Tag Archives: service

June 29, 2023

Ask the Expert: Labor Related Compliance & Benefits to Outsourcing HR Functions

By Cannabis Industry Journal Staff

As the cannabis industry grows, companies are faced with more labor related compliance and regulatory issues, which require time and expertise. Rather than hire internal staff to manage human resources (HR) and compliance, many companies choose to outsource nearly 85% of HR functions. These functions include payroll administration, HR tasks and other employment liabilities, like insurance, to a third-party Managed Service Provider (MSP). This model frees up internal resources to grow and develop the company’s core business, while also offsetting risks associated with employment, taxes and insurance.

With markets across the country maturing at a rapid rate, change is a constant. Cannabis companies operating in new markets need to maintain compliance while focusing on their business plan, which can be a difficult task. We sat down with Nick Murer to learn more about compliance issues that cannabis businesses face, like workers comp, payroll taxes, insurance and how outsourcing some HR functions can help.

Q: What are some of the major labor compliance issues faced by employers in the cannabis industry?

Nicholas Murer: Like other industries, the cannabis industry is subject to labor related regulations like paid time off, harassment prevention training, workers compensation requirements, payroll taxes, pay transparency, unemployment insurance and reporting. Unless companies have an expert, or a team of experts, monitoring and managing compliance on both the employer and employee side, they may quickly find themselves in hot water with state regulatory agencies, or even with an employee for labor law violations.

Another issue continues to be access to banking and payment processing. Many cannabis companies continue to pay employees and vendors in cash, which creates not only problems in accurate accounting, but safety concerns for employees as well. There are banks and credit unions that will work with cannabis companies, but without a partner who has relationships with and access to a proven and trusted network of banks and processors, monthly account and transaction fees can be expensive and out of reach. With the SAFE Banking Act stalled once again in Congress, this will continue to be an issue.

Q: How can cannabis companies mitigate their risk by outsourcing HR functions?

Murer: By utilizing a Managed Service Provider (MSP), cannabis companies enter a labor contract model for payroll and HR administration. An MSP is a professional workforce management company that provides comprehensive employment services for businesses.Nick Murer and the WECO team will be at the CQC this October 16-18. Click here to learn more.

This model provides the client company with the best labor practices, risk mitigation and claims management with access to national workers compensation and unemployment insurance. The MSP is the employer of record, so is responsible for most aspects of the employee/employer relationship. The day-to-day management of the employee continues with the client company, but the company’s liability and risk are reduced. MSP compliance risk reducing services include:

Background screening and reporting
Labor related compliance management at state and local levels
Handbook and policy management and distribution to employees
A central location for employee onboarding, time and assignment tracking, payroll administration and reporting
Separation of labor cost for each location/company for 280E tax mitigation
All federal, state and local tax filings
Employment verification
Employee access to health insurance
Employee access to banking for payroll direct deposit

Outsourcing to an MSP provides cost savings to the company, including:

Reduced staff
More efficient payroll processing and legal compliance
Streamlined recruitment

Utilizing WECO to manage the employer of record process allows client companies to look beyond traditional payroll to a full workforce management solution that ensures a smooth payroll and provides the tools that can support the growth and development of a workforce including compliant banking, human resources management and employee services.

About Nicholas Murer

Nicholas Murer formed WECO in 2014 to provide human capital financial services to the legal cannabis industry, offering services like payroll management, workforce management, human resource implementation, accounting solutions, recruiting and staffing. Nick Murer has more than twenty years of professional and technical sales experience working globally in the energy, engineering and scientific industries, including a substantial background in industrial technical sales, account development, marketing, human resources, acquisitions and project management. He studied accounting and business management at the University of Pittsburgh and organization development and human resource management from Colorado State University.

Content sponsored by WECO.

September 6, 2022

The Coming Cannabis Data Squeeze – And Why So Many Companies are Flying Blind

By Michael Blanche

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“Data” is a hard concept to picture. It’s even harder to visualize what your data is saying about your business. Many important insights are processed on different systems, never to see the light of day.

In the digital advertising industry, we call this “data silos.” In the cannabis industry, we call this the cost of doing business.

Without traditional tech tools or a source of truth on market sentiment and trends, there’s no common picture that can show us the day-to-day behavior of today’s cannabis consumer. Companies are often guessing what consumers want based only on the data they have available.

To keep growing, dispensaries and brands have to modernize how they understand, activate and measure customer data. Luckily, it may be easier than you think to start making better use of your customer data right away, which means it’s easy to simplify how you connect to both existing and new consumers, driving more engagement and revenue.

Cannabis companies that started digital-first have a head start on legacy businesses: phone numbers, emails, customer preferences are all first-party data that can help you find and advertise to new customers.

Here’s how:

1. Build Your Customer Database with a Rewards Program.

A 2022 YouGov survey found that when cannabis consumers are asked about how they make purchasing decisions:

36% said quality and safety
34% said lowest price
32% said location (proximity to home)
31% said preferred products

Most cannabis businesses know the power of rewards programs, but usually depend on steep discounts to get customers back in the door. Rewards programs can also offer promotions for new product releases, exclusive access, community events and other things that offer information about things you know your customers already care about.

The most valuable thing about a rewards program isn’t just the sales – it’s the data. If a customer makes a profile with an email and a phone number, you have the basic building blocks for a first-party data strategy. Just make sure you have a way to keep that data organized on the back-end.

Want the real secret? Segment your email and SMS list by what you know your customers want. Send different communications for different customer groups and behaviors – like edible users and pre-roll buyers or monthly buyers and weekly buyers. Figure out what resonates and repeat!

2. Budtenders that Care.

A relationship with a budtender is sometimes transactional. Other times, it’s confessional, fun, or, if a consumer is new to buying cannabis or trying different products, educational.

As one survey found: 22% of customers always decide what to buy based on budtender advice and 69% said they seriously consider their opinions.

Good budtenders get to know the customers and can become advocates for staying in touch. Training them to sign up customers for a rewards program or exclusive offers can help build the relationship that keeps people coming back and allows you to stay in touch. This is how you can link your data efforts with your frontline employees.

3. Find a Secure Way to Manage Your Customer Data.

To segment customer data and build customer profiles with additional information – like purchase history or demographics – you need to find a solution built for a growing customer database. Some options, like an email marketing platform, can get you halfway there. But a lot of companies still rely on Google Sheets, which can take hours to understand and end up exposing a lot of customer data out in the open.

The right customer data platform should help you connect and integrate all your different data sources, from website and ecommerce platform to point-of-sale. This allows you to understand macro and micro market trends by making your customer segments transparent and easy to manage as they move down the path to purchase. You can also identify which segments drive the most value over time and what attributes and behaviors they have in common.

By managing customer data from one platform, you can dramatically increase the transparency across all the valuable insights that affect your business. And then make use of those in your next big advertising campaign.

Combining Co-Marketing with Community

You can avoid the cannabis data squeeze by modernizing how you handle customer data. Dispensaries with advanced data management practices are often processing thousands of transactions a day and constantly enriching their understanding of customers and their target markets. Unlike dispensaries, brands don’t have the same volume of new data. This has a lot of implications when you’re trying to reach new customers, because when a brand launches a digital advertising campaign, a lot of budget can get wasted if the audiences are based on a limited dataset.

That’s where co-marketing digital advertising campaigns can help. Cannabis companies collaborate to activate events and retail displays. To really build awareness and drive sales, cannabis brands should reach a dispensary’s existing customers and advertise in coordination with the dispensary. With the right dataset, you can show ads just to a dispensary’s best customers, and the ones most likely to buy your product.

The most exciting part about the future of the cannabis industry all comes down to data. The community grew together, and now businesses can innovate together – building a better customer experience by understanding every stage in the journey. In a relationship-first industry, cannabis digital advertising has to be as personalized as a budtender’s recommendations.

September 5, 2022

Cannabis Beverage Distribution: A Q&A with Jason Vegotsky, CEO of Petalfast

By Aaron Green

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The cannabis beverage market is expected to reach $2 Billion by 2026 and is growing at a rapid pace. In Canada, the market share of infused beverages grew nearly 850% since 2020, according to a recent Headset report, the trend is expected to follow in the States. Some traditional beverage companies are hesitant to jump in due to the niche branding and supply chain models needed to capture significant market share. Other adult beverage companies such as Vita Coco and Pabst are dipping their toes into the cannabis beverage market to capture early market opportunities.

Sales and marketing agencies like Petalfast, with a core team stemming from the natural foods and beverage industries, have already started cracking the code for cannabis brands by implementing systems straight out of those industry’s playbooks. This includes disrupting the CA market by becoming the first to implement a traditional three-tier distribution model.

We caught up with Jason Vegotsky, CEO of Petalfast to learn more about the cannabis beverage distribution market. Prior to Petalfast, Jason was Chief Revenue Officer at KushCo Holdings (now Greenlane Holdings), a role he took on after selling his butane supply company to KushCo.

Aaron Green: How did you get involved in the cannabis industry?

Jason Vegotsky: I began my career in wine and spirits distribution, but I always knew I wanted to work for myself. My first foray into launching a business, raising capital and brand building was through my beef jerky company, Lawless Jerky, which I built and sold after five years. Drawing on my food and beverage experience, I quickly entered and understood the cannabis market. I launched a company called Summit Innovations that sold butane to producers making oil. I eventually sold Summit to KushCo Holdings, Inc. (now known as Greenlane Holdings, Inc.) and became their President and Chief Revenue Officer. Through that experience, I began to notice gaps in the cannabis distribution model. Petalfast was built to fill that gap, providing clients with exceptional go-to-market strategies, leading to increased revenue and customer loyalty.

Green: How does experience in natural foods and traditional beverages translate to the cannabis industry?

Vegotsky: The route-to-market strategy is similar to that of cannabis, and the industry can benefit from the knowledge and experiences of those who work in natural foods and beverages. The extensive regulatory history and long-standing distribution models of these industries can provide a framework that those in the cannabis industry can capitalize on.

Green: What is the current distribution model for the majority of cannabis beverage companies today?

Vegotsky: Cannabis beverage companies face significant regulatory hurdles regarding distribution. Transportation restrictions, state-by-state differences in THC serving sizes and packaging requirements, retail display and storage limitations, and consumer adoption are just a few examples of what cannabis beverage brands run into when looking to enter, compete or scale in a given market.

At Petalfast, we offer a tiered distribution model, and our clients get phenomenal distribution through our logistics partner, Nabis. Products are circulated to all of California’s dispensaries and delivery services, allowing brands to focus on what matters most: creating the highest quality cannabis products on the market.

Green: What is a three-tier distribution model? Why do you think the cannabis beverage market is ripe for this model?

Vegotsky: The three-tier distribution model is commonly deployed by alcohol and other traditional food and beverage companies as it provides each tier to scale their operations and focus on their specific services. The three tiers include the brand, the wholesaler (sales + distribution), and the retailer in this distribution model. Because cash flow is such a significant challenge in the cannabis industry, adding an extra tier by separating your distribution and sales is advantageous to brands as it decreases overhead and allows brands to have the ability to scale.

Green: What are the opportunities for smaller brands looking to carve out a niche?

Vegotsky: One of the benefits of working in an emerging market is the opportunity to get in on the ground floor, learn as much as possible about the industry and find where gaps exist. Brand building in this space requires a deep understanding of the consumer and the overall culture — something that most brands are still trying to crack. If a smaller brand can effectively target a base within a distinct product category, it can be very effective in scaling within its niche.

Green: With big players from adult beverages dipping their toes in the cannabis beverage space, is consolidation inevitable?

Vegotsky: At a certain level, yes. Well-established companies will seek out acquisitions of smaller, successful companies, especially ones that are capital constrained, but buyers need to be aware that capital alone will not be enough. The culture of cannabis is very different from alcohol or other adjacent beverage categories, so the success of these big players in adult beverages will be linked to their ability to locate and understand the consumer and implement branding strategies accordingly. Adult beverage companies entering the cannabis market must also realize that the flow of product to retailers is not the same as in alcohol, so they will need to adjust accordingly. The cannabis-infused beverage market is expected to reach $2 billion by 2026, so alcohol companies looking to join this movement should start exploring their options now.

Green: What trends are you following in cannabis beverages? What does the future of cannabis beverages look like?

Vegotsky: Canna-tourism has grown to a $17 billion industry. With the rise in cannabis-infused beverages, we’re seeing an increase in creative consumption offerings, from tastings and food and beverage pairings to dispensary tours and bud-and-breakfasts.

Cannabis beverages are attractive to newcomers as they allow for easier control of the effects. Businesses that provide an experience similar to that of a wine or brewery tour can capitalize on new consumers looking to explore the benefits of cannabis in a controlled environment.

The modern consumer is also more health conscious, and with the increased availability of legal cannabis, many are replacing alcoholic beverages with the plant. There has been a reported decrease in alcohol consumption since the 1980s, and many now believe cannabis is safer than alcohol. This belief is especially prevalent among younger generations, leading to more users incorporating cannabis-infused beverages into their daily lives. How we socialize or unwind at the end of the day will start to look different, and brands will become market leaders by speaking to the varied needs of consumers.

Green: How does the industry get there?

Vegotsky: For one, federal decriminalization and removing cannabis as a Schedule I drug on the controlled substances list would help. Cannabis companies don’t have access to the traditional marketing playbook to promote their brands due to TV advertising and social media restrictions. To build brand awareness, businesses should focus efforts on the retail level. Engaging with consumers in-store allows brands to grab their attention and drive faster sales until other avenues open up. At Petalfast, we decided to invest in field and trade marketing to bring brands to life at the retail level. We do this better than anybody else, and we do it at scale.

August 3, 2022

The B2B Marketplace Trend Comes to Cannabis (Finally)

By Adam Benko, Brian Mayfield

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Ancillary services are a hot topic in the cannabis industry, as they are in many niche industries turning to B2B marketplaces to connect with specialized expertise and products.

Platforms such as Amazon Business, Flexport, SupplyHog and others have emerged to connect mainstream business sectors with the vendors and services they need, but things look a lot different in the cannabis space. The many disparate aspects of launching, running and scaling a cannabis business—and vetting dozens of service providers clamoring for your business—can feel like playing whack-a-mole blindfolded.

While a business consultancy can do some of the heavy lifting, there are reasons why this traditional “one-size-fits-all” approach is problematic. However, the rise of legalization is creating new avenues for founders in both established and emerging markets to take charge of their destiny and secure the services that truly meet their needs.

Understanding what’s available can help founders avoid pitfalls, from inadequate insurance coverage and predatory lenders to inexperienced service providers seeking to cash in on the “green gold rush.”

The Importance of Regulatory Knowledge

One reason B2B services look so different in the cannabis industry is because the industry itself is still rapidly evolving, as new state markets for medical cannabis and recreational adult use come online and states constantly amend their regulations. There’s also the sprawling scope of compliance requirements facing a cannabis operator, from securing tightly zoned real estate to building a facility with adequate security, to integrating into the state’s seed-to-sale tracking system.

It’s critical to engage with experts who are knowledgeable on the regulatory variances of the state (or states) where the business will operate. Someone who has experience interpreting cannabis regulations will know, for example, if you should have a real estate lease locked in prior to applying or if a particular state would prefer you move through the pre-opening process in a different order.

Another reason ancillary services are so important is that cannabis regulations aren’t standardized on the federal level or even state to state, which requires an especially deep, granular level of understanding of market trends and compliance demands. That can make the difference not only between a successful business launch and a swift nose dive, but also between a business surviving a major disaster or setback and becoming past tense.

Insurance and Lending Issues

Every business owner knows they need insurance, for example, but not every insurance broker knows what specific coverages to lock in to ensure a payout if a dispensary is vandalized or if a wildfire burns a grow operation to the ground. While federal legislation like the Clarifying Law Around Insurance of Marijuana (CLAIM) Act could one day make it easier for national insurance companies to serve legal cannabis businesses, currently criminal conduct exclusions can be used to keep plant-touching business owners from getting their full payout.

Fires in Sonoma County devastated cannabis crops in Northern California back in 2017.

Not only does federal prohibition make it challenging for a cannabis business operator to find proper insurance coverage, access financial networks and establish employee benefits programs to keep industry jobs competitive, even seeking investment capital can leave cannabis companies exposed to unfavorable terms. Just look at the case of iAnthus, a multistate operator that claims to have been burned in a deal with Gotham Green Partners while looking for expansion funding.

So how can cannabis leadership locate and vet professional services, particularly in the critical startup stage when it feels like everything has to happen right away? That’s where the B2B marketplace trend comes in.

The Advent of Vendor-Agnostic B2B Marketplaces for Cannabis

While platforms such as Amazon Business have offerings for a variety of mainstream industries, they’re not tailored for cannabis. But there is a growing field of vendor-agnostic specialists helping cannabis founders make the right moves.

Vendor-agnostic consultancies are nimble and adaptable in a way that broad-scale platforms are not

Necessity absolutely produced this particular innovation, which upends the traditional single-funnel consultancy model to instead create a village that can raise a variety of cannabis businesses. Vendor-agnostic consultancies are nimble and adaptable in a way that broad-scale platforms are not. And rather than being tied to a particular suite of products and service providers the way traditional business consultancies often are, the vendor-agnostic approach gives both consultants and cannabis founders much-needed flexibility.

In a cannabis B2B marketplace, a pool of inventory-tracking software vendors, for example, can be sorted to allow for easy comparison shopping based on whether the operator is a single-state startup looking for basic integration with the state compliance system, or an MSO that needs a more robust platform. And the customization extends from there—vertically integrated businesses versus standalone wholesale producers, plant-touching businesses versus other professional service providers and beyond.

As more and more industries specialize, it’s no wonder ancillary services are having a renaissance and replacing the traditional one-size-fits-all model popularized decades ago. But it’s also no wonder that the cannabis industry needs an especially unique approach to professional support for niche fields. The more this industry expands, the more founders and their B2B partners need to roll with their own solutions.

July 8, 2022

The CLIMB Act: How the Cannabis Industry Could Benefit

By Zachary Kobrin

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The cannabis industry could receive a significant boost if the recently introduced Capital Lending and Investment for Marijuana Businesses (CLIMB) Act passes Congress. The bipartisan bill was introduced by Rep. Troy A. Carter, Sr., a Democrat from Louisiana, and Rep. Guy Reschenthaler, a Republican from Pennsylvania. It is intended to boost the cannabis industry by creating greater access to capital, banking insurance and other business services. Unlike the SAFE Banking Act (which specifically addresses banking services for the cannabis industry), the CLIMB Act was introduced “to permit access to community development, small business, minority development and any other public or private financial capital sources for investment in and financing or cannabis-related legitimate businesses.”

Currently, the cannabis industry faces a serious dilemma with regard to accessing not only traditional banking services, but also essential capital and financing sources. The latest member of the cannabis bill alphabet soup attempts to remedy this by addressing two key issues.

First, the CLIMB Act would permit access to key “business assistance” programs from various financial institutions by prohibiting any federal agency from bringing any civil, criminal, regulatory or administrative actions against a business or a person simply because they provide “business assistance” to a cannabis state-legal company. The CLIMB Act defines “business assistance” broadly to include, among other things, management consulting work, accounting, real estate services, insurance or surety products, advertising, IT and other communication services, debt or equity capital services, banking or credit card services and other financial services.

This provision of the CLIMB Act would immediately create more access to traditional insurance, lending and credit. This broad protection would not only apply to private entities providing “business assistance,” but arguably means that the U.S. Small Business Administration (SBA) could not be penalized by Congress or another government agency for providing loans to state-legal cannabis companies. Moreover, currently the cannabis industry does not have access to use credit cards, as major credit card companies refuse to permit such transactions. The CLIMB Act could pave the way for major credit card providers to begin permitting cannabis transactions. Permitting the use of major credit cards like American Express, Mastercard and Visa could result in an increase in sales for cannabis retailers.

The second, and possibly the most important, aspect of the CLIMB Act is that it would amend the Securities and Exchange Act of 1934 to create a “safe harbor” for national securities exchanges like Nasdaq and the New York Stock Exchange (NYSE) to list cannabis companies and would permit the trading of these cannabis businesses stock. Currently, plant-touching cannabis companies with operations in the U.S. can only be listed on a Canadian-based exchange and can also only be traded in the U.S. via the over-the-counter (OTC) markets. Trading securities on the OTC markets does not provide the same level of security as securities traded on a national exchange like Nasdaq or NYSE. Specifically, the CLIMB Act delineates that the federal illegality of cannabis is not a bar to listing or trading of securities for legitimate cannabis-related businesses.

This provision of the CLIMB Act has two immediate effects. First, the CLIMB Act would allow for U.S. cannabis companies currently listed in Canada to list on the Nasdaq or NYSE. Second, this provision would allow more traditional, “blue-chip” industry companies currently listed on Nasdaq or the NYSE who haven’t been able to operate within the cannabis industry as a plant-touching entity, to enter the cannabis industry as an active participant.

In announcing the CLIMB Act, Representative Reschenthaler stated that “American cannabis companies are currently restricted from receiving traditional lending and financing, making it difficult to compete with larger, global competitors. The CLIMB Act will eliminate these barriers to entry, and provide state-legal American cannabis companies, including small, minority, and veteran-owned businesses, with access to the financial tools necessary for success.”

It is important to note that the CLIMB Act, like the SAFE Banking Act, only represents one small, but important step toward cannabis reforms. Neither proposal would legalize, de-schedule or reschedule cannabis. Rather, the CLIMB Act addresses very real-world, operational issues facing the cannabis industry. With that in mind, the CLIMB Act would certainly provide much needed clarity for issues facing all cannabis companies.

Passage of the CLIMB Act is not a forgone conclusion, but rather is quite uncertain. Other pieces of cannabis-related legislation, like the SAFE Banking Act, have passed the House of Representatives multiple times without the U.S. Senate taking any action. Moreover, the CLIMB Act was introduced with only two legislative supporters.

March 16, 2022

Cannabis Businesses Need D&O Coverage; What Does The Insurance Landscape Look Like?

By Benjamin Sibthorpe

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Cannabis continues to be a hot sector across the United States; buoyed by its ‘Essential Business’ status during the pandemic, a surge of plant touching and ancillary service providers have set up shop in the past 12 months to capture a share of this burgeoning growth. The cannabis industry is currently the leading job creator in the country, employing almost 430,000 workers according to a recent report from Leafly. Estimates on the overall size of the industry vary depending on the source, but projections of over $100bn in value by 2030 are not uncommon, while M&A activity continues to gather pace after a downturn in 2019. Clearly, investors and the public are bullish on the industry as a segment, with further state legislation to expand the number of adult use and medical markets to come. So why is the directors & officers (D&O) and management liability insurance market not embracing this growth industry?

At its core, a good D&O policy will protect the individual directors, officers and executive teams of companies, including their personal assets, in the event of suits and allegations filed based on their running and oversight of their business. For private companies, this also extends to balance sheet protection and coverage for the entity; for public companies, coverage for securities suits and claims.

The cannabis industry, despite the macro factors propelling its growth, faces numerous challenges when trying to procure D&O insurance. Very few D&O and management liability carriers are willing to entertain cannabis and related risks; even fewer are specialty underwriters willing to provide meaningful, expert coverage which truly addresses the exposures faced by executives and operators in the cannabis industry.

Cannabis D&O premiums can cause sticker shock, typically priced 4 to 10 times higher than non-cannabis businesses. Some operators have an air of invincibility and forego the purchase, believing it is not worth the cost. Meanwhile, the ability to attract and retain talented executives and directors away from other industries typically depends on having this coverage purchased and in place. Yet the outlay can be a burden in an industry which already faces fierce competition for market share, and a disparate tax treatment at a state and federal level.“The value of a D&O policy cannot be overstated.”

Even those carriers and underwriters who do entertain cannabis risks are constantly evaluating the nuances of the space: an ever changing complex state regulatory environment; the relative immaturity of the industry and the hyper-focus on growth; the lack of standardized valuation and accounting; the lack of access to institutional financing; the continued uncertainty of insolvency or restructuring in lieu of federal bankruptcy protections for plant touching companies; the operating inefficiencies for MSOs across state lines and the lack of interstate commerce; in short, the cannabis industry certainly poses its own unique and evolving risks for D&O insurers.

Ultimately the market will continue to evolve for cannabis insureds, as the data matures and the regulatory landscape become clearer. The value of a D&O policy cannot be overstated. Most public companies purchase D&O as a matter of course, but even for private cannabis companies, the right coverage is invaluable. Not having the protection afforded by a D&O policy can be ruinous for a cannabis operator, particularly in a niche area where defending claims and circumstances is complex, time consuming and ultimately expensive – typically much more so than the upfront cost of the D&O policy.

Partnering with the right broker who specializes in both management liability and cannabis is step one to getting the best value coverage. Step two is securing a policy from a dedicated market with underwriters who truly understand the cannabis space and tailor coverage to protect the executives, boards and companies that are driving this exciting growth industry.

November 12, 2021

Creating a Deeper Client Relationship with a Customer Success Mindset

By Samantha Smith

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Why is customer success a critical differentiator when evaluating technology partners for your cannabis operations? You’re probably familiar with a customer service department. Typically, a customer service team is a reactive relationship that you call on when you have a question or problem. Customer success is different because it takes a proactive approach to relationship management and focuses on your company’s desired outcomes.

It Starts with Transparency

The customer success team is introduced during the sales process, so they know the customer’s goals, objectives and the pain points they’re looking to solve. Keeping these priorities top of mind allows the entire implementation process to align to the customer’s objectives, ensuring immediate success after purchase and a long-term roadmap for future deployments.

A boilerplate solution in software implementation is often not a good idea. While you need standard processes in software deployment, it’s mostly about listening and learning to adapt to a customized approach. Each client can weather different levels of change and advancement, so a customized strategic effort starting in the beginning of the process can help avoid issues later on.“Customer success ensures you are not making unnecessary investments while educating you on available software that would complement existing technology.”

Implementing new software can be a lengthy and challenging process, depending on how many team levels need access, what software integrations are required and the level of business activity you have on a seasonal basis. Adopting new technology into facilities can be even more complicated when implementation delays occur, or the product isn’t working as intended during the initial rollout. Customer success provides transparency throughout the deployment process by conducting ongoing timeline reviews, drafting enablement plans that work within your schedule and driving awareness and adoptions throughout your organization, resulting in a faster return on investment.

Creating a Deeper Partnership

Customer success works as an advocate for the customer while balancing the needs of the business. With software products, it’s easy to turn capabilities on as it is to turn them off, so determining the right timing for each new feature is part of the balancing act. Knowing when customers are ready for specific features and functionality provides a software roadmap for a customer. In this role, the customer success advocate becomes a trusted advisor and becomes integrated into the customer’s business operations.

Being Proactive, Not Reactive

A simple way to describe the differences between customer service and customer success is to consider how your software vendor works with you. Is it a proactive approach or a reactive one? Customer success always leads proactively, strategizing on solutions to benefit the customer immediately while also keeping the long-term vision top of mind.

Creating Benchmarks for Success

Software as a Service (SaaS) has become a competitive advantage for cannabis operators looking to implement a consistent, cost-effective cloud-based technology. Still, many companies end up overspending or paying for more licenses than needed. Customer success ensures you are not making unnecessary investments while educating you on available software that would complement existing technology. Customer success does this by providing tailored reporting, enabling existing and new team members within your facilities on product features and functions, and aligning your software deployment to your facility’s requirements.

When considering a technology partner, inquire about post-sales support. Do you only hear from your technology providers when it’s time for renewal or when you call in for help? Are they offering a “set it and forget it” support model approach? Customer success is about a mutually beneficial relationship between the customer and the software vendor, retaining a happy, using, paying customer who achieves a measurable outcome when using the software. Your success is customer success.

September 15, 2021

WeedMaps Acquires Sprout

By Cannabis Industry Journal Staff

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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.

July 7, 2021

A Guide to Outsourcing Your Cannabis Delivery Service

By Claudia Post

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If you are interested in adding a new delivery option for your cannabis dispensary, choosing a third-party service is a great move. Generally speaking, the most significant selling points of third-party delivery services are overhead cost and convenience.

Not only will third-party delivery services run your entire courier operation under a single platform, but they will also streamline your sales process with the latest technology. In addition, working with a third-party vendor will help you avoid financial risk with workers’ compensation and auto insurance expenses.

Please consider the following points to build a successful partnership with a third-party cannabis delivery service.

Research Your Local Market Regulations

Before you can outsource a delivery option for your cannabis dispensary, you need to research if it’s legal to do so in your given market. Whether medical or adult-use, each state has unique regulations for delivery services. In addition, individual counties and municipalities within these states also have their own rules concerning cannabis delivery on a more granular level.

As an illustration, Denver, CO, has had an adult-use cannabis market since 2013, but the city just passed legislation approving delivery services. So, starting in late summer 2021, third-party vendors will be the only businesses allowed to deliver cannabis in Denver legally. As can be seen, just because cannabis is legal in a particular state doesn’t mean delivery is always an option.

How Do I Vet a Potential Delivery Partner?

You must be discerning when starting a partnership with a third-party cannabis delivery service. As these delivery companies will be representing your brand in the field, you want to make the best choice possible. Luckily, there are some specific parameters you can follow in vetting a potential delivery partner.

License: Perhaps the most critical part of vetting a delivery partner is ensuring they have the appropriate license. Especially in hotbeds like California, countless unlicensed cannabis businesses are in operation, including delivery services. Therefore, asking to see their paperwork should be the very first step in vetting.

App & User Experience (UX): Taking a good look at the User Experience (UX) provided by a third-party vendor’s app or website is a great way to vet them. In the end, delivery services are all about convenience. If their ordering software is robust and offers flexibility and great reporting, they will likely provide you the springboard to retain your repeat buyers.

Payment processing can be a challenge in retail

OSHA Certification: Another critical factor to consider when vetting a delivery partner is OSHA training. Those companies who have taken steps to train their employees on safety protocol appropriately will likely make good partners.

How Does Online Ordering Work with My System?

Payment processes for cannabis dispensaries are incredibly complex. Moreover, since cannabis is still federally illegal, major credit cards and banks do not accept charges from dispensaries. Because of such complexities, the prospect of accommodating deliveries might prove to be a challenge.

Enter Scarlet Express. Third-party cannabis companies like Scarlet Express can integrate with your established system to seamlessly add delivery payments. They even offer customizable software that integrates with your menu provider and POS system while also importing essential brand elements like logos and colors.

If you are a small cannabis dispensary that has never developed online ordering, certain third-party vendors can also help you build out an eCommerce page on your website.

What About Compliance & Seed-to-Sale Tracking?

Compliance is one of the essential elements of running a successful cannabis business. However, compliance regulations can get tough to follow when you begin dealing with third-party delivery companies, namely because cannabis products change hands several times before they are finally sold to the consumer.

The state has thoroughly vetted any third-party delivery service that has received a license. Therefore, not only are they up-to-speed on compliance protocol for your given market, but they are also trained on the appropriate seed-to-sale software. With these controls in place, you can trust they assume legal responsibility for cannabis products after leaving the dispensary.

To operate compliantly, third-party delivery services time-stamp their orders, which can then be tracked through GPS in the delivery car. Finally, all cannabis products are stored within a secure lock box that is only opened at the time of delivery.

Adding a delivery option for your cannabis dispensary is a great way to entrench yourself with your clients. Working with a third-party delivery service is a painless way to expand your business.

When considering a partnership with a cannabis delivery service, be sure to thoroughly vet them and make sure they share your goals and vision. In doing so, you will ensure an invaluable partnership that will continue long into the future.

March 30, 2021

Implement These Tips to Quickly Fortify Cannabis Dispensaries

By Heather Bender

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Based on the recent string of cannabis thefts in Portland, Oregon, the spotlight is shining even brighter on the need for enhanced security measures at cannabis dispensaries throughout the country. According to the Oregon Liquor Control Commission, the Portland metro area alone has experienced more than 120 cannabis shop burglaries since March 2020, resulting in a reported total loss of more than $500,000 in cash and products.

Robbing a cannabis dispensary is as lucrative as robbing a bank. Cash is king in the shops until the Secure and Fair Enforcement (SAFE) Banking Act is passed to prohibit federal banking regulators from penalizing depository institutions that provide banking services to legitimate cannabis businesses. Until the Act is passed, it is widely known that all transactions must be done in cash—which makes cannabis dispensaries a prime target for thieves.

Dispensaries are prime targets for burglary. Defending your storefront requires a comprehensive security plan.

While many security protocols—such as product traceability systems and security cameras—are mandated by each individual state, dispensary owners should take measures to actively secure their product, protect their employees and preserve their businesses as theft increases.

One of the quickest and most cost-effective ways to fortify shop security is by implementing rolling security doors. After determining what level of security is needed, consider these four tips to help deter criminal activity and ensure the safety of both employees and products.

Tip 1 – Defend The Storefront
Designed to prevent against looting events and burglaries, heavy-duty rolling steel doors offer cannabis business owners robust security. They can be retrofitted into existing buildings, are exterior mounted and are ideal for storefront defense—including protecting glass windows, which can be expensive to replace. Unlike more common rolling grilles, thieves can’t see merchandise when the rolling door is lowered. In addition to the door giving the building a secure look, blocking sight access is key to deterring criminals.

Heavy-duty steel doors must also be lift- and pry-resistant. Manufacturers put the doors through rigorous testing, and some security doors even meet Department of Defense forced entry standards, which can provide up to an hour of protection against violent attacks against the door to gain entry. Look for rolling security doors that can withstand heavy impact and resist pry attempts with common tools, as well as doors that are lift resistant. Some manufacturers offer doors with robust slide locks and rigid heavy-duty bottom bars, enabling the doors to withstand up to 4,500 lbs of lifting effort.

Tip 2 – Protect While Allowing Visibility and Airflow
If product visibility is desired, but more robust security is needed at the storefront—beyond a security measure such as impact glass—a heavy-duty security grille is an excellent choice. Security grilles are easy to custom order and don’t require structural modifications to fit individual spaces. They are easily installed behind storefront glass, are compact enough to remain out of sight when not in use and require little maintenance.

Strong rolling service doors can protect delivery entrances well

It’s important to work with a manufacturer to select a rolling grille that provides dependable, increased security. Choose grille curtains with rods that are spaced closer together and have heavier links. Security grilles with these features are harder to lift and pry than standard rolling grilles.

Rolling security grilles are also an ideal solution to protect counters inside the dispensary. They can be easily concealed in small headspaces where there is limited ceiling room.

Tip 3 – Fortify A Store Within A Store
For cannabis dispensaries located within high-end retail shops, it is important to consider additional security measures to separate the dispensary from the rest of the store.

A store within a store may be subject to different hours of operation as states often dictate specific operating hours for cannabis dispensaries. Altered operating hours necessitate an easy way to secure only a small section of a larger store.

If aesthetics are of concern inside retail shops, a woven metal mesh grille will provide both beauty and security without imposing looks while securing cannabis products as customers browse throughout the store. Manufacturers offer a variety of patterns and even logo designs as a way to bring more creativity to a grille’s aesthetics—making them rolling pieces of art.

Tip 4 – Secure Deliverables
Dispensary owners sometimes overlook the fact that thieves target deliveries. Deliveries that are made at the back of the store or in receiving areas may be the most at risk. It is of utmost importance to be aware of how deliveries are timed, who is present during them, and how the product is handed off.

Robust rolling service doors provide the best security for delivery entrances and are more secure than traditional rolling sectional doors. Made from slats of formed galvanized steel, aluminum or stainless steel, these rolling doors are completely customizable to meet existing building designs and are ideal for areas with limited overhead room.

Robust Protection
By closely evaluating the levels of security needed, the layout of the building and where deliveries take place, security updates and enhancements are easily implemented with the right rolling doors. Every door is made for a specific opening, so each one is custom-made for its application. Choose a knowledgeable manufacturer that will help determine which rolling closure suits the dispensary’s needs.