Cali Cannabis Brands Start to Sell Straight to Consumers
California cannabis manufacturers and brands have started selling using a direct-to-consumer approach. This involves selling cannabis products directly to consumers through their websites, which has allowed them to bypass the delivery operations and brick-and-mortar shops that have long distributed their products to consumers.
This trend is happening mainly in Cali. Since this is the most significant cannabis space in the country and one of the most established and mature markets, it’s easy to see why this was the first place to occur. However, insiders believe that this practice is likely to spread throughout the US, particularly in states that also permit home delivery.
Kenny Morrison, the president of the California Cannabis Manufacturers Association and CEO of cannabis manufacturing company VCC Brands, believes that this COVID-19 pandemic has made this an essential move for companies that want to succeed in this space. Direct-to-consumer business models make more sense as more people use Amazon than ever before.
Setting up a direct-to-consumer infrastructure involves several options. Some operations are buying delivery licenses or partnering with existing cannabis delivery businesses. However, Morrison believes that the main selling point for brands interested in this model includes:
- The direct-to-consumer model lets consumers shop their entire line of products rather than what retailers or independent delivery companies want to carry.
- This model lets brands collect and retain customer data, allowing the businesses to gain intelligence and develop their products.
Several businesses have already begun investing in direct-to-consumer initiatives, including Old Pal. Old Pay has partnered with businesses to build out brand-specific websites for loyal customers.
The main issue with using the retail operations is that some stores will not carry all of a brand’s SKUs. However, the online experience allows these brands to offer all SKUs. When it comes to these super fans, in some cases, they’ll want to try all of the product offerings once they know these products exist.
By offering products directly to consumers, brands can try out their new products, too. With a wide assortment of SKUs comes a buffet of options for super fans, and by providing consumers with direct access to scour these options, these brands are increasing their chances of getting more products in more hands.