Challenges And Opportunities For Cannabis Retailers

0aaaMeni Morim NamasteTechnologies

With cannabis becoming increasingly accepted all over the world, retailers have a tremendous opportunity to capitalize on a booming industry. But even though cannabis is having its moment in the sun, there are still significant challenges facing retailers. As a globally operating e-Commerce provider in the cannabis industry, we will explore the challenges and opportunities that cannabis retailers face — both in our home country of Canada and abroad.

Challenge: Regulations And The Black Market

One of the biggest challenges in cannabis retailing is the regulatory framework, including regulations that restrict the ability of licensed retail holders to sell online. In Canada, there are only two provinces where a licensed retail holder is allowed to practice e-Commerce. Regulations in Canada also severely curtail marketing by banning distinctive packaging and celebrity endorsements, which makes it more difficult for cannabis companies to build their brands and gain consumers’ attention.

While legal cannabis is heavily regulated, the black market is not held up to the same level of scrutiny. Even in countries like Canada where cannabis is fully legal, there are still black market dispensaries that are fully operational. At the end of the day, that hurts customers and patients because there is no oversight over these products. The lack of enforcement against black market dispensaries gives them the freedom to sell unsafe products while taking business away from legal cannabis.


Opportunity And Challenge: New Markets

In Canada, edibles and topicals will become legal for consumers on October 17, 2019. Right now, only the black market has these products available for consumers. So once this gate is lifted, it will open up a huge untapped market for the legal cannabis industry. Canada’s market for edibles and topicals is expected to be worth $2.7 billion a year. So for retailers, this is an opportunity to enter an exploding market worth billions.

However, regulations limiting product potency will become an issue. Regulations will limit the dosage of cannabis that edibles contain, making them less potent than their black market counterparts. So consumers may have to purchase 10 legal edibles to achieve the same effects that they would have achieved with one black market edible. That disparity could drive consumers back to the black market.

Challenge: Environmental Impact

Environmental impact is another problem that could affect retailers. Say you’re selling a set of 10 cannabis-infused gummies. Under the new regulations, you’d need to pack each individual gummy that contains a certain amount of cannabis in its own package. The packaging also has to contain safety measures, like being childproof. These packaging requirements will generate more waste, affecting the environment.

Opportunity: Growing Legalization

We’re now seeing an acceleration of the legalization movement across the world — thanks in no small part to Canada. Our home country has shown the world that cannabis can be legal on both a medical and adult-use level, with positive effects on both the economy and quality of life. Countries around the world, including the U.S., the UK, Mexico and South Africa are all seriously looking into full legalization.

As legalization expands throughout the globe, so does the opportunity to launch new marketplaces in new areas of the world. Savvy retailers will know that the ability to launch a new marketplace is more than having the right amount of capital. It’s about finding the suppliers that have the right permits to break into these new markets and then connecting them with local buyers.

Opportunity: Customer Service

One way that legal cannabis companies are edging out the black market is through superior customer service. There are hundreds of cannabis strains available, making it difficult for consumers to know how different strains will affect them. Customers who purchase through the black market are stuck with what their dealers provide them, while legal cannabis companies are employing cutting-edge technology to help consumers make smarter and safer decisions.

For example, cannabis retailers are employing artificial intelligence through apps like Uppy, where medical cannabis consumers can journal the effects of different cannabis strains on their body. Based on consumer data, AI technology is able to provide patients with personalized recommendations about which cannabis strains will work best for them. By helping patients find the right strain for their individual needs, this AI technology helps them achieve their desired results faster and more cost-efficiently.  


While the problems facing the cannabis industry are numerous, retailers that are properly prepared for these challenges will be able to overcome them. As our home country of Canada demonstrates, not only can a thriving cannabis industry exist, it can also tremendously benefit a country’s economy and quality of life. And, by making the right moves, you can play a key role in that success — while partaking in it as well.

Meni Morim is the CEO of Namaste Technologies, the world’s leading online platform for cannabis products, accessories and responsible education.

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