New laws allow recreational cannabis sales in more than 20 states, but it remains illegal under federal law, making starting a retail cannabis business difficult. This is Part 2 of a series. Part 1 featured Gotham, a cannabis “concept store” opening in New York in April.

Licensed cannabis retail stores are beginning to open in New York, but because they’re required to sell products sourced only from the state, that supply chain had to get a headstart a year ago.

In 2022, many of those cannabis producers got good news: The state announced their license applications had been approved, posting their business names online.

Then they heard from their banks.

“I got a huge wave of calls because all of them got kicked out,” Peter Su, SVP of Green Check Verified, a software company that helps banks run cannabis programs, told Retail Brew. “Like 30 times, ‘Pete, I got kicked out of my bank because the state released the names.’”

Getting dropped by a bank is “sort of a rite of passage,” Lauren Rudick, managing principal at Rudick Law Group, a New York-based firm that provides legal services to cannabis companies, told us. “You’re not really in the cannabis industry until you lose at least one banking relationship.”

Just 10% of banks and 5% of credit unions provide banking services to cannabis businesses, according to Reuters.

But not all bankers reach for the 10-foot pole at the first whiff of cannabis. Some don’t just accept business from cannabis retail stores and their suppliers—they court it.

Branching out: Brett Rawls focuses on cannabis-related banking as head of correspondent and specialty banking at Valley Bank. He joined the bank about two and a half years ago and started working with its cannabis banking program a year later. It was about three years ago that Valley began to focus on cannabis, he said, and the initiative came from colleagues who usually tap the brakes, not the gas pedal: its risk department.

Keep reading here.—AAN

It might seem like a strange time for a retailer to be entering the metaverse. It might seem even stranger if that retailer is The Home Depot.

But that’s exactly what the home-improvement giant is doing, with an activation in Roblox that aims to recreate its in-person workshops for kids.

In a digital remake of the iconic brick-and-mortar store (parking lot, orange-clad associates, and hanging orange aisle signs included), players collect the materials needed to build a birdhouse, a planter box, or a car. All of the items, once completed, can then leave the Home Depot store and be used elsewhere in Roblox.

Briar Waterman, Home Depot’s head of creative, said the metaverse is actually a natural place for the retailer to be, particularly considering the behavior of its younger generations of shoppers, who find inspiration for home-improvement projects in new places.

“More and more of our consumers are growing up natively with digital,” Waterman said, “We see a lot of dreaming [and] aspiration happening in digital.”

A grand experiment

Waterman said his team keeps a close eye on emerging technology trends and how other retailers are using them, but isn’t concerned with being trailblazers.

The creative and strategy teams discussed metaverse and retail activations regularly in monthly meetings focused on innovation and changes to existing digital platforms, he explained. But it wasn’t until last year—when Home Depot brought its kids workshops, which had been held virtually during the pandemic, back into stores—that the team landed on a project idea.

“We did not want to be a digital convenience store,” Waterman said. “Once we figured out this idea of doing project-based building, that felt right.”

Keep reading here.—MA

“In north Brooklyn, the Van Leeuwen Ice Cream Factory combines ingredients like peanut butter and brownies, cherries and chocolate chips, and…parsley and garlic powder. Over the past few years, the ice-cream brand has made headlines for its unusual collaborations, the latest with Hidden Valley Ranch,” writes Marketing Brew’s Katie Hicks:

According to Ben Van Leeuwen, co-founder and CEO of Van Leeuwen Ice Cream, these collabs generate earned media for the brand, which doesn’t have a budget for paid advertising.

The “first big one” was Kraft Macaroni & Cheese, which, he said, approached Van Leeuwen and became the impetus for this collab-based strategy after their 2021 partnership generated more media buzz than expected. Other partners have included Grey Poupon, Netflix’s Glass Onion, and the Idaho Potato Commission.

Read the whole story here on Marketing Brew.

Today’s top retail reads.

Face off: Former Starbucks CEO Howard Schultz testified before the Senate Health, Education, Labor, and Pensions Committee, facing tough questions regarding allegations of union busting. Schultz denied it, saying Starbucks “has not broken the law” and will bargain in good faith with Starbucks stores that have voted to unionize. (NPR)

Next steps: With Macy’s CEO Jeff Gennette set to retire next year, industry experts believe this is an opportunity for the department store chain to modernize and reinvent itself. “Macy’s right now needs a new growth engine. The problem for the most part is Macy’s has a fleet of stores built for yesterday’s retail wars,” said Craig Johnson, president of Customer Growth Partners. (WWD)

What’s in store: Ryan Cohen took over Gamestop in 2021 and vowed to make the company an e-commerce powerhouse, but nearly two years later, the company is reversing course and embracing brick and mortar. (the Wall Street Journal)

The numbers you need to know.

Make all the avocado toast and cold brew jokes you want, but millennials will buy what they want to buy.

Almost 73% of Gen Yers said they plan to spend the same or more online in 2023, which would make them the leader in global e-commerce spending this year, according to a new study from ESW. It also found that more than 27% of millennial shoppers will spend “significantly more” online and less in store.

“Millennials’ spending power has grown to $2.5 trillion, and they are not yet even in their prime earning years,” Patrick Bousquet-Chavanne, president and CEO of ESW Americas, said in a statement. “They are spending more online than in-store across several categories, and these results indicate that brands must continue to evolve, improve, and optimize their e-commerce to attract and retain this increasingly powerful demographic.”

Most of the cohort’s spending will be on health and beauty, luxury, apparel, and electronics.

• Almost 50% more millennials will increase spending on health and beauty products compared to Gen Z, and 42% more than Gen X and baby boomers.
• The study also found 27% of millennials will spend more on luxury goods online in 2023, compared to 20% of Gen Z, 22% of Gen X, and 21% of baby boomers.
• Additionally, 77% more millennials will increase their online spending for apparel and footwear compared to boomers.

Catch up on the Retail Brew stories you may have missed.

• Retail supply chains are front-row seats for the impact of AI on jobs
• Retailers are relying on loss-prevention tech to curb shoplifting
• Retail buyers share their changing perspective on Expo West