The WeedMaps parent company, WM Technology, Inc., announced this week that they have acquired Sprout, a cloud-based CRM and marketing platform in the cannabis industry. Sprout’s CRM software is used by dispensaries, distributors and cultivators in 28 different states and offers a variety of marketing services like text marketing, email marketing, coupons, surveys and more.
The Sprout Messenger software was launched back in April of this year and at the time was touted as a gamechanger in marketing technology, allowing companies to interact with their customers via email, text and their in-house chat in two-way chats.
WM Technology, Inc. was originally founded in 2008. Based in Irvine, California, the company’s business-to-consumer platform, WeedMaps, is known as a go-to resource for consumers seeking cannabis retailers. The app and website now offer online ordering, brand listings, product information and consumer education.
On the business-to-business side, WM Technology, Inc. has grown to include WM Business, a cloud-based SaaS solutions platform with offerings like point of sale, logistics, wholesale and ordering solutions software.
The acquisition of Sprout will help the WM Technology team grow their WM Business portfolio to offer more software solutions, according to Chris Beals, CEO and chairman of WM Technology, Inc. “Our strategy focuses on establishing WM Business as the software solution of choice for cannabis businesses,” says Beals. “With the addition of Sprout, we are one step closer to realizing this vision of providing an all-in-one seamless and integrated solution to run, manage, and grow one’s cannabis business. This acquisition will allow our clients to better target, reach, acquire and retain customers at scale.”
WM Technology, Inc. did not disclose the financial details of the acquisition yet.
Before jumping into what cannabis businesses can do amid this pandemic, it is crucial to explore the specifics behind how the virus impacted the industry as a whole. From a surface level, it seems obvious what happened: dispensaries had to implement social distancing protocols, require both customers and employees to wear masks and limited the number of customers that can be present on the point-of-sale floor room. But COVID-19 did not merely make shopping experiences a tab bit inconvenient.
Cannabis producers, and especially those involved in manufacturing cannabis goods, experienced an apparent disruption in their production schedules. If the metals and plastics were sourced from Wuhan, Shenzhen or any other dense industrial area in China, supplies suddenly stopped coming, and producers were left with limited production options. Businesses did not consider the value of having various vendors and instead put all their stock in one source. A disruption in production inherently impacts dispensaries.
COVID-19 impacted more than just supply chains, however. For instance, investors are now less likely than before the pandemic to invest in early-stage cannabis companies. Competition for capital now far outweighs the supply for cannabis companies, and we have seen (and will continue to see) a drop in company valuations. Indeed, COVID-19 is affecting more than just currently existing operators but those yet struggling to create cannabis businesses of their own.
Vendors & Supplies
A broad survey conducted by the Institute for Supply Management (ISM) between February 22, 2020 and March 5, 2020 found that 75% of U.S. companies had experienced supply chain disruption as a result of the COVID-19 outbreak. An estimated 90-95% of all components utilized in cannabis vaporizer pens were sourced from manufacturers in Shenzhen, China. In contrast, very few companies used domestic manufacturers. While this is just one example, it is equally important to note that cannabis-specific equipment and supply shortages were not the only factors that disrupted cannabis businesses. Shortages of personal protective equipment (PPE) presented challenges for cannabis dispensaries, producers and manufacturers that continued to operate during the “shelter in place” orders.
Operators must establish a resilient supply chain. Do not simply limit your options to one specific region, as this can be a costly mistake. Operators must cultivate an in-depth understanding of their supply chain beyond critical suppliers and their stress points; they need to develop and follow a systematic supply process that takes potential disruptions and stress points into account. When vetting potential vendors, always ask detailed questions that elicit evidence-backed responses. Ask vendors where they source their materials from, whether they have any history of experiencing disruptions in their supply chain and what kind of setbacks they have suffered as a result of COVID-19.
Investing in Your Core Business
In light of COVID-19, operators must invest in solutions that increase efficiency and improve the customer’s experience. This entails ensuring your customer safely enters and leaves your dispensary with a product they are satisfied with—the essence of any retail operation. Your operation should focus on enhancing customer flow as opposed to encouraging aimless roaming. Having an open-space, Apple store style dispensaries might have been a popular option before, but times have changed, and dispensaries must adapt.
Guided purchases offer not just more efficient transactions, but also serve to ensure that your waiting room isn’t backed up with an endless stream of unmanageable customers. Depending on your locally-mandated COVID-19 protocols, your dispensary will likely not be permitted to hold a high number of customers in the store, nor should it during this pandemic. Each customer service representative must be active as opposed to passive, directly asking customers what they are interested in, offering product or strain choices when customers seem unsure and answering questions as thoroughly as possible to avoid confusion and inherently delays. Be sure to emphasize the value of guided purchases to your employees and how they can promote the safety of both themselves and their customers.
Maintaining Urgency
The uncertainty of COVID-19 and its impact on the general economy has left many individuals “clocked out.” Simply put, many people feel that they should wait until things go back to normal before making any critical decisions. As essential businesses, cannabis operators cannot afford to make this same mistake. Now is not the time to sit back, reflect and wait for the vaccine. Instead, operators must work to precisely assess how COVID-19 impacted their business and execute a clear plan of action to address foreseeable problems.
Execution is far more important than perfection; you’ll need to make changes on a dime and avoid spending excessive hours obsessing over debating specific actions rather than taking them. It is far more essential to get tasks done versus ensuring they are perfect. If something is not working in your business, it must be readdressed or removed entirely from the protocol. It is far better to make necessary changes now amid the pandemic as opposed to reactively waiting and seeing what may come next following it.
Stay nimble by cutting out any factors that may be slowing down your company’s efficiency. Is your point-of-sale system causing issues? Can you use a better payment processing tool? Are any employees underperforming? Are there any internal policies that may be hindering your employees’ ability to work as optimally as possible? These are some of the many factors that must be considered to ensure your business stays agile and adaptable. Determine what is working against you and execute a plan of action to address. Do not wait and do not take shortcuts around regulations.
Understanding the Shift in Purchasing Behavior
Regardless of whether or not a vaccine for COVID-19 is completed anytime soon, operators must know that there is no “returning to normal.” People’s habits and behaviors have changed due to this virus, whereas slow browsing of items might have been preferable for some individuals before COVID-19; this is likely not the case today. Furthermore, research groups like Accenture have found that most customers expect their shopping habits to change permanently.
Source: Accenture COVID-19 Consumer Research, conducted April 2–6. Proportion of consumers that agree or significantly agree.
In the study mentioned above, shopping more consciously is one of the two top priorities for customers during this pandemic. According to Accenture, “[c]onsumers are more mindful of what they’re buying. They are striving to limit food waste, shop more cost consciously and buy more sustainable options. Brands will need to make this a key part of their offer (e.g., by exploring new business models).” Furthermore, customers are now more likely to shop locally; this is why community engagement would be especially important to ensure you develop transparency and trust between your brand and your customers. Understanding this shift in purchasing behavior will remain one of the more crucial tasks of any cannabis operator.
Expanding Sales Avenues
More and more customers are now relying on online and curbside purchases than ever before. Dispensaries must look to their current sales avenues and determine where key focuses should be made. Use your sales data to determine where customers are making their purchases the most, be it through third-party delivery services such as Eaze, standard home delivery, online ordering or curbside pickup. Focus on identifying friction and streamlining the user experience on all customer-facing platforms and services. Equally, consider which platform your customers are using the most to make purchases; are they making more online purchases, or do most still prefer direct shopping at the store? Remember that having more products doesn’t necessarily mean more revenue. You must also identify which products are performing well and which have low margins.
These considerations can help strengthen your highest performing platform while working to fix any more inferior performing platforms. As stated before, stay nimble; if something is not working out, cut it out from your business model, and move forward. Do not be afraid to cut poor-performing platforms to hone your focus on the successful ones. Since post-COVID-19 shopping behavior is likely to stay permanent, these changes may still be applicable following a slowdown or cessation of the virus.
Delighting Your Customers
Virus or not, customer satisfaction remains one of the most crucially defining points for the future of your business. Your customers must be safe and must be happy with their purchase. To ensure this outcome, you need to maintain adequate safety policies while equally promoting streamlined purchases. Although a limited number of individuals may be annoyed with over-the-top safety precautions, most customers will enjoy the heightened security that comes alongside these types of measures.
Contactless service, such as having customers scan their identification upon entry or encouraging more credit card versus cash transactions, can increase customer satisfaction, as they will feel a stronger sense of security when shopping at your dispensary. Focus on streamlining curbside pickup. Things such as requiring vehicle descriptions (e.g., license plate numbers, color, make) for curbside pickup purchases can go a long way in helping employees quickly identify customers.
Equally, be sure there is hand sanitizer available near the entrance of your dispensary. This adds a further sense of security for your shoppers. Delivery should be consistent; delays and setbacks must be minimal to win the confidence of your customers. Take the extra steps to ensure your dispensary is clean and products hygienic. All these factors work to increase customer satisfaction while maintaining their safety, and more importantly, impact the level of trust your customers have in association with your brand.
Scaling Operations Taking Advantage of Limited Competition in Emerging Markets
As stated before, several individuals—including existing and emerging cannabis businesses—are clocked out following COVID-19. This mindset is not only detrimental for operations but can also impact how you scale your business. New markets are coming online and will continue to do so as regulators are increasingly incentivized to replenish government coffers. Riverside County in California, for instance, is now allowing for capless licenses for all cannabis business types. However, what remains the key focus for regulators is expanding the number of delivery and distribution operators. In Massachusetts, delivery endorsements for dispensaries are available without a set deadline to social equity applicants and do not have a defined cap. In Illinois, the cap for transporters was equally removed, and each applicant who scores above 75% will receive a license.
These types of licenses are now more valuable than ever before for two reasons. The first reason is that regulators are keener to award delivery and transporter licenses than other types. Secondly, customers now prefer home delivery over shopping in stores due to COVID-19. With more people clocked out during these times, you have far more opportunities and far fewer competitors during application processes. Use this time to truly develop a strategy for expansion, as the chance might not come so quickly again.
Conclusion
As a final point, be sure to expand your online presence during this time. Although you may not have the capacity to reflect your company’s personality and value through quick in-store transactions, you can use social media to encourage product reviews, social interactions, and recommendations. Invest in marketing through social media platforms. Platforms such as TikTok have helped form communities of like-minded individuals. Use platforms such as that to highlight your company’s personality and values, avoid being “salesy” and focus more on being funny, entertaining and just alive. Character adds value to your business.
People want to laugh, to feel safe and they want to live. Create social interactions and immersion and always prioritize being honest and transparent with your customers. This final point stands as equally as important as the rest of the considerations highlighted throughout this article. Stay nimble, stay active and stay alert! Do not view the chaos behind this pandemic as a pit, and instead see it as a ladder. Track down opportunities, do not be afraid of change, and, more importantly, do not wait for an answer to COVID-19, be the answer.
Whether you’re a small business owner or a production manager of a large manufacturer, if you’ve ever experienced problems with your product labels you know it can quickly turn into a serious issue until that problem is resolved. From the time it’s applied to your product all the way to the POS (Point of Sale), labels always seem to be the least significant part of the production process- until something goes wrong. And when it does go wrong, it can create major branding issues and cost your company tens of thousands of dollars due to hefty supply chain late penalties and/or even government fines.
This article aims to provide insight as to how a company like Label Solutions Inc. helps businesses and manufacturers create new labels for their products as well as what to look for should you experience label failure at your retail locations. Topics discussed in this article do not cover all possible issues, but these common mistakes will hopefully help you better understand how creating a product label works, and how to possibly prevent your own problems in the future.
Mistake #1: Not Understanding the Importance Between the “Construction” Versus the “Artwork & Compliance” of the Label
This may seem like common sense, but it is often overlooked. Especially when dealing with fast-track projects.
Construction of the Label is the material selected and production process to produce the label. When creating a new label from the ground up, it is important to factor in how your product will be produced, necessary shipping and supply chain needs, how it is stored in inventory and how it will be presented at the POS. Understanding what environments your product will be exposed to throughout its life cycle will give you an advantage when approving substrate material, inks, and the strength of adhesive that might be necessary for your application.
The Artwork & Compliance of the Label refers to the overall design of the label, artwork, customer messaging, bar codes and regulatory requirements you need to follow in order to avoid serious government fines that might relate to your industry (Referring to agencies such as OSHA, DOT, and the FDA).In most cases the construction of the label does not apply to the compliance of the label.
Most label providers do not have the in-house expertise to offer compliance assistance. Although it is still the manufacturer who is liable for all final artwork approvals on their product, label providers that do offer advisory services can help update label content when regulatory changes are enacted. This “safety net” can save your company from extra production costs and, potentially, excessive legal time and material costs. In short, you should always review final label artwork approvals with your compliance team and/or legal expert, but it never hurts to have a “safety net” to help eliminate unnecessary orders or production delays.
In most cases the construction of the label does not apply to the compliance of the label. An exception to this statement would be industries such as the electronics industry that use UL (Underwriter Laboratories) labels that must meet UL specifications and be produced under recognized UL files. In other words, the compliance of a UL label is the construction of the label.
Best Method Approach: An excellent example of companies that understand the difference between the Construction vs. Artwork & Compliance of the label would be the compressed gas industry. Gas suppliers and distributors require long term regulatory compliant labels on their cylinders and micro-bulk tanks. These gas tanks are used in a wide variety of industries such as for manufacturing, welding, medical procedures, and specialty gas mixes for the micro-electronics industry.
The compressed gas industry requires that their labels follow strict, up-to-date OHSA and DOT compliance requirements. As for the construction of the label, it is common practice that the label remains legible on the cylinder for an average of five years. The 5-year duration is due to the millions of tanks that are in circulation throughout the US and Canada. What’s more, each label is produced to adhere to the cylinder’s metal surface during extreme outdoor weather conditions such as fluctuating temperatures, freezing rain, high winds, and direct sunlight year-round.
Mistake #2: Applying Labels Incorrectly to Your Products
Whether the label is applied to the product surface by hand or automatically with a label applicator, the label itself may not be applied level or evenly. Besides this being a major branding issue, this could also affect how the bar codes are scanned and could eventually impact your delivery times while trying to correct a batch.
Best Method Approach: There are construction alternatives that you can choose from to potentially reduce the impact of incorrect label application. For example, products with certain label adhesives allow your production team to reposition the label within a few minutes before the tack completely sets to the surface. The type of surface (cardboard, metal, plastic, glass, etc.) and the type of adhesive will determine how much time your production team will have before the tack sets.
The best practice is to apply labels prior to filling the bottles and cans as opposed to filling first and then applying the label in your production line.A good example of this best practice can be seen in the beverage market. Whether the client produces a uniquely crafted beer, or a rare ingredient infused into a new health drink, labels that are auto-applied to bottles and cans will sometimes experience equipment tension issues that need to be recalibrated. Once labels are applied off-alignment, a delayed tack setting can allow the label to be quickly repositioned by hand when needed. The best practice is to apply labels prior to filling the bottles and cans as opposed to filling first and then applying the label in your production line. The reason, excess spillage from filling can interfere with most adhesives.
This same repositionable adhesive is excellent to keep in mind for large equipment production assembly lines that apply prime (branding) labels and warning labels by hand. Even with large wide-format labels, the adhesive tack can be formulated so your employees have a few minutes to adjust, straighten, and smooth away trapped air bubbles once it has been placed on the surface. Knowing you have this option can help reduce label inventory waste, additional production material wastes and avoid delaying production time. More importantly, this option keeps your brand and your warning/instructional labels looking fresh.
Mistake #3: Not Sharing Your Production Run Schedules with Your Label ProviderSupply chain management (SCM) models are excellent examples of the best approach.
Some of Label Solutions’ largest accounts have the most efficient real-time tracking supply chain models in North America, but even they cannot avoid sudden increased orders for their products stemming from high customer demand or similar issues. It is a good problem to have, but it is a problem, nonetheless. Manufacturers utilize supply chain management tools to notify their suppliers of their monthly order forecasts, which in turn helps suppliers manage their materials and deliveries more efficiently.
On the other side of the spectrum, when small businesses share their production schedules with a supplier it means that both parties (the manufacturer and label provider) understand when to expect higher or lower order quantities each month. Label providers should back date their label production schedules, so they have the materials available to handle your busier months while ensuring on-time deliveries.
Best Method Approach: Supply chain management (SCM) models are excellent examples of the best approach. Although SCM’s are designed for scalability and real-time tracking, the benefit to you also helps your label supplier. For example, our large retail and industrial manufacturing clients notify the Label Solutions team to produce their labels according to their Supply Chain portal demand schedules. This, in turn, allows label suppliers to allocate production time and materials more efficiently for your last-minute rush orders.
Smaller companies can take a much more simplified approach (without the SCM tracking) to help their suppliers manage their orders – even if they do not use supply chain management. A simple Excel report of production runs over a 12-month time frame is ideal. If your label provider does not already practice this or similar methodology, it might be time to start looking for a more proactive label provider. If you’re unsure you want to share your information, then you might consider requiring your label provider to sign an NDA (Non-disclosure Agreement).
Mistake #4: Not Accepting Alternative Sizes of the Label to Allow for Better Pricing
If your product needs a label with, for example, a dimension of 5.25 X 6.75 inches, there might be a much better price point offered to you if you’re open to switching to a slightly different dimension label of, say, 5 X 7 inches. Obviously, you need to make sure the new dimension would fit your product(s) and work with your production line. But, if alternate dimensions are within the scope of the project, a modified SKU could potentially cut down on cost and production time.
Best Method Approach: You might not have the time or ability to change your label if you already market that product in retail stores. But, if you are changing your branding, creating a new style of label, or releasing a completely new product, this is the ideal time to consider implementing better continuity between your products. This could include elements such as matching colors and label/packaging design.
In addition to updating your SKU’s, this might also be an opportunity for your company to consolidate multiple products onto a universal label size. By applying the same sized labels to multiple SKU’s, you can increase efficiency regarding repeated label orders, especially for label printers that use digital printers. Combine this approach with your expected annual quantity estimates and you’ll be positioned for very efficient ordering options as your company grows.
Editor’s Note: We’ll cover the next four most common labeling mistakes in Part Two coming next week. Stay tuned for more!
The cannabis industry is evolving as more states begin to legalize; as the legalization of cannabis grows, the industry will need more well-informed dispensaries and dispensary employees.
Unfortunately, there are employees in dispensaries without proper training and some are put in positions to recommend specific strains to patients that may not be accurate. Getting proper training is important, no matter which cannabis job you want to pursue.
More Training Is Needed
Currently, there are no national standards for training dispensary employees, there is not even a licensing code. Therefore, it is important for owners to investigate state laws and understand legal minimums for worker education.
There are states, like Massachusetts, which requires a $500 fee for employee registration. There are other states that require cannabis employees receive a certain number of education hours on specific topics, like patient confidentiality.
Overall, more than fifty percent of cannabis dispensary staff has reported receiving some type of formal training and only twenty percent of staff members have received medical cannabis training.
Dispensary staff should receive training on how and when to make appropriate suggestions to patients. Any successful dispensary owner will acknowledge that employee education pays off in reduced loss, increased sales and avoided fines. There are more benefits to employee training than just these and there are steps owners can take to ensure they are getting the most out of their business and employees.
Setting up a System
When a dispensary has protocols in place that show how the business operates, the company will have consistency and organization. No matter the task, all team members must follow specific procedural protocols.
Mostly, mistakes are made when steps are missed or misunderstood by new employees, but with proper and thorough training, this can be avoided. Owners should be investing in a POS software system that is straightforward; this will reduce training time and make it easier for new staff to be familiar with the system.Having budtenders that can educate and connect with the customers on a personal level is invaluable
Teaching budtenders to adopt a soft sell technique will be the most effective when it comes to increasing sales. Many customers seeking relief using cannabis are not going to respond to a hard sell technique, as this comes off pushy or aggressive.
There are going to be customers who are unsure of what products they want; theses customers will need guidance, and training employees to make suggestions based on what the customer is looking for is the best sales practice.
Having budtenders that can educate and connect with the customers on a personal level is invaluable; dispensaries that do this will have repeat customers.
More States Legalizing, More Dispensaries and More Employees
As the United States heads towards cannabis legalization, slowly but surely, we need to be prepared to train workers. When you have a dispensary that you have already spent millions of dollars on the application process, you don’t have time to be messing around with employees that are not serious.
There are many different options anyone in the cannabis industry can seek out to educate themselves more in the business.Those distributing cannabis must take their duties as seriously as pharmaceutical technicians, because in a sense that is what they are doing. They are giving information on the prescription or drug to a customer that is using it for an intended a purpose.
Cannabis users come in many different ages and aliments. It is important for budtenders and dispensary owners to understand the backgrounds of each customer to increase their up-sale potential.
While compassion isn’t something you can learn online or in a classroom, it is always a good idea to remind others to be compassionate. The budtender that asks the right questions, takes time with each patient to care for them and goes over practical products for the client will be the budtender with the most sales revenue.
Higher Learning
There are many different options anyone in the cannabis industry can seek out to educate themselves more in the business.
Some platforms are available online and are filled with important content that can teach you about different aspects of the cannabis plant and industry. These classes can prepare employees or owners for success.The most important training will be the training of patients
There are courses that can educate you in how to cook and healing with cannabis. You can also learn about laws on a state-by-state basis when you are enrolled in a cannabis-training program. The cannabis industry is large and growing; entrepreneurs, lawyers and caregivers can learn about the growing movement and expand their knowledge on this topic.
Patient Training
The most important training will be the training of patients, who will be navigating between the world of western medication and the new option of medicinal cannabis.
There are obviously many positive things that will come from the legalization of cannabis, one of the biggest being more options for pain management patients. There is a misconception that people are using medicinal cannabis as an excuse to get high; however, many patients in most states are over the age of 50.
In 2016, it was estimated that 650,000 Americans were using cannabis in compliance with the laws of their state. As legalization grows to a national level, we are going to need to be educating patients.
It is important for citizens to talk to their doctors about methods they believe will work best for them. It is necessary to communicate strains that are ineffective or unsatisfying. Keeping a cannabis journal is a good way to know what dose and strain you benefit from the most.
There are many ways patients can be educated in the cannabis industry, and dispensaries that encourage patient education will grow customer loyalty. The person who knows the facts and is confident in their information will be more successful than the person who guesses.
Be sure you, your staff and your customers know the laws, strains and can accurately answer questions about cannabis.
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The Sprout Messenger software was launched back in April of this year and at the time was touted as a gamechanger in marketing technology, allowing companies to interact with their customers via email, text and their in-house chat in two-way chats.
On the business-to-business side, WM Technology, Inc. has grown to include WM Business, a cloud-based SaaS solutions platform with offerings like point of sale, logistics, wholesale and ordering solutions software.
