Colorado is one of the longest-standing states to welcome cannabis, legalizing it for medical use in 2000 and adult use in 2012.
Dispensaries established in the early onset of Colorado's cannabis market were poised to learn how to successfully transition from a medical-only market to a new and unknown adult-use market.
Simply Pure, the first Black-owned cannabis company in Denver, established itself in the Colorado cannabis market in July 2010, when it launched its edibles company.
Adult-use sales later began in Colorado in 2014. At the time, Simply Pure had an established medical cannabis dispensary and had purchased a medical cannabis facility which was later transitioned into a recreational facility, said Wanda James, the founder and CEO of Simply Pure.
But Simply Pure's expansion from the medical to adult-use market was not simple.
James described it as "a process."
Here, James explains Simply Pure's transition and provides insights and tips on how dispensaries can make the changeover to the adult-use market a smooth one.
Train Employees on Regulatory Changes
With the legalization of recreational cannabis comes a new list of regulations. James recommends that dispensaries train their employees to ensure they are well versed in the different rules for recreational and medical cannabis.
For example, the amount of product Colorado dispensaries can sell to medical cannabis patients differs from adult-use customers, so it's essential for employees to understand those transaction limits and how it works, she said.
Simply Pure also had to implement new check-in and verification methods to ensure they aren't selling to anyone underage.
According to the Coloradoan, "Dispensaries that skip identification checks, sell to individuals under 21 or allow them to enter parts of the store where products are visible are subject to fines of $10,000 to $100,000 and possible suspension or revocation of their license. Responsible budtenders risk permanently losing the occupational badges that allow them to work in the industry."
Therefore, Colorado dispensaries will typically verify customer's identification twice, the article states. Simply Pure has two points of verification—checking customers' IDs when they first come in and at the register when they check out, James said.
Prepare for an Increase in Foot Traffic
When Colorado introduced recreational cannabis, several of the already established medical cannabis dispensaries added on adult-use cannabis as soon as they were permitted to do so, James said.
"Colorado's medical marijuana program was quote, unquote, 'robust,'" James said. "We had, I think at our peak, like 225,000 medical marijuana patients, which as a number seems decent, but as a customer base is severely lacking. You can't base an entire industry on 225,000 people, and that's essentially what had happened."
She said that going from having a customer base of roughly 225,000 people to now including anyone in Colorado over the age of 21 created a massive influx of customers.
The legalization also brought in millions of tourists to Colorado at the time, as it was the only state where recreational cannabis was legal aside from Washington, which wasn't as advanced as Colorado in creating an industry, she said.
"I think that's what folks weren't ready for and were not prepared for," she said. "And not just from the standpoint of just running a cannabis facility, meaning having enough employees to be able to deal with how busy you are, [or having enough] registers open to be able to deal with the influx of people coming in, but to also have enough product on the shelf."
Although Simply Pure was aware it needed to increase production, the team was unaware of how much of each product it would need to meet customer demand, James said.
"We didn't realize how many more gummies we were going to need, how many more chocolate bars were going to need, or how much more weed needed to be grown, so it was quite a challenge," she said.
James said spending time getting operations ready is crucial when making the transition from medical to adult use.
"If you've only got one register, know that you're going to need more, or [know] you're going to need a better system to be able to move people through, because the other thing that people need to look at is cannabis connoisseurs are willing to wait, but they're not going to wait three hours to get in, especially when there's another dispensary down the street," she said.
James also recommends dispensaries that aren't vertically integrated but are making the transition to adult-use take the time to build out relationships with cultivators, edibles companies or other brands they want to see in their store.
"The better that relationship, the less likely it is you are going to run out of cannabis," she said.
Elevate the Customer Experience
The increase in customer foot traffic opens the doors to a diverse and widespread customer base. James suggests dispensaries have enough people on their floors to spend time with the new customers, answer their questions and educate them on the products.
"It's not just about checking people out at the counters," she said. "Now that everybody over the age of 21 can use cannabis, what you've got to remember is you're going to get the 65-year-old grandma in there that isn't going to a party this weekend and hasn't smoked a joint since the Bob Marley concert in 1970. So, you're going to want to have enough people to be able to walk her through what a 30% THC joint means."
James said the average customer spends roughly 15-20 minutes speaking to the budtenders at Simply Pure while shopping for products.
"They have lots of questions, and if they don't have lots of questions, we ask them, 'What kind of experience are you looking for now? When's the last time you've had if you've ever had a gummy?'" she said. "[We ask] all of these questions to be able to prepare them for what it is that they're getting ready to experience because it's important for us that they have a great experience.
"So, this isn't going to be a quick sale," she added. "Having enough people on your floor to deal with the influx of questions and comments and really understanding what people are looking for is going to be a key for success."
Overall, James said its vital for dispensaries to not underestimate what their customer base is going to look like.
“While it’s great to have a hip and happening store, remember, too, that somebody that's 65 year sold is going to want to as feel comfortable in the store as a 21-year-old,” she said.