MJBizMagazine September 2021 - 48

Retail Revoution
DISPENSARY
A
handful of cannabis brands
have begun selling products
directly to customers through
their websites, effectively bypassing
the traditional brick-and-mortar retail
shops and delivery companies that
have become gatekeepers for legal
marijuana.
The direct-to-consumer approach
is being employed by some of the
biggest marijuana brands in California,
including CannaCraft, Cann Social
Tonic, Kiva Confections, Old Pal
and Roach.
While the trend appears to be taking
place primarily in California-the
largest U.S. marijuana market and the
one with the most established delivery
infrastructure-insiders expect the
practice to spread quickly to other states
that allow home delivery.
" The (COVID-19) pandemic made
(cannabis delivery) practically a
necessity. As people use Amazon more
and more ... direct-to-consumer made
a lot more sense, " said Kenny Morrison,
president of the California Cannabis
Manufacturers Association and CEO
of marijuana manufacturing company
VCC Brands.
" When the pandemic hit, it was like,
'We'd better step on it.' "
Different Options
Brands have several options to set up
direct-to-consumer infrastructure,
including obtaining delivery licenses
or partnering with existing marijuana
delivery businesses. But Morrison
48 MJBizMagazine | September 2021
said the key selling point for brands is
twofold:
* It allows consumers to shop the
brand's entire line of products-not
just what retailers or independent
delivery businesses choose to carry.
* Brands can collect and retain
customer data, providing valuable
business intelligence for product
development.
" There are different ways of achieving
direct-to-consumer (sales) that are
compliant, " Morrison said.
Oakland, California-based edibles
brand Kiva, for example, is reportedly
contracting with licensed delivery
company Grass Door to fulfill customer
orders placed through Kiva's website.
Others, including Venice, Californiabased
cannabis brand Old Pal, have
partnered with delivery businesses
such as Amuse to create brand-specific
websites for " super fans, " as Old Pal
CEO Rusty Wilenkin referred to the
companyʼs loyal customers.
" A store might not carry all of your
SKUs, whereas your online experience
carries all of your SKUs, " Morrison
Roie
Edery
By John Schroyer
DEPARTURE
Cannabis brands using delivery to bypass retailers, sell directly to consumers
said. " People who are big devotees may
go: 'I had no idea they had all these
flavors. I've got to try them all.' "
Reaching super fans has been a
primary driver for Old Pal, which
specializes in white-label flower, pre-rolls
and vape cartridges.
Wilenkin said Old Pal's online
ordering function went live in late June,
and he believes it will increase sales by
giving consumers more options that are
brand-specific.
'Everyone Is Doing It'
One person navigating the direct-toconsumer
trend is Roie Edery, cofounder
of California marijuana delivery
giant Eaze.
Edery launched Ginger, a direct-toconsumer
platform and delivery service
for marijuana brands, in June. One of the
company's selling points is that brands will
be the sole owners of all consumer data
obtained through online transactions.
" I've pitched close to 30-40 brands in
the past month, and nobody has said,
'Yeah, no, not interested.' Everyone is like,
'Hey, great timing, we just started thinking
about this,' " he told MJBizDaily. " It's truly
an open field right now. Out of the top
100 brands in California, only about 5%
are doing (direct-to-consumer sales), and
the other 95% are thinking hard about it. "
John Schroyer is a senior
reporter at MJBizDaily.
You can reach him at
john.schroyer@mjbizdaily.com.
MJBizMagazine September 2021

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