The Candid Voice in Retail Technology: Objective Insights, Pragmatic Advice

Marijuana And Hemp Are Now Part Of The Retail Landscape - And They Need Tech


Until now, RSR has consciously avoided any discussion of marijuana in retail. Even though it’s legal, at least with a medical prescription in 33 states, it still bears more than a small stigma. Small like – the Federal Government still considers it a Schedule 1 narcotic, with no medicinal value, and thousands of people are still incarcerated for marijuana-related offenses.

But even with that stigma, we can’t avoid the topic anymore. Simply put, Federal law or no Federal law, pot and its derivatives are going mainstream – there is vast amounts of legitimate money to be made - and technology is required across the entire value chain.

I’ve been pitched by at least one company that has developed an end-to-end system for dispensaries, and recently received a text from a former client who has gone to work for another company planning to do the same. In his case, the company is extending across the supply chain. I did request a briefing when he’s ready. But still, even though medical marijuana (at minimum) is legal in every state where RSR has a presence, I still felt a little giggly about it all.

Shortly after that text exchange, Vitamin Shoppe CIO Andy Laudato showed a photograph of one of his stores, now selling a variety of products that have CBD as their active ingredient. Yes, the CBD is derived from hemp, not from marijuana, but it’s still pretty new to the market. And it really does raise the question: where did that hemp come from?

If ever a product begged for track and trace technologies, it is marijuana and hemp. Hemp grows wild in the Midwest. You can see its distinctive five-leaf patterns on the sides of the roads as you drive along. It makes me wonder: how do customers know if they are getting cultivars or roadkill? This seems like a silly question, but efficiency and due diligence require an answer. Currently, products have a batch number on the outer package, but how efficient was the process that got those numbers on the box? And what happens if there is a recall? People don’t tend to save boxes.

As the number of legal cannabis-based product categories continue to grow (in Florida it’s moved from oils only, to oils and flowers, and soon will have edibles on the menu as well), the need to understand the source of the products consumers are buying becomes ever more important. There hasn’t been a recall yet, but with the recent buzz around vaporizer health issues, expect one to be coming soon. Then what?

So what are the technologies that should be a priority for companies selling marijuana and hemp?

  • 1)Track and trace: This might be the most important technology for the industry. The market has a real desire for organics, and just like with more traditional farmed products, there are people and growers who might not be completely truthful about how “organic” organic really is. And often, it’s really a good idea to trace a product all the way back to its seed stock. Strains might get mislabeled, and it’s really important for users to know what they are getting.
  • 2)Tender and cash management: The disparity between state and Federal laws make marijuana predominantly a cash business. I honestly have no idea what dispensaries do with the cash they bring in (besides put it into Bitcoin), but the question remains: How do these retailers ensure that their employees aren’t stealing from them?
  • 3)Content management: Everyone wants to know what the heck they are putting in or on their bodies. The current industry leader for marijuana information is website called Leafly. The company breaks down each strain in a fashion akin to the periodic table, helping users determine effects, medical uses and negatives, as enormous differences can be found within a single strain. For example, Leafly classifies one popular strain as a hybrid, while Florida dispensary Liberty Health Sciences classifies it as a sativa. Shouldn’t this information be as localized as the seed stock has become?
  • 4)Ratings and Reviews: Certainly both Leafly and Weedmaps (another increasingly popular site) rate their strains, but again, one has to scour the reviews by state to get a sense of what’s available nearby. And when it comes to CBD-based products, absent any kind of Federal testing system, we absolutely need some sense of a) what they are supposed to be good for and b) the percentage of people they actually help.

For example, as I recovered from knee replacement surgery, my surgeon suggested I try CBD cream or edibles for the pain. Apparently it helps some percentage of patients. I am outside that percentage. I tried various delivery mechanisms from oils to creams, both hemp and marijuana-based, and each of them did nothing more than make me slightly nauseous. This begs the question: what percentage of people DOES it help? I get better information on Comfort Zone for my cats (a pheromone-like substance which seems to help around 70% of cats calm down) than I do about CBD. It’s considered a panacea by some people but by me - useless for most everything. I am really happy it helps children with seizure disorders: that seems pretty well-documented. The rest? I have no idea at all.

So, long story short, we’re going to start taking a look at this new retail product over the coming years. It’s already considered a nutraceutical and eventually will likely be considered a sub-set of pharma. Knowing today’s consumers, they’re going to want to know a lot about what they’re buying. This is a class of products that’s begging for technology, and it will be kind of fun to know how technologists are rising to the challenge.


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Articles & Opinions August 27, 2019
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