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Growth in the Industry Inspires Innovative Business Practices

The logo for WeGrow, the first company to openly cater to marijuana growers.

Economics

Growth in the Industry Inspires Innovative Business Practices

The cannabis industry is poised to grow 64 percent to $2.34 billion nationwide by the end of this year — according to research by ArcView  — and if other states continue the push toward pot legalization, the industry could reach $10.2 billion in the next five years. In light of these projections, many businesses and entrepreneurs are capitalizing on the opportunity to become an staple in the cannabis consumer community.

The franchised weGrow was the first business of its kind to openly cater to medical marijuana cultivators, though it doesn’t sell the plant itself at its retail store. The company offers garden projects alongside grow tips and has been called the “Walmart of Weed.” Wegrow has locations in California and Arizona with plans to expand into Colorado, Michigan and New Jersey soon. The question of whether or not casual retail locations like weGrow will be able to sell cannabis in the future lingers.

Though a place like weGrow, which sells a little bit of everything in the cannabis category, is similar to Walmart and other one-stop shops like Target in terms of its concept, research analyst Jeff Green was reported saying that he doesn’t think it is comparable in terms of size. At least not yet.

“Even if they were to add marijuana, once it becomes legalized in the California stores, they’re still only carving out maybe 5,000 square feet,” he said of weGrow. “A typical Walmart is 120,000 square feet, because it sells so many different things.”

What business often comes down to is not size, though. Most successful companies are that way because they listen to their customers. Green said by having a frequent shopper system that records all of an individual’s purchase history, likes and dislikes, the recreational marijuana industry will be able to market their product effectively.

Providing useful services is also a crucial aspect of adjusting to the blossoming cannabis industry. The delivery method — where dispensaries or sellers bring bud to consumers’ homes — doesn’t only target today’s generation and practices in general, it hits what most stoners are looking for right on the head — convenience. Cannabis delivery services have nearly tripled nationwide over the last three years, from 877 to more than 2,600 today. However, the delivery approach is not universally allowed. For example, California allows individual counties to decide for themselves whether or not cannabis delivery is legal or not and in Seattle it is illegal.

As the industry matures, new products, ideas and services that make the cannabis consumer’s life easier are going to continue to emerge. Because of its increasing legality around the world — which is producing quite a bit of revenue — medical marijuana dispensaries in Colorado, and many other places, are understandably investigating ways to optimize their participation in this now-permissible, recreational weed market.

What other changes do you see happening in the industry? Tell us in the comments.

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