How Cannabis Retailers Establish Relationships with Licensed Producers

Keeping up-to-date with and developing connections with suppliers is essential to any cannabis retailer’s success. This article will provide tips and insights for store operators as it pertains to working with Licensed Producers and brand sales agencies.

Picking Your Partners

Cannabis retail stores must choose their product and brand selection wisely. This all begins with understanding your current and/or target customer and working backward. Certain demographics will want certain types of products. Asking your customers questions and conducting consumer research will help you determine if you should be stocking dried flower, pre-rolls, concentrates, edibles, topicals, beverages, and/or vaporizers.

Once you determine what types of products you should be stocking, get familiar with all of the brands available on the market. Brand research can be done by browsing your provincial retailer website along with visiting the brand’s websites and social media pages to investigate further. Pick partners with products and values that coincide with your brand and that will deeply resonate with your chosen consumer segment.

Source: The OCS

Licensed Producers vs Sales Agencies

When developing relationships with the companies whose products you will be carrying, you will either deal with representatives that work inside of Licensed Producers or individuals employed at sales agencies that represent several different brands.

Examples of sales agencies that represent several brands include Humble + Fume, Green Hedge, Cannavolve, and Kindred. Even the Licensed Producers who are represented by these agencies will frequently have internal employees who also will reach out to and establish relationships with key accounts and retailers.

It is important to understand which agencies represent which brands so you know who to reach out to for information and support.

Information and Support

Information and Sales Collateral: LPs and Agencies provide retail stores with key selling points and additional information such as Certificates of Analysis. Many brands will also provide visual merchandising and/or sales materials that can be displayed in-store or be used to train employees. LPs and sales agencies will frequently offer education sessions to further inform budtenders about their offerings, both in-store and online.

New products: Since most cannabis retailers have access to the same products through the provincial boards, it is important to know when products become available and sell out. In-demand items like high THC flower and pre-rolls and exciting new product formats will typically be limited to one case and/or sell out quickly. Having good relationships and open communication with LPs and brand reps gives cannabis retail operators an early mover advantage because they are typically notified of new and exciting products before they drop. Some reps will even find creative ways to allow retail store operators and employees to sample products before or as soon as they are released. For example, some edible brands will drop off non-infused versions of their edibles for budtenders to try and become familiar with before they are available on the market.

Returns and Customer Support: Customer complaints and product returns are an unfortunate reality for any cannabis retail business, especially when it comes to “2.0” products such as vaporizers. Having positive relationships with the brands you carry is beneficial because they will frequently reimburse stores for returned or faulty products. Some brands will even pay to help move inventory on unwanted and discounted offerings.

Merchandise and Display Packaging

There are strict regulations and requirements for legal cannabis packaging in Canada. This means no flashy, eye-attracting, colourful bags or boxes for your customers. However, the regulations do allow for mock packaging to be displayed in-store, creating a more dynamic and engaging shopping experience. Cannabis stores are also permitted to display educational, informational, and entertaining materials from brands on their shelves. They can also give out branded “swag” and merchandise like clothing and smoking accessories. Many smaller retailers do not have the time or knowledge to obtain these materials from each brand, but recently a few tools have launched to streamline this process.

one2one is one such example, a website that connects retailers and LPs/Brands, simplifying the way product information and promotional items get in-store. The platform allows LP sales reps to send marketing materials directly to stores across the country with a click of a mouse, while at the same time empowering retailers to order exactly what they need from their favourite brands all in one centralized location. one2one also gives retailers a direct line to LPs, allowing them to message their sales rep with questions or request/schedule a visit and find the physical or digital marketing collateral they need to support their staff in-store. one2one also gives retailers a direct line to LPs, allowing them to message their sales rep with questions or request a visit and find the physical or digital marketing collateral they need to support their staff in-store.

Installations and Marketing Activations

Some cannabis retail stores will choose to collaborate with brands on permanent and semi-permanent physical installations. These can range from small branded sculptures that sit on shelves to wall posters to full display cases. Your chosen consumer segment and your brand ethos should determine how many branded materials you should display in-store if any at all.

Social Media & Email Newsletters

One effective way to stay on top of new product and brand releases is to follow and engage with both LPs and agencies on social media. The main platforms that these companies are active on are Twitter and Instagram. Many will post valuable product information and launch dates for you and your budtenders. These brands and agencies also frequently publish retailer-focused newsletters with exclusive information and timelines.

Collaborating for the Betterment of the Industry

Erik Fonseca, VP of Sales of the Detonate Group (a successful print and design company that works with many large LPs) explains that this relationship between brands and retailers is important for the improvement of both sides and the industry as a whole.

”Retailers are on the front lines, talking to end-consumers all day, every day. They’re truly in the trenches, in a way that LPs/Brands cannot be. It’s thus crucial for cultivators to hear from retailers as much as possible, to gain insights regarding product preferences and trends, and to learn how consumers are enjoying their products (or not enjoying them…). In short, LPs can only get better by communicating with retailers as frequently as possible.
From a retailer perspective, passing along this valuable information to LPs/Brands may help lead to improving the quality of the products they carry - which should be a key goal for any retailer. Furthermore, by keeping in contact with LPs/Brands, retailers are able to hear about upcoming releases that their customers may be interested in.
Erik Fonseca

Canadian Cannabis Retail Marketing Guide

Over the next few months, when it comes to creating original content, we’ll be focusing on the fastest-growing segment of the Canadian cannabis industry, retailers.

This series of articles is dedicated to informing and educating Canadian cannabis retail store operators about marketing, promotions, branding, partnerships, and product selection.