PT 52 | Gathering Cannabis Business Data

 

In the midst of their busy day-to-day lives, many business owners encounter difficulty finding the time to really look at their business market and see what’s missing. Sometimes, it helps more to take your foot off the gas, relax for a while, and regain perspective on what’s really happening out there. In this episode, Tony Frischknecht flies solo to talk about the many sides to get business analytics without burying your head deep in your own business processes. He talks about gathering data from feedback and even camaraderie and then shares data from BDS Analytics about emerging markets and more. Keep your options open when gathering data. That way, you’ll grow your business even more.

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Keeping Your Options Open: On Gathering Data To Grow Your Cannabis Business

I am getting back to you with some pretty valuable information. This is something that as business owners, we have a very tough time making time for. The value of it is so great. We get caught up in our day-to-day and starting up the business. Back when I started up a few different companies, especially dispensary, you put in six months to a year where you are rapidly putting your structural pieces, hardware-type pieces together. You grow all your equipment. Dealing also with all your construction, a checklist you have to get done, not only on the growth side but then you have to go over to the dispensary side where you’ve got POS systems you’re installing. For those of you, POS is the Point Of Sales systems. It’s your registers, which track all your sales. I want to make sure I was clear on that.

When you’re in the thick of it for a good year and a half, depending on how big your company is, all of a sudden, you’re opening. You rushed open. Most of us do anyway because we are missing sales opportunities. We’ve got to start getting some income coming in to start paying for all this stuff that we just invested into. You’ve got that happening and that becomes your day-to-day is getting that machine running and starting to create sales. You’re doing that. Two years go by, and you’re tired from 24-months sprint. You start getting into the habit of, “What do I do next? I’m burnt out.” It’s easy to get burnt out when you’re in this industry. This isn’t in all industries, but I know from experience in this one.

Lastly, which a lot of us make the mistake of, I know I have, is we take our foot off the gas and say, “I need to relax for a while.” I want you to let you know it’s okay to stop and look at your business and say, “I’ve created something amazing work.” We’re making sales. Things are happening. However, there’s so much more. Understanding how to increase your margins also, coming up with stuff that sells in your stores. The hard part about this industry is that there’s very little data or analytics that are available out there to us as business owners, especially the new emerging markets, places like Massachusetts. Illinois would be another good one.

The information is so new that a lot of the time, you go take it with a grain of salt because there are issues with collecting the data consistently. Also understanding what you’re looking at because this does take some time, especially for you, store owners out there. How do I know what to buy? When to buy it? How much of it? This is a retail problem that’s happened for over 100 years in some places. Taking that and going, “I’ve got my business running, how do I start fine-tuning it?” Analytics is a great way to do it. For so long in Colorado, we didn’t have any of it. We have no nowhere. We have the storefront that talks to the customer and we listened to the customer. That’s how we got our information. That is a great ground level.

PT 52 | Gathering Cannabis Business Data

Gathering Cannabis Business Data: The hard part about the cannabis industry is that there’s very little data available out there to business owners, especially the new emerging markets.

 

Unfortunately, it doesn’t tell you what’s happening throughout the entire state. It’s nice to get some more feedback than from Customer A and Customer B. This also helps going back to a lot of what I’ve talked about, associations around other business owners and see what they’re selling. That’s always good when you’re having camaraderie, you’re having drinks or dinner. You can have these types of discussions where that’s how you can see what else is happening in the industry. For you, those that are in new states that are opening up, new regions, that is a very good place to start to try to gather some business concepts from other people. What they’re doing in their stores to see what sales and what’s happening.

In your Point of Sales system, you’re going to have the track all these sales, but you’re not always going to get verbal feedback from customers that aren’t going to say, “It wasn’t very good. I don’t like it.” You can see a spike in sales and then all of a sudden you buy it. The next month, nobody comes back to purchase a topical, concentrate, or whatever you may have. Understanding that there are so many sides to get analytics and collect them well. I want to share the company with you. I am going to share some data with you. The company that I’m sharing the data from is BDSA. It used to be BDS Analytics. They’ve been around since 2015 and they use a point of sale software called GreenEdge. This is tied directly into the store’s POS systems. It’s very accurate.

The accuracy I was told a long time ago also depends on the implementation or the gathering of the data that’s put into it. Like we saw in Colorado, the longer our program went on, the better our analytics became. I’m going to give you what I like to call analytic download. These are sales. Before I go too far into the data, we need to remember that for our audience, this has been an interesting time because this is coming out of the COVID-19 era or the lockdown. There’s some interesting data that you need to when you read this, keep this in mind, if you’re trying to match it up to the time frame that you’re in. One thing that you won’t see a few years later, you won’t see this data. You’ll be like, if you go back and look at old data and try to figure out what happened with years past, this might mess with you.

Colorado, we had record months, $191.1 million, up 32% from 2019. That’s incredible. Think of the year or the COVID side of this. I don’t have this data, but I’m sure alcohol is very much the same. I’m going to give you some numbers on a few of the different categories, but if you want more details, you can go to BDSA and check them out. You can read through your state. They’re not in every state, but they are in some of the older ones. It can give you an idea. If they’re not in your state, maybe you can review a state that’s close to you and balance out what could be coming? What may I look for in the future? You can project. At least have an idea of what is popular in your area.

As I read some of these, it was interesting to see that some products were dropping quite a bit over May in 2020. Flowers $115.4 million, up 38% from 2019. Concentrates $28.4 million down 2% from 2019. Ingestible $46.9 million up 8% from 2019. Topicals $3.1 million down 38% from 2019. We’ve got another topicals are down. Why is that? Maybe that’s worth digging into. I would suggest checking that out. The other interesting one concentrates. I know they have had lots of different supply issues in California due to the regulations changing on it. Maybe that’s something that is happening with supply. Maybe there was a big batch of concentrates. There’s a lot of people that test positive for pesticides. They had to get rid of them so they didn’t have any. That one seems strange to me. I would dig into that one if I was looking at some California data.

Let’s move on to Oregon, Oregon, $103 million seems fairly small because Oregon was right behind Colorado. There have been several setbacks over the last few years. One of the major mistakes that I feel hurt the program in Oregon was the licensed growers. They licensed out 400 growers’ licenses when they opened the program and then they didn’t have any stores to sell the product through. The licensed amount of stores was nothing. That happened for a couple of years, but according to BDSA, they have had a steady pace of growth over the last several months which is great. They’ve got some consistency. They got some balance.

With that said, I would look at your state, where you’re at, and make sure you’re not in the same imbalance that a state like Oregon had in their program. If you notice that now you can adjust, what’s great about checking out these other states and seeing where they’re at. Let’s get into some of the data here, flower $49.4 million up 121%. That’s huge. Concentrates, $27.2 million up 63% from 2019. Ingestibles $14 million up 59% from 2019. Topicals $800,000 down 11%. We’ve got three states that are down on topicals. That’s worth looking into if you’re a topicals maker.

Let’s go back to some of these high numbers. I brought up what they talked about consistently growing at a steady pace for nine months. Their numbers and their sales were so in disarray. This is where you’re seeing these big jumps. It’s good when you look at it on paper, but it’s also some info as a business owner, you have to look at like, is that true growth or is that because of the way the system was, the licensing program was fouled up, the steady growth for these business owners. I feel for those guys out there in Oregon. They’ve had a rough go at it. Massachusetts, this is my last one and then I’ll share some other states you guys can go check out if I didn’t name your state here.

Massachusetts $34.3 million, however, their governor came out at the end of March 2020, they were deemed non-essential on a four-week period. They had to shut off all adult use, which damaged them. However, they probably got right back into the swing of things. They’re very new in collecting data for BDSA. Their numbers came out to $34.3 million in total sales revenue for May. There’s no big change because there weren’t adults and medical use back in May of 2019. These are just numbers for the first month of sales that they have here. Flower $16.5 million, concentrate $18.2 million, ingestible $5.5 million, and topicals $170,000.

Keep your options open when you're out there trying to grow your business. You can't do that efficiently with just one set of information. Click To Tweet

There are a few other states. There’s Nevada, Illinois, Arizona. For more information and topic breakdown, some concentrates you’ve got live resin, raw resin, shatter, vape wax, ingestible, beverages, candies, chocolates. These are all these subtopics to the numbers that I gave to you. You can go dig if you want to dig deeper into some of those. I would suggest you go do that. If you’re interested in some in-depth business data that you can purchase through them too, I don’t own any of their company or anything like that, I’m telling you that they’re a good source of information.

With that said, when you’re investigating any kind of data out there, make sure you have a couple of different sources that you’re finding this stuff from. As an investor and a business owner, I know it’s easy to just stick to one thing and see what information you’re getting from there and trust that. However, it’s lazy. You need to keep your options open when you’re out there trying to grow your business. You can’t do that efficiently with just one set of information you’re gathering. You’re getting data from. Always keep that in mind and look for stuff that challenges the other information to give you an overall view of what you’re doing.

This has been my analytic download. I hope you enjoyed the show and use this for future stuff. I know this data is going to be outdated very soon, but the information that I hope that I was able to give, you can use through now and into the future of the growth of your business. Thanks again for joining me. I always cherish that I have some audience out there that are taking this to heart and using it because it means a lot to me. I try to give you my point of view, which I think is going to be helpful to you.

The last thing I say is please go check out PlantProblem.com and you can see all my episodes there. I know you don’t have a lot of time in your day, so whenever you get a chance to leave any type of comment or review on whatever Apple or Google Podcast or wherever, please leave me a review. I also want to thank you ahead of time for taking the time to do so because it’s how we create a lot of the information and we want to make it useful for you. Whenever you can do that, it’s always great. It was great being with you here. I look forward to seeing you next time. Thanks again.

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