CANNABIS

Can do

Thirty-seven states so far have legalized medical cannabis in some manner—and Connecticut, New Mexico, New York, and Virginia were the latest to okay recreational cannabis (for adults) in 2020 and 2021. That means more growth opportunities for dispensaries. And a host of new restrictions to maneuver opening up shop.

One of the toughest, cannabis companies told Retail Brew, is zoning—which varies by state and even by municipality. 

Proximity to schools, day cares, and churches is strictly controlled, explained Julie Winters, director of operations for Ayr Wellness, which handles everything from growing to selling cannabis. And it’s a lot of back and forth with different agencies, she added, to make sure their stores are in high-traffic areas that are easy to get to. 

“Eight to 10 years ago, what we used to be up against is [being put] in back alleys and saying, ‘This is where you can be,’” Winters said. “That’s difficult when you’re already dealing with the stigma of cannabis.”

A thing of the past: While malls now are signaling more openness to dispensaries, a lot of today’s legislation is predicated on how states approached the medical market, Frank Perullo, chief strategy officer of Ascend Wellness Holdings (AWH), told us. 

Perullo, for his part, actually prefers places with tighter restrictions, drawing up a comparison between Colorado and Massachusetts. In the former, he said, the state had “most of the power in licensing,” which led to a flood of shops on top of one another. 

“We look to put our money into states where there are limited licenses and go really deep, not wide,” Perullo said. “We don’t try to plant a flag in lots of stuff.”

Cultivate the market

Ayr, which operates 60+ dispensaries across the US, is thinking more about getting in on the ground game. This year, it’s prioritizing growth efforts in Pennsylvania (it’s already opened three shops, as has two more in the pipeline), where only medical cannabis is legal.

Winters told us it could take anywhere from six months to a year to obtain a license in their state—depending on what businesses are looking to do. It costs $5,000 just to apply to open up a dispensary, and then $30,000 for each location if approved.

• Those prices shoot up to $10,000 and $200,000, respectively, for growers/processors. 

Besides the $$$, Winters said companies have to spend time connecting with locals—and debunking misconceptions. 

But: “Once people see how successful [cannabis] is and how it operates...you start to see the towns and the cities and the states really adopt it and say, ‘This makes sense for our communities.’”

Click here to read more about how cannabis companies are navigating the budding retail market.—KM

FUNDING

Get real

The boom in luxury resale comes with an expensive problem: fighting fakes. Grailed, a menswear-focused marketplace, just raised $60 million in funding to do, in part, just that.  

• The Series B round was led by Goat Group, the sneaker resale giant; Gucci’s CEO and Groupe Artémis, the Pinault family's investment vehicle, also joined. 
• Grailed now has 7 million users and more than 3 million product listings.

Remote control: CEO Arun Gupta told Retail Brew that counterfeits account for less than 0.5% of Grailed’s transactions. (Its community-driven platform runs the gamut from an $18,000 Saint Laurent suit to a $90 Off-White t-shirt.)

But while many resale companies use some sort of physical space to authenticate goods, Grailed’s process is fully digital—one that it aims to advance with the new capital. 

• It currently uses a mix of machine learning and a “decentralized” network of moderators with expertise in key categories and brands.

“Because we do that, we reduce carbon emissions, and we do it so much more cost effectively,” Gupta said. “I can sell you a $400 item, and I make money, the seller makes money, and the buyer’s really happy.”

The big picture: Digital authentication has gained traction over the past few years—Goat and Fashionphile have dipped their toes in the tech—as resale companies look to compete in the saturated space. Japan’s Mercari even introduced its own remote authentication service that verifies products within 48 hours.

+1: Tradesy, another luxury resale marketplace, also announced $67 million in fresh funding yesterday.—JS

SPONSORED BY PAYCOM

You’ll This Payroll Tech

Here are some simple truths: Everyone wants to get paid. Everyone wants the payroll process to be easy and error-free. And there is a new solution that can accomplish both of those things, like, now.

Beti is Paycom’s industry-first, employee-driven payroll experience that helps improve accuracy, reduce employer liability, lowers direct deposit reversals, and more.

You can finally put payroll in the hands of your employees, so your company’s HR heroes can focus on bigger, more strategic initiatives.

One company that uses Beti has cut the time required to do payroll by about 50%. Needless to say, they won’t be going back to the old, tedious, time-consuming, error-prone way.

If for some reason, you need one more reason to advocate making the switch to Beti, we got you: Beti was named a Top HR Product of 2021 by Human Resources Executive magazine. 

If your payroll process hasn’t won an award, you have no choice but to click here.

STRATEGY

Members only

Walmart+ made its debut late last year, and its momentum has only been ramping up.

A new survey published by Deutsche Bank estimates that Walmart+ now reaches approximately 32 million US households. In June and July, about 25% of respondents identified as Walmart+ members, up from 19% in prior months. (Walmart did not respond to a request for comment.)

In with the new: “It’s a big deal for [Walmart] because historically they’ve not wanted to invest in loyalty programs. This was a huge departure,” Sucharita Kodali, principal analyst at Forrester, told Retail Brew.

“This speaks to the fact that sometimes you have to throw old orthodoxies out the window because they’re not relevant or they’re untrue...maybe it’s a culture of experimentation and change for Walmart that they probably had been less inclined to execute for a long time.”

Zoom out: Walmart and Amazon are competing for similar shoppers: 57% of survey respondents identified as Amazon Prime members (which are estimated to number ~150 million across the US).

• Roughly 86% of surveyed Walmart+ subscribers also have Amazon Prime.

That puts the pressure on big-box players. “If a significant part of your customer base is now in a paid loyalty program, you’re just further down on the list,” Kodali said.—JG

WHAT ELSE IS BREWING

• HelloFresh workers in the US are unionizing, Vice reported.
• US retail sales increased 0.7% in August, despite the Delta variant. 
• UK retail sales, on the other hand, dropped 0.9% following supply-chain disruptions.
• Walmart teamed up with Ford to test self-driving delivery service.
• Asos will link management pay to meeting its ESG goals. 

FROM THE CREW

Ever walk down a grocery store aisle wondering, “How did this product come to be? Do we really need peanut butter and jelly in ONE jar?” 

Well, CPG marketers think about this often.

Register to join our event on September 28 at 12pm ET, where we’ll dig into the lifecycle of a consumer packaged good product—from consumer insights that drive the idea to the packaging, distribution, and marketing of that product.

Sign up now to get the scoop on how seemingly random products make their way onto shelves near you.

SWAPPING SKUS

Today’s top retail reads. 

Instant gratification: Why retailers see buy now, pay later as a winning strategy. (the Wall Street Journal)

Licking wounds: Broadly speaking, retail has recovered from its pandemic hit. But there are a few companies that are more vulnerable than they were 18 months ago.(Retail Dive)

Pedal to the metal: Peloton is the presumed titan of at-home fitness. Apple looks to have something to say about that. (Fast Company)

ICYMI

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

• It’s good hair days ahead for Mielle Organics
• The cannabis beverage market is bubbling with brands
• Make room: Retail real estate heats up in Austin

FRIEND OR FAUX?

Three of the stories below are real...and one is most definitely not. Can you spot the fake? 

1. Starbucks Korea created sustainable insulated mittens for holding hot coffee.
2. For Cup Noodles’ 50th birthday, the ramen company is rolling out soup-flavored soda. 
3. LaCroix teased a limited-edition pumpkin spice seltzer.
4. Fireball is releasing a keg that holds five liters of whisky.

Keep reading for the answer.

FRIEND OR FAUX? ANSWER

LaCroix is not hopping on the pumpkin bandwagon. Bud Light beat them to it!