Nurturing new growth: Legalized cannabis edibles bring new opportunities for retailersNovember 8, 2019
On the heels of the Government of Canada’s decision to allow the sale and consumption of edibles containing cannabis and cannabis concentrates, which became legal on October 17, 2019, Deloitte released a study titled ‘Nurturing new growth: Canada gets ready for cannabis 2.0’. The study explores consumer sentiment and identifies areas of opportunities for cannabis retailers around the sale of cannabis edibles and other alternative products. According to the report, these products are expected to create a consumer market for these products worth a jaw-dropping C$2.7 billion a year.
Speaking about the report and its findings, Jennifer Lee, Managing Partner, Growth Platforms at Deloitte says that retailers in the business of selling cannabis products are in for some challenges.
“There are tumultuous times coming,” she says. “Capital is becoming tighter to find in the marketplace. The market’s going to become much more competitive. As a result, the need to be insights-driven is going to be paramount in a world where you cannot effectively market to a consumer. It’s going to present a whole new challenge to retailers, but significant opportunities will arise. The big question is – what do retailers need to think about as they’re getting ready and launching in this new legalized market for edibles?”
It’s the big question, indeed, and one that Lee will provides insights on for attendees at the Retail Council of Canada’s Retail Cannabis 2019 event in Toronto on November 19.
She cites a number of challenges related to the sale of edibles and other alternative products, not least among them the need to build awareness about the product without the ability to market to potential consumers, and an unpredictable market awash with uncertainty.
However, where there are challenges in retail there are also always opportunities. Lee points to three areas where cannabis retailers can win in the market:
- Leveraging analytics to help drive traffic – “Combining internal and external datasets is going to be very important. The market will all be about retail analytics. Retailers who can properly and effectively combine these datasets, while developing detailed consumer profiles will better understand the different consumer segments within their trade areas, what their preferences are and their usage occasions. These retailers will distance themselves from the rest of the pack.”
- Education will be key – “The in-store experience has to be highly curated. Your in-store staff have to be extremely knowledgeable and able to identify the profile/persona of the customer that has come into the store, almost immediately, to better serve them and be able to offer the best product for the particular usage occasion. Experience in-store is going to matter, especially for new customers coming into the marketplace who are that much more lucrative given the fact that there’s an opportunity to educate them about your product.”
- Social responsibility – “Ensuring that as the retailer you always have a safe product in your store and staff that can educate customers about it and its safe consumption. This combination will build trust with your customers, allowing you to become a dependable advisor.”