Five Pointers for Successfully Navigating the CBD World
Renee Covino, Convenience Store News
NATIONAL REPORT — Should c-store now stand for cannabidiol store?
Not quite, but more convenience stores have made the jump into the CBD category, and those that have already been in it are expanding and refining their sets.
For those convenience channel retailers seriously considering entry into the CBD category, industry experts shared with Convenience Store News the following five pointers:
1. Get a Reputable Partner, Preferably a Local One
The CBD movement began in the natural channel with discerning retailers who were committed to learning and educating their consumers. The convenience channel is not on that level — at least not yet — so chains need the help of at least one partnering CBD manufacturer to build trust in a category where consumers have a lot of questions.
CV Sciences Inc. CEO Joe Dowling suggests c-store operators offer in-store educational material for both staff and consumers “in order to build trust and loyalty by teaching consumers about the benefits of CBD, how to find products that work for them, and how to use these products safely.”
Based in San Diego, CV Sciences has been selling CBD products for nearly a decade, but just recently launched its Happy Lane line specifically aimed at the convenience channel.
2. Ask Suppliers the Tough Questions Upfront
No matter the CBD manufacturer chosen — either to partner with or buy from — the tough questions need to be asked upfront. Are you fully insured? Do you take product back? Do you have a certificate of analysis? And those are just the ice breakers.
Retailers looking to be taken seriously in the CBD space should “heavily vet” the brands they carry, advised Derek Thomas, vice president of business development for Veritas Farms. Based in Fort Lauderdale, Fla., the company manufactures a core-product CBD line, as well as specialized Veritas Pet and Veritas Beauty lines.
“They should have a transparent supply chain, no structure-function claims in their marketing, full-panel COAs [certificate of analysis] that are performed by a third-party ISO-certified lab and are correlated to the lot number of the product, a 360-degree marketing plan to move product off the shelves, and the ability to act as a partner to you while you navigate and learn the category,” he said.
3. Keep Items Affordable
C-stores are a great fit for CBD items with lower price points that are not often available at other retailers, notes Thomas. Furthermore, “the franchise model of many c-stores allows them some autonomy in their CBD selections, allowing for items that may not be available in other chain retailers, like tinctures and gummies,” he said.
Convenience stores should offer low-cost, entry-level products to enable trial for new users and current users curious about new-product formats, added Mike Luce, president and cofounder of High Yield Insights, a data-driven research company focused on the cannabis/CBD market. “For example, a CBD-infused sparkling water is a much more approachable option from a price-point perspective than a cream or a bottle of capsules for the c-store consumer,” he explained.
4. Segregate the Category
Last year, Duxbury, Mass.-based VERC Enterprises opened its first CBD Wellness Store inside one of its existing convenience stores in Plymouth, Mass. The store-within-a-store concept is the first of its kind in the region, according to the operator of 34 c-stores in Massachusetts and southern New Hampshire. In partnership with Ceres Natural Remedies of Vermont, the CBD Wellness Store offers extensive educational opportunities on CBD health benefits.
“Working with Ceres, we bring lab-tested, handcrafted CBD products for everyone’s budget and needs. Our team believes strongly in educating our customers as to which products and solutions are best for you, your loved ones, and even your pets,” the retailer says on its website.
While it doesn’t have to be a store-within-a-store as VERC has done, CBD industry insiders agree that there should be a carved-out CBD section in the c-store if the retailer wants to be taken seriously in the category.
“Placement is one of the most important things for successful sales in convenience stores because customers do not assume it is there,” said Andy Rodosevich, CEO and cofounder of Hemp Depot, one of the largest wholesale providers of hemp CBD oil products, seed and clones. “A separate section legitimizes the store as a place of purchase.”
5. Educate & Incentivize
There’s little consensus among consumers on where to go for information about CBD products, according High Yield Insights research. So, Luce advises c-store operators to “up the understanding of CBD” across all of their frontline staff.
The most efficient means might be to map the CBD products in-store against the different segments of shoppers. “Staff can be armed with a short list of product recommendations based on the demographics and questions of shoppers seeking information,” Luce told Convenience Store News.
Keeping in mind that a lot of c-store customers will be first-time CBD purchasers, Hemp Depot’s Rodosevich believes retailers should not only arm their staff with information, but also incentivize them to support the category.
“Even if customers have already made the mental decision that they want to purchase a CBD product, they’re typically going to have questions like, how much should I take? Is this a good brand? Is there testing with this brand? So, anything that can be done to help cashiers be knowledgeable — even incentives to develop that knowledge — is huge,” Rodosevich said. “Retailers that can incentivize and motivate their team to go the extra mile with knowledge and customer service stand to be very successful with CBD sales."