In the last three decades, nothing has undergone a legal and social makeover on a national scale quite like cannabis.
California was the first state to legalize medical cannabis in 1996, and a trickle of legal medical markets followed. At the time, Drug Abuse Resistance Education, or the DARE program, was commonly espoused in schools and remained commonplace until federal funding was taken away after 2003. Meanwhile, tens of thousands of Americans were arrested and some imprisoned for low-level cannabis offenses.
Sixteen years later in 2012, Colorado and Washington became the first states to legalize cannabis for adult use; and in the last 10 years 17 other states have joined them.
Alongside the evolution of the cannabis industry—out of the dark and into well-lit—has been an explosive growth in technology, ubiquitous across industries and in daily life.
The cannabis industry is no different: technology is propelling it forward in the grow house and in the marketplace.
Chris Beals, CEO of Weedmaps, the largest centralized online marketplace for cannabis, told NJBIZ what he sees as his company’s place in the cannabis ecosystem. “The easiest way to think about it is [that we’re] the Amazon for cannabis, but we don’t touch the products. We help the retailers showcase what they have and enable the consumers to place transactions online,” Beals shared.
Weedmaps also offers a full business suite, including customer relationship management software and an e-commerce embed to power a company’s online store. “What we view as our sweet spot is everything that helps cannabis businesses generate demand, meet that demand, and make customers come back and buy it again,” Beals said.
When shopping for weed, customers are asking three questions: What are the percentages of cannabinoids in a product; what is the clinical effect of the product; and what’s the right price?
“It’s almost impossible to do that in a sortable, easily engageable fashion in physical stores or by looking on Google,” Beals said. But you can do it on Weedmaps just by put-ting in your zip code.
With websites like Weedmaps and smaller outlets like PotGuide, consumers can be directed to dispensaries based on exactly the products they’re looking for, rather than based on what’s on their drive to and from work. Businesses can attract consumers with deals, special offers, and “drops” of specialty products. The accessibility brought on by such technology has brought more people from the legacy market into the legal market, Beals said. Weedmaps has 16 million monthly active users, 94% of whom report con-suming monthly.
The legacy market continues to draw customers, however, in non-mature markets where a large portion of people live more than 15 minutes away from their nearest can-nabis retailer.
“By landmass, probably 95% of the New Jersey population lives outside of that 15-minute catchment zone. Outside of that, you can only hope for 30% to 40% [of customers to come over] from the illicit market,” Beals said.
Cannabis delivery outfits like California-based Eaze, or like East Orange-based Roll Up Life LLC which is seeking a delivery license in New Jersey, aim to serve customers who live outside of that 15-minute zone or otherwise just want their cannabis delivered like their pizza or Chinese food.
Roll Up Life co-founders Precious Osagie-Erese and Tiyahnn Bryant built their company to be, at its core, a technology company. “We realized all delivery is powered by one form of tech or another,” Osagie-Erese said.
“We developed our Roll Up Life app that mirrors that of an UberEATS or DoorDash app where consumers select cannabis products from dispensaries in their area and our drivers deliver it right to their doorsteps,” Osagie-Erese said. “For our dispensary partners, we created an easy-to-use Roll Up Life dispensary app that connects with our system to ensure all orders can be prepared properly and tracked from our side and theirs.”
New Jersey, like other legal cannabis markets, requires a seed-to-sale tracking system to prevent spillover from the regulated market into the unregulated market. Last month the state tapped Metrc, a track-and-trace system that serves cannabis companies and regulators across 19 states using advanced software, radio-frequency identification technology, and a secure database. Metrc’s technology allows state regulators to track exactly when product is loaded into a vehicle for delivery to a consumer or delivery to a retailer—something that would be nearly impossible otherwise.
Not only is technology helping educate consumers on what’s available and getting product directly into their hands, it’s also educating the businesses themselves on what products they should be focusing on by tracking market trends.
“You have to keep in mind there are several billion dollars that happen in the marketplace, and a lot of businesses don’t understand what types of business is being done,” Beals said. “Who are my top 10 competitors in this region? Who has the most search traffic in this region? What are people vibing, what are people buying, what are we seeing in pricing?
“When you have these limited medical products, this matters less. As you move to a recreational market, that’s critical. Certain product types will drive customers to come to the store. High value, high quality products will come in and out of your store in one day,” he said.
Cy Scott, founder of Seattle-based software-as-a-service platform Headset, has been focused on sharing business insights with cannabis companies since he launched Head-set in 2015.
Focused on retail measurement data, Headset “works with dispensaries to make their data work for them,” Scott said. “We give them insights into their business so they can make informed decisions.”
For example, data from Headset can tell businesses: The two product types with the highest year-over-year increases in sales are beverages (45%) and pre-rolled joints (39%). Flower sales only increased 12%, but it remains the most powerful force in the market at $549 million in 2021 sales. Vape pens are the second largest force in the market, bringing in $259 million.
The only product category that fell in U.S. retail sales year over year was tincture/sublingual, and even that brought in $159 million nationally.
Translating actionable data to businesses in the New Jersey market has already started.
“Headset sources data from close to 3,000 locations across the U.S. and Canada in both medical and adult-use markets,” Scott said on April 20. “With New Jersey opening [on April 21], we’ll begin getting data right away through our retail cooperators who are opening locations. Then we aggregate, normalize and clean up the data to be able to publish similar insights on the New Jersey market.”n