In August, Cresco Labs Inc. took a step toward “building the most strategic and valuable geographic footprint in the cannabis industry” when New York state regulators approved the company’s purchase of Gloucester Street Capital, the parent company of Valley Agriceuticals, said CEO and co-founder Charlie Bachtell in an Aug. 8 press release.

Cresco Labs, a multistate, vertically integrated cannabis operator based in Chicago, has been focused on expansion since its inception in 2013. “From Day 1, we wanted to have a multistate footprint—that we knew we wanted to be more than just Illinois operators,” said Bachtell during the 2019 Cannabis Conference.

Bachtell and Nello Gonfiantini III, CEO, Diego Pellicer Worldwide, discussed challenges of multistate expansion for dispensary owners and cultivators during a panel discussion at the 2019 Cannabis Conference. Expansion offers brand-building and growth opportunities; but it requires a steadfast focus on regulatory compliance, talent acquisition, training and best practices for consistency of quality and efficiency, the panelists said.

Here, Cannabis Dispensary recaps some of Bachtell’s and Gonfiantini’s expansion and franchising tips and provides a glimpse into what’s to come for the 2020 Cannabis Conference in Las Vegas, April 21-23.

1. Know the regulations. Prior to entering the cannabis space, Bachtell, who also is an attorney, worked in the mortgage banking industry as executive vice president and general counsel of Guaranteed Rate. During that time, he learned that navigating the regulatory landscape is critical to success. “You either embrace regulation, engage in regulation and do regulation better than the guy across the street … or we could go out of business,” he said. Guaranteed Rate thrived amid stringent post-recession regulations because the company excelled at the regulatory process, he said. Similarly, in the cannabis industry, companies looking to enter new legal markets must understand how to operate in states with different laws, Bachtell said.

2. Create a compliance program. Gonfiantini, also a former banking professional, recommended that cannabis businesses adopt compliance programs to ensure they’re staying ahead of quickly changing regulations. For franchisers, compliance programs may be more complicated because they’re dealing with individual operators. They should explain to their operators the importance of being proactive when it comes to regulatory compliance, he said. “We try to influence them and convince them that it’s a lot cheaper now to pay for some compliance than later on when regulators ask you to, for example, pull up the last 100,000 transactions and go through every one of them,” Gonfiantini said.

3. Tap into the existing supply chain. Expansion can be much more seamless and less risky if the state already has a strong network of cannabis businesses in place. One of the keys to Cresco Labs’ expansion into California was its deal to acquire Canadian branding and distribution company Origin House, which operates throughout California, for C$1.1 billion in April. (At press time, the deal was still pending regulatory approval.) “For us, the infrastructure ... [and] the relationships they have, the authentic nature of their operations in that state—where authenticity is No. 1—it was really good for us,” Bachtell said.

4. Establish standard operating procedures (SOPs). Cresco operates in 11 states and owns 22 dispensaries and a total of 56 retail licenses, according to the most recent figures cited on Cresco’s website. Maintaining consistency and quality becomes more challenging when every store is operating independently without standard, company-wide protocols. “It’s ‘Cresco’ in 11 states, and, of course, that’s a very challenging operational structure, especially with the fragmentation with the siloed operations,” Bachtell said. But the establishment of SOPs, business models and brands allows the company to design and build each dispensary the same way, he said.

However, in a franchise model, businesses must be more flexible because each dispensary is an independent operator, Gonfiantini said. He recommended that companies allow for a certain amount of creativity in their SOPs. “We trust that they know their market,” he says. “On the other side of the coin, they go beyond what we would consider the lines of the brand and the way we like to see it. It’s always a balancing act between tightening up the guidelines [and] loosening them up.”

5. Communicate with your partners. In a franchise model, communication is critical, Gonfiantini said. This includes weekly calls and updates to make sure everyone is on the same page and shares the company vision, he said. “It takes constant communication for us to make sure the brand is consistent, the message is the same and we’re always telling the same story and going down the same path together.”

6. Make sure your talent shares your vision. As the industry grows, finding qualified, skilled talent becomes more challenging. Diego Pellicer’s corporate team works with its operators to ensure they’re looking for employees who share the company’s vision, according to Gonfiantini. “Having highly educated budtenders on the floor, having good financial people is always difficult to do when you’re doing it once removed,” he said. “We try to work with our operators to make sure they’re looking for the right people and make sure they have that vision. Again, that’s the vision from the operator to the employees.”

7. Create an interview checklist. Bachtell suggested cannabis companies develop a checklist to help identify qualified job candidates. He typically includes questions that help the company determine whether the interviewee is the right fit culturally, including questions that focus on Cresco’s mission, vision and core values. “I don’t like to talk in absolutes, but it would be very difficult to have a successful company in this space if you didn’t have the right culture throughout the organization and in total alignment in the direction that you’re going,” he said.

8. Train workers on processes and standards. In a highly regulated market, the margin for error is very small, so training on SOPs is critical, Bachtell said. “From a training perspective, the bigger you get, the more sophisticated [you get],” he said. “We just launched our LMS—a learning management system. You can’t leave that to chance. You have to be super solid in your SOPs, in your onboarding and your training.”

Training is particularly critical for store operators, Gonfiantini said. “[We] try to ensure the operator understands the standards that we want to live [up] to,” he said.

9. Educate the consumer. Brick-and-mortar retailers, in general, often struggle to remain competitive in today’s e-commerce world. Dispensaries can learn from strategies retailers in other industries have adopted, Bachtell said, including experiential retail. “It’s not just a store. It’s an experience; it’s an education; it’s an opportunity.” Bachtell pointed to the Apple Store as an example of a retail business that provides both an education and an experience to consumers. “You go there and ask questions,” he said. “You get to experience their products.”

He also cites online grocery shopping as another example of how consumer buying preferences have changed. He suggests cannabis companies explore similar models. “E-commerce, direct to consumer—those should all be part of your dispensary model to help stem the risk of traditional brick and mortar,” he said.

Jonathan Katz is managing editor for Cannabis Business Times and Cannabis Dispensary magazines.

For most of their lives, baby boomers were the largest generation in U.S. history.

Though they’ve been eclipsed by millennials, they still comprise nearly 25% of the nation’s population—and a big segment of a dispensary’s potential customer base.

Born between 1946 and 1964 and weaned on Woodstock and Watergate, boomers turn 55 to 73 years old in 2019. Depending on a person’s perspective, that may sound ancient or young and may influence whether dispensary sales are lost or won.

The following insights shine a light on common misconceptions about boomers and what makes them unique. Understanding this demographic can help dispensaries provide the service and products boomers have come to expect.

1. Boomers aren’t disinterested bystanders.

Jennifer Culpepper, founder and creative director of cannabis branding agency Brand Joint, believes that baby boomers are one of the industry’s most underserved markets. “Sometimes people assume that because someone is older they’re not going to be interested in cannabis,” Culpepper says. “They actually seem to be among the most interested because they’re facing different ailments that cannabis can really help.”

Consumer behavior in fully legal states provides a glimpse into boomer attitudes. Jessica Lukas, vice president of consumer insights for BDS Analytics, a cannabis market intelligence and consumer research company, puts it in perspective: 30% of cannabis consumers in fully legal states are 55 or older.

People in this age group are likely drawn to cannabis because they believe it offers health and wellness benefits, Lukas says. According to BDS research, 90% of boomers who consume cannabis believe it relieves pain, and another 90% strongly believe it has medical benefits. Boomers also have a highly favorable opinion of cannabis if it can help a sick loved one, with 97% supporting its use in such cases.

2. Boomers consume for more than aches and pains.

Belief in cannabis health benefits doesn’t mean that pleasure takes a back seat. While 64% of cannabis-consuming boomers consume for health or medical reasons, 60% also purchase it for recreational and social benefits, Lukas says.

In addition, boomers are less likely than younger consumers to use or prefer inhalables but still use them. “It actually starts in the data to look a little bit like a nostalgic form of consumption,” Lukas explains.

Edibles and topicals are boomer go-tos when it comes to relieving pain, improving sleep or avoiding prescription medications. But they prefer inhalables for recreational and social use, Lukas says. “And boomers, more so than other generations, are willing to tell us they consume inhalables to have fun, be happy and get high or stoned,” she adds.

3. Boomers expect personalized, professional, trustworthy service.

Boomers grew up being catered to, earning them the nickname the "me generation.” They expect sellers to understand. Jennifer McLaughlin, vice president of merchandising for multistate cannabis operator Calyx Peak Companies, speaks from 20 years of retail experience as an apparel executive. “Customer service is everything to the baby boomer. They grew up in brick and mortar,” she explains.

“Hands-on communication and interaction with people working in dispensaries is mission critical. Boomers need to be able to ask questions and get the help that they want,” McLaughlin says. She suggests creating an inviting, inclusive, customized dispensary experience where customers can sit with budtenders one-on-one.

BDS research shows the No. 1 driver for how boomers choose their dispensary is a trustworthy and professional staff. “Those two things trump price and they trump location for this group of consumers,” Lukas says. “They’re willing to drive out of the way to go to a place that offers them that … trusted experience.”

“Sometimes people assume that because someone is older they’re not going to be interested in cannabis. They actually seem to be among the most interested because they’re facing different ailments that cannabis can really help.” Jennifer Culpepper, founder and creative director, Brand Joint

4. Boomers look to the cannabis industry to educate them.

“In trying to market to boomers, education is probably going to be one of your best tools,” Culpepper says. “They’re familiar with cannabis in another generation of it, so many aren’t familiar with all the new ways of consumption and new types of products.”

Barriers, such as getting a medical card, amplify the importance of educating boomers via electronic avenues. “They are responsive to email, and they are on Facebook, too,” Culpepper explains. Education-related social media can be valuable when targeting this group.

For boomers who shop dispensaries, 60% name budtenders as their main information source, according to BDS. Also, 40% rely on cannabis websites, and 25% read cannabis-related publications to obtain information. “Boomers are more likely to get info from these sources than by talking with a doctor or going to health publications or websites,” Lukas shares.

McLaughlin emphasizes the power of engaging with boomers one-on-one, asking if it’s their first visit or how they’re feeling about the experience. This gives them the OK to seek answers and education they need. “When a customer gets confused, they freeze. They don’t buy,” she says. “That’s pretty important as it relates to this generation.”

5. Boomer consumption preferences offer sales opportunities.

Nearly half of boomers prefer inhalables, while 31% prefer edibles and 20% indicate topicals are their preferred consumption methods, according to BDS data. But a substantial amount of cross consumption occurs. For example, among boomers who prefer inhalables, 35% still consume edibles, and 16% use topicals. That presents a big opportunity to upsell.

Not everyone is open to trying different product forms, but numbers suggest vape-loving boomers may go for edibles and topicals, too—if dispensaries elevate service and sales pitches to explain how an edible or topical, for example, might complement a boomer’s vape use.

“Educating consumers on product forms and methods and how they can be used together is a great way to see growth in a single store, among your current shopper base,” Lukas says.

Stay tuned for part two of this series, which will take a closer look at Generation X.

I was at the checkout counter in an independent hardware store a few weeks ago, and right in front of me was a power tool on sale for just under $50. During another outing at a wine shop a few weeks later, I saw three different $30 Syrah wines on the counter with a sign that read “Try something new.”

“Geez,” I thought, “how many retailers just don’t understand the dynamics of a customer standing at their retail counter?”

Once a customer has ticked off the end of his or her shopping list or the poorly trained employee has said, “Anything else?” the customer is outta there. Customers at the register are not there to browse, not there to have to make a choice and not there to do anything other than pay for their merchandise and get on with their lives.

While true that a counter display that is part of your overall visual merchandising strategy can interrupt that routine and get them to buy—boosting your average check and number of items sold—it must be done thoughtfully. Here are seven tips on creating a good point-of-purchase display that can help build brand awareness, drive more incremental sales and boost profitability.

1. Display one product. You want to get the customer focused on one item. Use point-of-sale data to find a best- selling product customers are already familiar with. The lack of choice makes it an easy yes or no decision for the customer.

2. The featured product should be something everyone can use. The universality of it makes it easy for all customers to just throw it on their tab.

3. Keep the price point less than $20—below $10 is even better. Most customers can drop a $10 bill without noticing. And if you can’t feature product in your store due to state regulations, you can still fill an empty wrapper or bag with stuffing so it looks like the product. (Editor’s note: Some examples may include branded rolling papers or lighters, pre-rolls or grinders.)

4. Establish profit margins that cover shrinkage. If the items can be easily pocketed when a cashier is swamped, like rolling papers or lighters, you need margins to cover those thefts.

5. Keep the counter displays fresh, and change them weekly. Timing is everything, so put your seasonal merchandise out early and sell through it before using a regularly stocked item.

6. Keep the signage short and to the point. It should take no more than seven words to grab a customer’s interest. Like all signs, your goal is to paint a picture. “Almonds make a great afternoon snack!” will tempt someone to purchase them much more than a sign that just reads “2 for $5.”

7. It’s not a clearance aisle. If you are trying to move slow-selling items, the counter is not the place. There’s a reason they didn’t sell in the first place. Stick to displaying items that constantly move.

Bob Phibbs launched The Retail Doctor in 1994. He is an internationally recognized business strategist, customer service expert, sales coach, marketing mentor, author of three books and motivational business speaker.

Creating a Las Vegas experience that competes with the Bellagio Water Show’s geyser-like fountains or the flashy light and music show at the Wynn’s Lake of Dreams isn’t easy, especially as a cannabis dispensary working within strict state regulations. But Planet 13 has managed to create a very “Vegas” atmosphere while also being compliant. And compliance, of course, means significant security. David Farris, director of marketing and sales, explains how the company keeps a strong security presence without detracting from the customer experience.

Michelle Simakis: You have a Planet 13 globe and water feature in front of your dispensary, and just beyond the desk where customers check in, there is a digital, interactive koi pond in the floor where the “fish” swim in response to your feet. You clearly want to give customers a good first impression. How do you make sure that it’s fun, but also secure?

David Farris: The vision for Planet 13 has always been to be a large, beautiful marijuana superstore, but … also a destination. [The water feature] is a huge photo moment for visitors. (Eighty-five percent of the customer base is tourists.) But we always wanted a presence of safety and openness, where people can shop and have fun. We redefined what that looked like from a security standpoint.

MS: How did you redefine that?

DF: We allow our security guards to engage and be part of our operation. Whether you are checking in or parking, security officers have coverage in those areas, but they are also greeting you and saying, “Welcome to Planet 13.” We have a director of security who works with our third-party security team.

MS: The people at the reception desk are not security guards though, correct?

DF: That’s a host position, but when we first opened, we had a security guard ... right when you walked in, who said, “Hey, please have your ID out,” and all that stuff. And that wasn’t … what we really wanted. So we created a role for a line host because we do have a high volume of traffic. Their role is to get customers excited to come in.

MS: How much traffic do you get, and do you train staff to look out for anyone who may be intoxicated or causing trouble, being just off the Las Vegas Strip?

DF: We see over 110,000 visitors a month. One of our biggest protocols is not allowing people to sneak anything, whether it’s drinks or other hazardous things, within our facilities. One of our many trainings is to have the ability to scan who is approaching the building. A lot of our customers are coming off of ride share, so they’re just dropping off people constantly. We also have security out front. It’s important for us to be constantly aware of who’s entering the building.

MS: What challenges did regulations pose, and how did you work within those?

DF: Our general counsel and our operations are constantly reading through regulations but also being transparent with our regulators. As we’re creating this vision, we touch base with [regulators] on a frequent basis and are extremely knowledgeable in those regulations because it’s much more difficult to do some of those out-of-box concepts if you don’t know what those limitations are.

MS: Do distractions make people feel safer?

DF: We have all these unique things. ... I think those are a bit distracting, but it’s also [creating] an atmosphere. When you come into an atmosphere, you feel safe, you feel comfortable. You’re not paying attention to security because you’re just shopping like at a normal retail store.

Editor’s note: This interview has been edited for length and clarity.