Legal pot is big business. According to a study cited in a Washington Post article, cannabis could generate $35 billion by 2020 if legalized at the federal level, making the legal pot sector three times bigger than the NFL. But for all its revenue potential and startup cachet, the legal marijuana industry remains at a unique disadvantage because it is still coming out of the shadows, selling a product that was a black market commodity until fairly recently.
Though the consensus for mainstreaming pot is growing and it is now legal in many states, impressions linger and may prevent marijuana entrepreneurs from embracing the business tools that drive revenue in other sectors. As pot becomes legal as a medicinal and/or recreational substance on a state-by-state basis, industries spring up around the new opportunity, but the level of technological sophistication still lags at many operations. This keeps companies from fully capitalizing on modern business solutions, including data-driven analytics, inventory management and remarketing strategies.
One challenge that illustrates the gap is the disconnect between manufacturers and retailers. In the marijuana sector, growers still typically cultivate products based on their own knowledge and preferences with little or no insight into market trends. The application of big data could provide incredibly useful insights that could help growers refine products, just as customer feedback drives production strategy changes in other industries.
On the retail side in the legal marijuana sector, dispensary clubs in states that allow medicinal or recreational marijuana use typically have information on their clients, but this valuable data is too often stored in filing cabinets rather than in a cloud-based data repository. As a result, the data isn’t analyzed to identify customer preferences and optimize sales. Retailers don’t engage in remarketing and retargeting efforts that other industries use to drive more sales.
Today, legal marijuana retailers often neglect to track which products customers order the most often, so they are unprepared to create custom offers and incentives to retain customers. Too many retailers also fail to track the sources of customer acquisitions, which leaves them unable to allocate marketing resources effectively.
Retailers may assume that customers come from pot-focused sources like lifestyle websites and magazines. However, they are far more likely to get customers from local Google searches and review platforms like Yelp. Knowing the true sources of customer acquisition could help legal pot sellers divert marketing dollars away from unproductive revenue sources and invest in marketing initiatives that generate ROI instead.
Customer feedback is another standard in virtually every other industry that has yet to make significant inroads in the legal marijuana sector. Product manufacturers typically solicit feedback and use the data generated to refine features and build customer loyalty, but this practice is almost unheard of in the legal pot sector. This means legal marijuana sellers are missing golden opportunities to continuously improve.
In a relatively short period of time, big data has become a key strategic resource for businesses of all types, helping companies grow demand, manage inventory, drive customer loyalty and improve products to meet emerging needs. It could fulfill all of these roles and more in the legal marijuana industry too, and tech innovators have put platforms in place to gather, process and apply data. Now it’s up to the budding marijuana industry to come out of the shadows and fully embrace the possibilities of big data.
Contributed by Eddie Miller, CEO of eCann, Inc. and Invest in Cannabis. Miller sets the company’s strategic direction, as well as identifies and capitalizes on new opportunities across the cannabis sector — the fastest-growing industry in the US. A successful entrepreneur since high school, Miller operates over 17,000 domains under WeSell.com.
Sign up for the free insideBIGDATA newsletter.
Speak Your Mind