Out with the Old: How CalEthos Is Giving Brands a Voice and Consumers an Educated Choice
March 3rd, 2020
App, Exclusive, News, Top Story
For a revolutionary movement, the cannabis industry still seems to have a lot of “same old, same old.” Cannabis brands increasingly must face many of the challenges that other CPG businesses have long confronted – including distribution, retail visibility, and consumer education – while complying with regulations that leave one hand tied behind their backs.
One common CPG hassle now emerging in the cannabis space is the rise of slotting fees. Slotting fees, paid by brands to guarantee shelf space and placement for their products in stores, have long been employed by supermarkets and other large retailers.
According to a recent article in Marijuana Business Daily, cannabis dispensary slotting fees can range from $500 to $15,000 a month per store, depending on the volume of sales in the store and the size of the space reserved. It’s a significant expense. But as product makers struggle to differentiate their brands and create loyal customers in crowded, confusing dispensary environments, they’re handing over big sums to gain small advantages.
A new dispensary concept in Southern California isn’t satisfied with this status quo. In a market flooded by sameness, CalEthos (OTC-Pink: BUUZ) is offering brands and consumers a new and better experience.
The company’s SHOWCASE stores will offer brands their own store-within-the-store boutique, shared kiosk, or area in a product section featuring all of a brand’s product line and staffed by a dedicated and knowledgeable salesperson. Rather than just guaranteeing some amount of shelf space, this model gives participating brands a true platform to showcase their products, engage directly with consumers, and develop loyal followings.
Stores-Within-A-Store vs. Shelf Space
In developing the model for the SHOWCASE stores, CalEthos did a bit of talking and a lot of listening. They investigated in depth the issues facing product manufacturers. Because of regulatory and financial constraints, most brands are unable to create their own retail outlets. They are at the mercy of licensed dispensaries, many of which lack adequate space to properly display the wide variety of products they carry. What’s more, they are often understaffed, or not staffed to a level that allows for in-depth consultation and education about specific brands or products.
With cannabis so new to the general consumer population, more interaction would be ideal to help a customer decide how to choose from the myriad of product choices, and even product categories. Vape vs. smoking? Edibles, oils, tinctures? What product might help with relaxation, or sleep, or provide pain relief? CalEthos learned that neither brands nor consumers were being well-served by the current setup in many dispensaries. This is especially true for those CalEthos calls the “canna-curious” — potential customers who lack extensive experience with cannabis and may be intimidated by traditional marijuana culture.
In response, CalEthos designed a concept to elevate cannabis retail to a new level, starting in the largest and most trend-setting legal cannabis market in the world, Southern California. CalEthos’s SHOWCASE stores will feature a large-format, department store-style footprint. The space will be anchored by in-store boutiques dedicated to major brands and staffed by brand-specific representatives. Each boutique measures 10’ x 16’ and includes 90’ of shelf space. Imagine the Clinique counter at a Neiman Marcus, where consumers experience the full range of products and get advice from a dedicated, on-brand salesperson. Gone is the cramped competition for a little shelf space, replaced by the best possible display and direct customer engagement a cannabis brand can get in the Southern California market today.
If a brand isn’t ready for its own boutique, it can subscribe to a smaller display area of 18’ to 21’ of shelf space in one of SHOWCASE’s specialty sections defined by product type – like flower, vape, concentrates, CBD, and more. Each store will also feature Chill Zone section dedicated to edible and beverage products, with refrigerated floor and wall coolers that are used for both brand display and inventory storage.
Beyond this innovative retail experience, SHOWCASE stores are also designed to engage and educate consumers in a way no corner dispensary or illicit seller can. With a world-class event center integrated into each location, brand partners can participate in daily educational and promotional events, with access to full production and streaming capabilities. The stores will also offer an in-store pharmacy with certified cannabis pharmacists available for consultation and advice on medicinal remedies and medical cannabis treatments.
It’s a ground-breaking model in an market dominated by copycats – a model created to deliver an expanded customer base and substantial foot traffic for brand partners, an elevated experience for consumers, and significant recurring non-retail revenue for CalEthos.
In short, the SHOWCASE concept is designed to facilitate successful brand building and give consumers the space to explore, learn, and make their own unique, educated cannabis choices. No “same old, same old” here.
Interested in Investing?
CalEthos is currently financing its initial SHOWCASE location planned for Santa Ana, California. The building and licenses are secured, and the retrofit of the facility is poised to begin. If you are interested in finding out more about this investment opportunity, please click on any of the links below to get in touch with the CalEthos Team.
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