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how do you sell to a dispensary

How do you sell to a dispensary

As local and federal governments across the globe move towards legalizing cannabis, more and more entrepreneurs are flocking to this budding market. Although legal marijuana for recreational purposes is still limited to 11 US states, that number is slowly growing with many business owners hoping for federal legalization on the horizon. Limited legalization isn’t stopping profits, however – legal marijuana in the US was reported to have made up to $23 billion in 2017 alone and is projected to reach $77 billion by 2022. Canada has also recently legalized marijuana across the entire country, both medicinally and recreationally, making the country a hot-bed for new online and brick-and-mortar cannabis businesses eager to enter the industry.

Although the cannabis market is still highly restricted, it also comes with an extremely passionate community that is easy to tap into. Weed enthusiasts are constantly seeking out the best legal marijuana to buy and try, making this industry a strong niche with a lot of potential to grow. So, if you’re located in one of the states/countries that has legalized marijuana, now is the time to enter it by building your own online cannabis store. With 3dcart, you’ll have everything you need to start and manage a unique and opportunistic business like one that sells cannabis. Gain access to a robust eCommerce toolset and get started designing a beautiful store, expanding your customer reach, building your brand and becoming a successful online cannabis retailer.

Understanding Cannabis
and Cannabis Products

The world of cannabis can be confusing to a newcomer – especially when learning all of the terminology for the first time. There are many factors involved that effect the growth, selling, use and legality of a cannabis plant. It all ultimately comes down to THC, or tetrahydrocannabinol. The THC compound is a cannabinoid that creates the “high” feeling most often associated with marijuana; the amount of THC in a cannabis plant regulates whether it’s illegal to buy or sell.

While it’s 100% legal to sell CBD products with little to no THC in the US, selling marijuana (medically or recreationally) is still highly regulated and federally illegal. So, it’s important to know the difference between different cannabis plants if you’re interested in selling it online. Let’s go through the main forms of cannabis that you may end up stocking on your online weed store.

What is typically referred to as “hemp” is a form of the cannabis plant that contains 0.3% THC or less. Hemp is usually grown in a way that maximizes size and yield and is widely versatile in its uses; it can be made into textiles, paper, food, building materials, body care and more. Cannabis retailers typically sell CBD products made from hemp, as it is legal across the entire United States and in most countries.

Legal Marijuana

In contrast to hemp, marijuana (commonly referred to as weed) contains more than 0.3% THC. Marijuana is bred to optimize certain characteristics of the specific breed or “strain,” such as higher or lower amounts of THC and overall CBD content. Grown and cultivated in controlled environments to produce the budding flowers from female plants, marijuana can be sold for either medical or recreational purposes (depending on local laws). The legality of marijuana is much more complicated, usually coming down to whether it’s being sold for medicinal purposes or not – even medical marijuana is only legal in 33 US states.

Note: To sell medical marijuana, you’ll need specific licensure that differs from recreational marijuana sales.

Cannabis Indica, Sativa and Hybrid

Cannabis comes in two main forms: cannabis indica and cannabis sativa. Buds from an indica plant are typically sold as medical marijuana to patients looking for a relaxant. On the other hand, buds from a sativa plant are usually sold as recreational because they tend to make the user “high.” When the two are crossbred, it creates a hybrid that may come with the effects of both types depending on which is dominant.

Summary of Cannabis Products & Accessories You Can Sell:

  • Cannabis buds/flowers
  • Dried cannabis
  • Cannabis capsules & soft-gels
  • Cannabis topicals & skin care
  • Cannabis oil & vaporizers
  • Hemp-derived CBD products

While this list doesn’t include every single cannabis product available to sell, they are the most commonly sold. There’s also a wide variety of accessories that can be sold alongside these items, including glass pipes and vapes. By building your cannabis eCommerce website with full-featured software like 3dcart, you can easily bundle your products with accessories and make it easy for customers to make repeat purchases; you may even want to add the option for a subscription plan or recurring order, so customers never run out of their supply.

How to Choose a Cannabis Supplier

Due to the relatively new nature of the legal marijuana market, regulation isn’t as comprehensive as it is in industries like food and makeup in regard to product quality and ingredients. But legality is also much more complicated in this case – more than almost any other industry in eCommerce. That being said, choosing the right cannabis supplier can feel like a balancing act; you need someone who follows the law and grows a quality product for you to sell.

When looking into your options for cannabis suppliers, be sure to do your research. Remember that both medical and recreational marijuana are restricted based on location and chemical content, so don’t let anything slip past you so your business won’t suffer from for legal repercussions. Here’s some tips on how to choose the right cannabis supplier for your online store.

Product Selection

Weed enthusiasts are all about having a wide selection of strains, breeds and product types to choose from when they’re buying cannabis. So, keeping that in mind, it’s best to look for a cannabis supplier or wholesaler that carries a variety of products so that you can cover all your bases in your online store’s inventory. Be sure to stock several forms of legal marijuana (including indica, sativa, and hybrid) so that you have something that can appeal to any customer.

Location

Sale and transport of marijuana is highly regulated across North America. If your business is located in Canada, then you’ll want to exclusively work with Canadian cannabis suppliers. However, if you’re in the US, then you’ll need to make sure that you’re working with a supplier within your state – shipping cannabis through the mail is restricted, so you’ll need to either pick up your products or rely on a delivery service.

Growth & Cultivation

One of the most important factors in the quality and effect of cannabis is how it’s grown and cultivated. You’ll want to make sure that your cannabis supplier shows proof that its products are grown in controlled environments with non-toxic chemicals, so you know exactly what’s gone into the product you’re selling.

Legal Compliance

Since sale and use of cannabis is still highly restricted in many areas, it’s a good idea to ensure that both you and your supplier are abiding by local laws. Not only does your business need to be properly licensed with permits for cannabis sale, but your supplier also needs to be for cannabis growth and distribution. Check for evidence of compliance on your chosen supplier’s website or contact them to confirm that your business dealings stay legal.

Payment Processors for Cannabis Stores

If you’re selling legal marijuana, or any cannabis product, then you’ll need to work with a high-risk payment processor. Any industry that involves more legal requirements than normal or is at higher risk for fraud is classified as a high-risk industry. Not every payment processor is willing to work with a high-risk merchant, so it’s important to work with a processor that’s willing to accept any possible extra risk. 3dcart integrates with many high-risk payment providers that are ready and willing to work with your business to provide your needed payment solutions.

Fort Point Payments is a network of more than 30 domestic and international banks and acquirers that work to provide payment processing for high-risk merchants. Merchants using their payment processor will be able to accept all major credit cards, including Visa, Mastercard, Discover, and more.

eMerchantBroker, or EMB, is a payment facilitator that works mainly with eCommerce merchants within high-risk industries. Working at competitive rates, EMB is a well-known processor that specializes in getting high-risk merchants approved.

NETbilling supports eCommerce and brick-and-mortar stores in credit card & eCheck processing at low rates. They support multiple-currency transactions and offer 24/7 support all year via phone, live chat and email.

Maverick BankCard accepts a wide variety of payments with added fraud prevention, chargeback mitigation, detailed reporting and strong support. Located in Los Angeles, this leading merchant services provider is ready to support your business.

PayKings is a reputable payment processing company that’s well-versed in supporting high-risk merchants with unique needs. They offer low rates, accept all major credit cards, and offer fraud protection services.

High-Quality Cannabis Wholesalers

If you’d rather not grow and cultivate your own cannabis, then there’s several suppliers across North America that offer quality products for you to buy wholesale and stock on your online store. But, you shouldn’t just pick any cannabis supplier – you need one that’s right for your business needs that operates legally with quality products. As weed slowly becomes legal, more wholesalers are popping up that are worth your time.

Looking to start an online marijuana dispensary? Our website builder can help you start your online cannabis business and start selling marijuana products online

How do you sell to a dispensary

Gone are the days when cannabis vendors can bring products into a dispensary for show and tell without professional packaging, lab testing results, accurate dosage information, presentable sales people, or a reliably consistent distribution system.

In the above video, Aaron Justis, President of Los Angeles dispensary Buds & Roses, reflects on his experience with vendors over the years.

Some tips for vendors. First, bring samples. Dispensaries want to try samples. And since the bud tender is your gateway to the customer, you should want them knowledgeable about and willing to recommend (push) your product(s). Good presentable packaging is also a must. Help your product stand out on an increasingly competitive shelf.

Aaron also talks about opportunity in product innovation. There are so many things missing from the dispensary shelves. Brands that can help fill a void on the shelf will find a receptive audience among buyers and decision makers.

Fortunately, when marijuana is involved, there’s not a lack of creativity among those creating new products. Innovative products are coming to market, whether it be novel delivery mechanisms, or products featuring isolated molecules such as THCA or CBD.

Thinking this type of feedback from dispensary’s would be helpful to vendors, and in turn, the dispensaries who are sold to on a daily basis, I reached out to a few dispensaries for their thoughts on a few questions. One responded 🙁

Fortunately, his comments are educational.

If others who work at dispensaries want to chime in, I’ll (try to) add your comments to whichever of the below questions you answer. Help vendors fine tune their sales pitches to make it more meaningful to all.

What makes for a good pitch / presentation from a new vendor looking to get shelf space in your dispensary? What are you looking for?

Liam Comer (Growhouse Dispensary, Nederland, CO): The very first thing I look for is their credentials. We’ve had a handful of people who come in who aren’t badged with the Marijuana enforcement division who want to sell to the dispensary, which would be highly illegal. It happens more than you would think.

From a sales perspective, it is very important to me that the salesperson knows their product. Also, they have to come in knowing all of their numbers. At Growhouse, the mark-up is typically 80-100% up from wholesale. So we immediately want to know the price-point and how it competes with similar products so that we’re not wasting our or the salesperson’s time. There are lots of great single dose edibles in our state that are sold wholesale at $5-$7. But we sell all single doses at $5. So there’s no scenario in which we will buy those.

When reviewing the product I always ask what is this product doing differently. For example, in the brownie market, I’ve only seen one company (Love’s Oven) that has strain specific brownies. The rest either say Indica, Sativa, or Hybrid. For MarQaha tinctures, their tincture is agave based, so it doesn’t have as oily and chemically of a taste as some of the other tinctures. I’m always looking for something positive I can say that distinguishes that product from all of the others that are sold in our store.

How has your evaluation process evolved over the years?

Liam Comer: When we opened, we were getting samples every day because vendors were competing to get on our shelf. Everyone has always gotten samples of everything because we have a very small staff. Usually, a couple days after we were given samples, I would ask who I was working with how it affected them, but we never developed a formal rating system.

Growhouse hasn’t really needed to go that direction in part because of where we are based. Nederland has had a cannabis culture for a very long time, to the extent that locals are not afraid of over-consuming at all. Because it is such a small town we have many repeat customers, so even though we evaluate as budtenders, the customers do a lot of evaluation for us.

For example, Edipure is one of our candy providers. Personally, I had great experience with my sample of their product. But we’ve had a few people come in and say that since the candy is coated in THC rather than infused with THC, the dosing package to package is inconsistent.

What are the current hot product categories?

Liam Comer: By far the hottest category is 1:1 THC to CBD. This comes in the form of candy, capsules, and tinctures. It may be in part because our market is dominated by people above 50 years old, but CBD is very popular despite being more expensive. The 1:1 is always a pleasant high, but also since its not purely CBD (which is far more expensive), having that 50% THC drives the price down and makes it more affordable.

Other than that, cannabinoid specific transdermal patches are a relatively easy sell for CBD and CBN. There aren’t enough products that are CBN or CBD specific to match Nederland’s demand.

What new product categories are emerging – new product types that you’re now carrying that maybe weren’t around 6 – 12 months ago? Or product categories you see coming to market in the next few months that you’re excited to introduce to your patients / customers?

Liam Comer: Although producers haven’t caught up to this yet, there is a demand for non-sweet edibles. Colorado is one of the healthiest states in the country, but edibles are always packed with fat and/or sugar. People have asked for something savory, but we have nothing to carry to meet that demand.

We are about to carry for the first time a THC infused gum, which we anticipate selling well because many people are tourists who have had bad experiences with homemade infused baked goods. I haven’t tried the gum yet, but I think people are going to buy it once it’s in the store.

On the vaporizing market we were recently pitched an oil cartridge that is propylene glycol and coconut oil free. Instead, they said that they were using cannabis terpenes as the binding agent. Customers looking into trying vaporizing for the first time always choose coconut oil over propylene glycol because propylene glycol sounds dangerous. Personally, I haven’t done much research on propylene glycol, but I know that coconut oil based vaporizers have been known to cause a disease called lipid lung or lipid pneumonia.

Can you tell a story about the worst sales pitch you endured?

Liam Comer: The worst pitch I have experienced was for a concentrate that was essentially a reprocessed shatter that had the terpenes extracted from it. When I asked why you would remove the terpenes (and thus the taste) from the concentrate, he said it was for people who liked concentrates but don’t like the taste of cannabis. I really don’t think that market exists, and when I asked him the price point he presented me with a sheet that explained that we had to give them our extra trim in exchange for them to sell us the concentrate. We don’t have any trim because we’re a wholesale buyer. So the salesperson had obviously not looked into our business or just asked us about our grow.

What is the role of the budtender in both the evaluation process (pre-approval) and the sales process (once approved) for new products in your dispensary?

Liam Comer: For the Nederland store, the budtender’s evaluation doesn’t play a big role in whether or not the product gets to the shelf unless they have a seriously bad experience with it. Like I said, budtender’s approval is very important for the product to get off the shelf. A lot of people have no idea what they want when they walk in, and since there isn’t significant marketing of anything on our shelves (because there are laws that restrict depicting infused products in marketing), they are coming in for the experience of trying an infused product rather than seeking a particular brand out. So usually, I suggest a product, and they buy the first one I suggested.

Gone are the days when cannabis vendors can bring products into a dispensary for show and tell without professional packaging, lab testing results, accurate dosage information, presentable sales people, or a reliably consistent distribution system. In the above video, Aaron Justis, President of Los Angeles dispensary Buds & Roses, reflects on…