The legal cannabis market was valued at $12.81 billion worldwide in 2020, and thanks to a 27.25% compound annual growth rate, the budding industry (no pun intended) is expected to reach $54.41 billion globally by 2026.
To capitalize on this expected growth, cannabis retailers are focused on building trust and, most of all, standing out. For approximately two decades, Cookies and Dr. Greenthumb’s have become two of California’s most prolific and trusted cannabis brands, with deep roots in the music, arts and entertainment industries. Now the retailers, with 25 and six brick-and-mortar locations respectively, are bringing their brands to the next level through highly immersive store experiences and a concentrated focused on store growth.
“Our number of stores will dramatically increase over the next few years as we roll out these brands nationwide,” said Jon-Luca Del Fante, VP of Store Design and Construction for Cookies Real Estate in an interview with Retail TouchPoints. While online platforms and communities like Instagram are the “cornerstone” of the brands’ digital footprints, Del Fante explained that each physical location presents a unique opportunity to “express our brand in a way for us to retain customers. Our marketing and social media presence will drive new customers to our store, but the experience in the physical store brings them back.”
Seeking Brick-and-Mortar Expertise in a Complex Industry
But developing a brick-and-mortar expansion strategy, including finding viable leasing options, can be challenging in a fast-changing, highly regulated space. “Our biggest challenge with scaling is often the time required to obtain a license,” said Del Fante. Plus, regulatory requirements require these stores to be located in industrial areas, away from traditional retail locations. “Knowing that our locations are destination-based, we cannot always rely on foot traffic or co-tenancies to drive people to our stores,” Del Fante added.
Cookies and Dr. Greenthumb’s needed partners that understood how to navigate and successfully launch new stores despite these complexities. Enter Temeka Group, a provider of design, fabrication and installation services that has deep retail expertise — and is venturing further into the cannabis space. “They manage the process from site identification to store opening in about half the time and half the cost we had been experiencing,” Del Fante explained. As part of the partnership with Temeka Group, Del Fante and his team were introduced to CS Hudson, which provides “deep domain retail expertise and nationwide footprint to help scale and support our rapid expansion.”
Together, Temeka and CS Hudson provide end-to-end support as Cookies and Dr. Greenthumb’s strive to reach their growth goals and immerse consumers in their brand stories. Behind the scenes, Temeka Group assists with plans and renderings that are submitted for licenses. Once site visits and assessments are made, a store plan is prepared and submitted for approval. Temeka then collaborates with Quorum Architects to produce plans for city approvals and construction bids made by CS Hudson.
A “quick convert strategy” has been key to bringing new store concepts to life in different markets. While pop-ups are extremely valuable for traditional retailers that want to test new markets quickly, regulations and compliance make it extremely difficult for cannabis brands to even think about opening their own spaces, according to Joseph Scaretta, Founder and Co-CEO of CS Hudson. But with quick converts, brands can buy out smaller, struggling dispensaries that are already fully compliant and operating, and do two-week conversions to reopen these stores.
Cutting-Edge In-Store Tech on Display at #RICE22
All parties are coming together at the Retail Innovation Conference & Expo to show how Cookies and Dr. Greenthumb’s are putting immersive, tech-driven experiences into action. Through an interactive activation, attendees can venture through the shopping experience and see how the brands combine high-touch service and immersive technology to better serve consumers. And, if folks want to dig deeper into the store strategy and vision for these brands, they can sit in on a fireside chat featuring Daniel Firtel, President of TRP Co. and one of the founding members of Cookies Retail and Dr. Greenthumb’s Holdings.
“We wanted to bring the cannabis story to traditional retailers in an impactful way where they can experience a booth that has elements from a dispensary for many people who may have never been to one,” said Paul Nieboer, Principal at Temeka Group in an interview with Retail TouchPoints. “Everything from the millwork to the fixtures and technology drive a brand story. Plus, the interactive RFID stations are a ‘must-see.’ As you pick up a package, the screen activates and educates you about that strain and allows you to add it to your digital shopping cart. This technology is useful in cities and states that don’t allow customers to see the product.”
As cannabis brands like Cookies and Dr. Greenthumb’s try to up their “retail cred,” they are focusing on omnichannel storytelling and high-touch service. Nieboer believes that cannabis brands do an especially great job at creating these seamless stories across channels, “engaging customers’ senses through their marketing and physical spaces.” He added: “On social media customers get to see product, marketing and lifestyle influence, which draw customers to their physical stores. Inside the physical store, the customer gets to experience the brand through marketing, music, design, and then gets to smell the flower and see the quality of product.”
Building Brand ‘Cred’ with Store Tech and Storytelling
For Cookies and Dr. Greenthumb’s, brand recognition and reputation have been key advantages and growth drivers, which is why their brands are central to all store concepts and designs. “Telling the story behind the brand and products is a massive advantage for us, which is why we showcase products in purpose-built displays that allow the consumer to see physical products (which are often pre-packaged) instead of only using existing displays,” Del Fante explained.
Store associates, known by Cookies and Dr. Greenthumb’s as “budtenders,” bring the brand story and product promise to the next level. To create a genuine relationship between the brands and their customers, the companies have employed customer service strategies similar to the Apple store and other upscale brands, Del Fante explained. “Our budtenders meet and walk with customers, populating their order on a tablet before heading to the cash desk for checkout.”
Technology is thoughtfully embedded into the entire customer experience to serve both consumers and budtenders. For example, the retailers make educational information about strains readily available so that clients can fully understand different use cases and find the products that are right for them. One-to-one tablet-powered service is made extra relevant thanks to deep customer profiles that budtenders access and update via the point-of-sale system.
Using Analytics and Customer Data to Localize and Personalize Cannabis Retailing
Finally, sales analytics and customer data provide vital feedback to help Cookies and Dr. Greenthumb’s prioritize the right brands and products. “Customers trust us to curate the best, most exciting products in the market,” Del Fante said. “By optimizing the locations of the products, it allows us to further increase the efficiencies of our existing stores, while also highlighting the products that have been shown to be top performing in a market. As we expand nationwide and in new markets, this is only going to become more important.”
But in-store technology only serves one part of a much larger, contextual brand journey that taps into music, entertainment and more. That’s why Cookies and Dr. Greenthumb’s are exploring new and innovative ways to illustrate their connection to culture. Of note, Cookies’ two-story Las Vegas flagship is being designed to emphasize experiential elements like a vortex entry, hologram booth, craps table and rap station.
As the regulatory landscape continues to evolve, Scaretta envisions a future where brands can easily “pop up” at the events and moments that truly matter to consumers. “It would be exciting if brands could secure temporary permitting and create pop-up experiences at music festivals, massive sporting events and even, eventually, local malls,” he said. “We are working with a brand in California that wants to sell cannabis at music and sporting events. Working through the concept is the easy part, but working through all the licensing and regulations has been the more difficult hurdle.”