With 56% of U.S. consumers saying they would try cannabis if it were legal, according to a survey by A.T. Kearney, retailers have plenty of incentive to prepare for the potential legalization of additional marijuana-related products. Two big retail names already have decided to hop on board: luxury retailer Barneys New York and mall operator Simon Property Group.
Barneys New York will open "The High End," making it the first major retailer to launch a luxury cannabis lifestyle and wellness concept shop. The High End shop will open in the retailer's Beverly Hills, Calif. flagship in March, through an exclusive partnership with upscale cannabis products manufacturer Beboe.
The space has a lounge area with wellness and beauty products, jewelry and paraphernalia like glass pipes, vape pens, ashtrays, lighters and rolling papers for sale. Select accessories featured in The High End also will be available on Barneys.com. Customers who visit The High End can speak to Beboe representatives to learn more about its products, and purchase from Beboe through the delivery service Emjay.
The luxury retailer plans to expand The High End to additional locations in the near future but did not specify where the shops would open. Currently, California and Colorado are the only two states that have legalized retail sales of cannabis.
Simon is partnering with Green Growth Brands to open 108 shops within its malls that will sell cannabidiol-infused (CBD) products. The first location will open in March at Castleton Square Mall in Indianapolis, with the others slated to open later in 2019. Under the partnership, GGB will be able to open additional shops under its Seventh Sense Botanical Therapy brand for CBD-infused body care. The increasingly popular CBD compound — unlike the cannabis plant that it derives from — is legal to sell except as part of a food or beverage product.
For Simon, landing GGB as a national tenant will help the landlord fill empty space at its properties. Mall owners have been struggling in recent years to fill storefronts, especially with anchors such as Macy’s and JCPenney closing stores and Sears going bankrupt. Many other mall-based specialty retailers experienced have experienced the same problems — declining sales and foot traffic — that have led to bankruptcy and a scaled-back physical presence.
Peter Horvath, CEO of GGB, told CNBC the company is already in talks with five other major real estate developers, and plans to have 300 locations open (including the 108 with Simon) by the end of 2019.
"The mall developers…are in the business of renting space,” Horvath said. “They need more food and personal care and less clothing. We fit into one of the categories that's growing. That's not an accident."