was an excellent approach to encourage the novice client to better understand the products and whatever the total use and benefits cannabis offers. For, knowledge is power and if a person is resisting a product or service because of uncertainty, in-store demonstrations are optimal for the dispensary to generate word-of-mouth to the marijuana advocates.

Additionally, cannabis companies are “taking a page” out of the books from tech companies such as Apple; such as their store’s signature look, minimalistic, clean lines, open, and airy (Taylor, 2018).

Chris Burggraeve, a former Coca-Cola and AB InBev executive who became a founder in a cannabis startup, Toast, envisioned this transformation in the future for dispensaries (Taylor, 2018). He believed there is a potential for a multi-billion-dollar growth opportunity in selling cannabis products in a tech-like environment and familiar like Apple’s store. In fact, Burggraeve’s company, Toast, which is an upscale dispensary, was formed upon this ideology.

Other companies have since followed this logic and are proving to be successful in their efforts. However, changing the look of the dispensary to enhance the consumer experience is not the only adoption industry leaders are borrowing. Marijuana dispensaries are transforming their slates by moving away from traditionally run dispensaries from standard point-of-sale (POS) systems to near-field communication.

These are only some of the ways cannabis industry leaders capitalize on a growing market. There are many barriers; such as social attitudes towards its use. It is likely that it will be a while before we begin to see any digital marketing across social media.

References

Berger, J. (2013). Contagious: Why some ideas die and others survive. Random House

Johnson, L. (2018 Mar 15). 4 things to know about marketing cannabis brands. AdWeek. URL retrieved from https://www.adweek.com/digital/4-things-to-know-about-marketing-cannabis-brands/

Taylor, K. (2018). A former Coca-Cola executive-turned cannabis startup founder reveals why crafting the Apple Store of weed is a multi-billion dollar opportunity. Business Insider. URL retrieved from https://www.businessinsider.com/cannabis-companies-mimic-apple-store-marketing-2018-10