MJBizMag November-December 2020 - 80
THRIVE
SURVIVE
Being vertically integrated
worked to Shangoʼs advantage
this year. Courtesy Photo
COMPANY: Shango | LOCATION: Portland, Oregon, with operations in AZ and NV | SECTOR: MSO
COVER ME
S
hango has grown steadily since it
was founded in Portland in 2014.
The company has vertically integrated
operations in Oregon and Nevada
as well as a cultivation facility in Arizona.
In Michigan, Shango has opened two
of three expected retail stores and has a
large grow facility under construction.
Looking ahead, the company will soon
have vertically integrated operations in
California and Missouri.
In some of the markets where it
operates, Shango is a consistent top
performer in the flower and pre-roll
categories, according to Seattle cannabis
analytics company Headset. The company
also generates revenue through its own
branded concentrates and edibles.
Shango has reached this point by
leveraging wholesale and retail strategies
as well as customer-retention deals.
Owning a Retail Outlet
Gives Cultivators
Valuable 'Cover' for Moving Product
Beginning in March, the COVID-19
pandemic halted an important part of
Shango's Nevada and Oregon wholesale
operations. Retailers that had been
reliable purchasers of Shango's flower and
other products suddenly stopped placing
new orders. The store owners were worried
about having to move inventory in
Having a retail outlet to sell the house
brand can save the day when customers
stop placing wholesale orders By Omar Sacirbey
the face of potential mandatory closures.
But Shango was able to move product
and avert losses by selling through its own
retail stores in Las Vegas and Portland.
" Having a retail store gives you
some cover that someone who is just a
cultivator or just a manufacturer doesn't
have, " said Brandon Rexroad, Shango's
CEO and founder.
In Nevada, for example, Shango's
75,000-square-foot cultivation facility
produces 500-550 pounds of flower per
month. The Las Vegas store typically
absorbs about 160-180 pounds of that,
while the rest is distributed wholesale.
" When the wholesale market stopped,
I still had 160-plus pounds that I had
to push through my retail store. I didn't
have the option of shutting down my
garden because I don't buy third-party
flower from anybody. Shango should sell
Shango flower, " Rexroad said.
Win Customers
With Sales and
Cash-Back Deals
Before COVID-19-but even more so
since the pandemic started-Rexroad
said he's seen customers looking for sales.
" Everything comes down to pricing, "
he said. " People look for store happy
hours, two-for-one deals, any percentage
off. "
80 Marijuana Business Magazine | November-December 2020
" People are educated enough to look at
Weedmaps or Leafly and see they can pay
$14 per gram here, but two blocks away,
it's $10 per gram, " Rexroad explained.
" You're seeing that happen a lot more.
You're seeing customers that maybe
weren't your customers, (but) because of
the aggressive sales that you're running,
they're becoming your customers. "
Once you've converted new customers,
retaining them also starts with a deal. For
this, Rexroad likes cash back.
" If you come into my store, I don't care
what you spend; you're going to get 5%
cash back, and you're going to see that on
your receipt, " Rexroad said. " It becomes
retention at that point. Now you know
you've got cash on that receipt. If you go
somewhere and somebody highlights the
bottom of the receipt and says, 'Hey, next
time you're here, you get $12.50.' Instead
of going over there, I want to come back
and use my $12.50 and take advantage
of that. "
Those types of tactics help gain brand
loyalty-a concept that is becoming
increasingly important in today's cannabis
industry, where consumers have numerous
choices when it comes to products.
" I'm not going to say that brand
loyalty is 100% there across the board
in this industry yet, but it's gaining that
traction, " Rexroad said.
AND
MJBizMag November-December 2020
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