While loyalty programs for the legal cannabis industry have been in the marketplace for a few years now, a renewed interest from venture capital, industry consolidation, and an increasing number of states allowing marijuana sales for medical or recreational use all combine to reveal an increasing focus on building lasting customer relationships with cannabis users. Will going green continue to bring in the green? Let’s expand our minds.
By Rick Ferguson
With Colorado already established as a mature cannabis market, industry investors are turning their attention to California, a longtime medical dispensary state now gearing up to allow recreational sales in 2018. Recreational sales are expected to grow cannabis sales in the state from $2.76 billion this year to $3.8 billion in 2018, and to $6.6 billion by 2025. With Massachusetts, Maine, and Nevada also set to allow recreational sales in 2018, investor money is once again flowing into the coffers of those companies offering the technology and strategy to help dispensaries build relationships with their best customers.
Cannabis marketing platform Baker, for example, recently received $8 million in Series A funding from a number of venture capital firms, including Poseidon Asset Management. The Colorado-based company also recently acquired Grassworks, a cannabis CRM platform, and plans to open an office in Los Angeles next year. Money quote from Baker CEO Joel Milton, courtesy of the Green Market Report:
“We’ve built the industry’s leading CRM product, and now we’re truly focused on providing a platform to allow Baker and our partners to offer best-of-breed solutions to our massive retail network. This funding will allow us to continue to execute on our platform strategy, and help all of our clients grow their businesses — including those in California gearing up for adult use.”
Baker competitor SpringBig, meanwhile, has focused on helping dispensaries build point-of-sale loyalty programs for dispensaries. SpringBig’s loyalty platform integrates with existing cannabis POS platforms like Green Bits and MJ Freeway, and is now running reward programs for over 750 dispensaries. Other currently-running cannabis loyalty programs include:
- SailPlay, a dispensary-employee incentive program that has seen dispensaries increase sales by five to six times their previous run rates;
- ShowGrow, which operates in Las Vegas and Southern California as a tier-based loyalty program that awards a point-per-dollar spent;
- Ganjarunner, which also offers a point-per-dollar and allows members to redeem from a rewards catalog that includes pre-roll cannabis cigarettes, edibles, and topical oils. The program even offers 200 bonus points to members who refer friends to the program.
E-commerce is also coming to cannabis sales, as SpringBig recently announced a partnership with iheartjane.com, the cannabis industry’s only online marketplace where customers can discover and order products available in real-time at local dispensaries. The partnership will provide dispensaries on the iheartjane.com platform a simple way to implement customer loyalty and retention campaigns with SpringBig’s technology, and then utilize closed-loop reporting to develop insights on the effectiveness of their campaign. Together, iheartjane.com and springbig have created a national footprint of over 400 dispensary partners. Dispensaries also receive access to customer data, which can be translated into a targeted loyalty marketing campaign utilizing SpringBig’s self-serve marketing communication tools. SpringBig claims that its loyalty platform can deliver an average of a 25 percent sales lift per campaign and a 10-times increase in conversion rates.
Another Cannabis sales and loyalty platform, Leafbuyer Technologies, Inc., recently announced a 43 percent year-over-year sales increase, with monthly sales revenue also growing 25 percent in one month and 100 new clients joining their client roster.
There’s a lot of green in going green—but there is one potential roadblock. United States Attorney General Jeff Sessions has made no secret of his desire to crack down on the sale of legal cannabis, which remains classified a Schedule 1 narcotic under Federal Law. Unless Congress passes, and President Trump signs, legislation either reclassifying cannabis or affirming the rights of states to pass and enforce their own cannabis sales laws, the party could be short-lived. Regardless of one’s personal views on the topic, it’s fascinating to watch how swiftly a new industry adopts the tools of reward and recognition to build loyalty. Green, its seems, is a universal color.
Rick Ferguson is Editor in Chief of the Wise Marketer Group and a Certified Loyalty Marketing Professional (CLMP).