Everything Is Retail. The Cannabis Retail Industry Is Broken and Failing!

Twice I’ve said no to the Cannabis Industry on CEO roles. For these reasons, it is unstable, unplanned, unsustainable and has an underwhelming performance record, because it is regulated, has high costs and is overpriced.

In fact, even High Tide Inc. a competitor has had 97% growth in revenue but is still losing money. Investors in this industry have seen no returns.

As I said in past LinkedIn posts there would be failures and consolidation because of over-optimistic expectations. What are their biggest problems?

1. it’s clear they can’t compete with the street vendors
2. They’re over-invested in the wrong store’s locations and designs.
3. Government needs to give them more breathing room to compete.
4. There really is no differentiation despite what they believe.
5. The market is not growing as fast as they thought. I suspect there is little loyalty and consumers shift in swarms.
6. It’s generally not a health-driven business sector despite all the coverage that it is.
7. Not all consumers are comfortable being seen shopping in these stores. There is a stigma.
8. The costs of the product are very high.

“Of all the bankruptcy claims through CCAA last year, 40 percent were by companies in the cannabis industry, said Ranjeev Dhillon, McCarthy Tétrault.”

If they want to survive, their strategies need to change.
- Move away from a dispensary model
- kiosks size stores are best.
- allow shop-in-shop within other retail venues
- even controlled dispensing machines…which are already being used sporadically.
- grow home delivery faster.

And this industry needs a higher level of retail professionals because it needs greater marketing, HR, Merchandising, Design and Operational experience. The failures are clearly saying so.

https://lnkd.in/gSniPyre
#retailing  #strategy #ceo #marketing  #innovation #cannabisindustry
Fire & Flower