6 Months /
OVERVIEW
In June 2020, the owners asked Rapid to design, build, and operate a new retail entry to the California adult-use cannabis market. High Times, a publishing and events company, had just acquired three stores and had licenses to open another nine new stores.
The summer of 2020 was the height of the COVID-19 lockdown. Yet, our store design, staffing and training, assortment plan, loyalty launch, and promotional calendar were ready by January 2021. Shortly after that, the first of several new stores opened, and the remodels were completed. The average remodel cost was just $110,000, and by the end of 2021, the remodeled stores were sustaining a 30% sales lift versus trend, split evenly between transaction growth and transaction size.
STORY
Step 1 – Our core team had previously worked with The Source, a Nevada Cannabis retailer. Between our time with The Source and High Times, we visited over 150 cannabis stores in the US across Oregon, Washington, Colorado, Nevada, California, Arizona, Michigan, Massachusetts, and Florida. We understood that, without exception, operators needed more experience and understanding of consumers or what they wanted.
Step 2 – Most “dispensaries” had an unfriendly and time-consuming check-in process. Ours took 20 seconds.
While the industry standard was product cases and budtenders, we chose an open-sell environment, not unlike Whole Foods or Sheets, where customers were free to explore and shop, and help was available but only when the customer wanted it. Customers, much like in a food or convenience store, gathered their desired items, often in a basket, and proceeded to the register for checkout. We distorted our staffing to the checkout process, which averaged only 1 minute. Compared to competitors, we were ringing up 43% larger transactions, with 80% of our customers in and out in under 5 minutes. While competitors were building confusing and often overdesigned cannabis palaces, we saw that this product carried average retail closer to a convenience store than an Apple store, and we focused our energy on making the experience fast and easy.
Step 3 –Measure everything. Leveraging decades of experience analyzing large complex businesses, we quickly built actionable reporting and KPIs despite a light systems architecture of QuickBooks and a crude cannabis point of sale system. We fostered business acumen across the team, bridging observation to analysis, insights, and then to action.
We built a forward-looking promotional calendar more than a year out that was shared with vendors so that they could compete for position on key promotions, generally offering free products.
We hired store leaders based on business acumen and retail experience, deliberately not product expertise; because we built an easy self-serve concept, we could focus the team on business acumen, which is still rare in the cannabis industry. We understand that the trickiest part of cannabis versus conventional retail is compliance, which team members can quickly learn with the proper process support.
RESULTS
When we completed our assignment with High Times in January 2022, the stores were trending above the market, with excellent margins and labor costs, strong Google reviews, and a high level of remarkability with new and existing customers.