Interview with Renata Serban, CPA (& more!)

Fall Season. Back to School.
Back to Business.

The Fall season is just starting, students are back at school, and businesses are shoring up their planning.

In this Newsletter we feature Renata Serban, with a brief follow-up conversation from her podcast earlier this week.*

Renata Serban, a Certified Public Accountant and Certified Management Accountant is an award-winning cannabis accountant and Founder/CEO of Highly Elevated CPA. Renata has a wide-ranging background in many disciplines, including chemical engineering and finance, making her eminently qualified to advise cannabis entrepreneurs and guide their businesses forward. 
Renata Serban, CPA
Q: CWCBExpo – You moderated a session at our conference in New York this past June.* It was about how technology can impact a cannabis business. You have a technical background which made you the perfect moderator for the session, “High Tech: How Technology Can Drive Your Business.”  You hold an engineering degree, you are a CPA, and you founded your own firm – Highly Elevated CPA – where you are an advisor, CPA tax specialist, and compliance expert to cannabis business owners.

With such a background and experience, when you advise new and existing entrepreneurs, how do you recommend they plan their finances for profitability, growth, and compliance while capital may be scarce?

A: Renata – My overall recommendation, and many business people will agree with me, is that before you start a business you need a business plan. For some reason, many start-up cannabis operators are ignoring it.

During the process of development of the business plan an entrepreneur will identify and analyze many aspects of business operations. For example, if it’s cultivation, what is the size of the lot or area where the plants will be grown, how many harvests will be during a year, what is the selling price per pound, how many employees are needed, what is the cost of build out, what are the other costs needed for getting the product ready for sale, who are the competitors, who are the potential partners?

When going through all of these thoughts an entrepreneur can have a much better idea how much funding is needed, what compliance is necessary since a business plan has to be tailored to cannabis regulations, and estimate potential growth by predicting how the market will move with time.

Scarce capital is always an issue not just for cannabis operators but for many other industries. Yes, there are more loans available for non-cannabis industries but many banks prefer operational businesses and very often the start-up non-cannabis businesses also struggle with capital raise.

Having a solid business plan with detailed financial projections is a must for any capital raise. Strong consideration also has to be given to strategic partnerships with other businesses.

“My overall recommendation is that before you start a business you need a business plan. For some reason many start-up cannabis operators are ignoring it.”

Once the company becomes operational, the profitability, growth and compliance is really driven by staying on top of the operations. I’m frequently seeing that some business owners in their first months of operations are over-hiring and over-ordering products. I always recommend starting lean with a smaller team and then gradually grow as needed. The same with products, start with small inventory, see how it goes and then increase purchases as needed.

All processes within the business need to be clearly identified so everyone knows their own responsibilities and has tools to perform those responsibilities. Automating as much of business operations as possible is important for efficient operations.

The marketing and advertising regulations in cannabis are a serious issue to consider when developing brand awareness and attracting foot traffic to the store. Dispensary owners need to think about brand development before the store is open, and they must constantly stay on top of their branding strategy once operations begin.

Prioritizing cash flow management, focusing on customer retention, efficient operations and reviewing financial metrics on a regular basis (at least monthly) are really the keys to growth. 

“Prioritizing cash flow management, focusing on customer retention, efficient operations and reviewing financial metrics on a regular basis are really the keys to growth.”

Q: CWCBExpo – You have great experience with one of the largest CPA firms that serve the industry, and you now own your own firm, Highly Elevated CPA. What advice can you give to anyone looking to go out on their own after working for a large corporate company? What steps do you recommend for them to take prior to branching out on their own?

A: Renata – The profession of accounting is currently evolving. There is a shortage of qualified accountants which is due to many factors. Some of them are declined enrollment in accounting programs, high educational requirements along with the complicated CPA exam, stress due to complex compliance rules and long hours during the busy season.

My professional accounting background is very diverse and unique. Back in the day, many CPAs working for public accounting firms would eventually move to private accounting where they would work on accounting just for one company. Nowadays, the trend is in the opposite direction. Many public accounting firms prefer to hire accountants from the private sector since these professionals would most likely know not just accounting, but operations as well. This type of work experience is very useful in public accounting firms which makes them great advisors. This was my path decades ago. I moved from being a controller for a realty management firm to being an accountant at a CPA firm.

The size of the CPA firm is also very important and I was fortunate enough to work for small firms, mid-size and larger accounting firms. The experience was very different at each firm due to the size. At each firm I learned a lot.

Starting your own business is a very challenging and a risky task. Having good technical skills is not enough when branching out on your own. As a business owner you also have to understand that you need to bring new clients. So the main recommendation before you decide to branch out is to have a good business network and have your name out there. There are many super smart accountants that don’t know how to do business development.

It’s also important to identify the goals for your firm, who will be the ideal client for the firm, what services should be provided, how many clients are enough, the infrastructure of the firm, etc.**

“As a business owner you also have to understand that you need to bring new clients. So the main recommendation before you decide to branch out is to have a good business network and have your name out there.”

* Visit CWCBExpo’s “Highest: In The Room” podcast to hear more from Renata Serban.

In the September 26 podcast, KymB gets down and real and specific with Renata about rescheduling, business planning, and the critical importance of proper accounting practices.

** Learn more about the technology to consider in your business plan. In this newsletter we feature a hot business topic from the 10th Annual CWCBExpo 2024 Conference: “High Tech: How Technology Can Drive Your Business.”  Hear about seed-to-sale software, humidity control, pre-roll machinery, vape battery technology, and of course, the impact these have on the bottom line. This session was moderated by Renata Serban, Founder and CEO of Highly Elevated CPA.

(More info and the link to watch this video are at the bottom of this newsletter.)

Rescheduling
Rescheduling Update – Prior 280-E Debts Will be Enforced

In our August newsletter, we highlighted that the Drug Enforcement Administration has delayed Rescheduling cannabis from Schedule I to Schedule III and has set a hearing for December 2, 2024. The stated reason for the delay is that they need to gather more information before a decision is made. Luke Ortner, Senior Counsel, IRS, Office of Chief Counsel, appeared as a keynote speaker in the American Institute of CPAs® and the Chartered Institute of Management Accountants® Cannabis Conference. The senior Counsel was questioned and commented on a variety of issues surrounding the taxation impact on rescheduling. One point made was that the 280-E tax policy will continue to be enforced until rescheduling is completed, and any eventual removal of 280-E is not likely to be retroactive, meaning that any past due IRS debts regarding 280-E are likely to remain collectable liabilities.

New York State Cannabis News
New York State Office of Cannabis Management, Cannabis Control Board

This month the NYS Office of Cannabis Management (OCM) announced and issued for use a new tool called the Legal Online Cannabis Activities Locator (LOCAL) Map. It is geared to streamline the licensing process and allow for transparency. It also is trying to save applicants money by not having to engage third party services during the application process. In their announcement, the OCM highlighted several aspects of this LOCAL Map tool including that it helps applicants and businesses to:

  • Evaluate retail locations
  • Check municipal opt-out statutes
  • Access data for cannabis licensing in NYS

The LOCAL Map tool has both an Industry-Focused Map tool and a Consumer-Focused Map tool geared as follows:

  • The Industry-Focused Map tool is meant for applicants, licensees and stakeholders, and can provide proximity reports, search licenses and provide the data needed to meet regulatory requirements
  • The Consumer-Focused Map tool is a dispensary locator map that locates the nearest legal dispensary in New York
NYS Market Update

There is some very positive news about retail sales in NYS. The NYS Cannabis Advisory Board (CAB) held a meeting on September 24th, and John Kagia, the NYS OCM Director of Policy, provided some sales data on the NYS retail market. Kagia asserted that the revenue outlook by year’s end is quite good and could approach $800MM.

  • The total retail sales in August closed in on $100MM
  • The total retail sales is projected to be over $500MM by the third quarter

Much of the good sales news was helped by the opening of more licensed dispensaries combined with the crack down on illegal shops, which substantially helped the legal dispensary sales.

New York State Government

Congratulations to These Recent Adult-Use Dispensary Openings

It is noteworthy is that as of September 24, 2024, the OCM reported that 197 legal Adult Use dispensaries have already opened for business. They project that 200 total dispensaries will be opened by the end of September.

Valley Greens
PEEKSKILL | 939 Central Ave, Peekskill 10566
Website: https://valleygreensny.com

Greens Greenery
UNADILLA | 54 State Highway 357, Unadilla 13849

High Peaks Canna
SARATOGA SPRINGS | 137 Maple Avenue, Saratoga Springs 12866
Website: https://highpeakscanna.com

Royal Blend Dispensary
KINGSTON | 2223 NY-32, Kingston 12401
Website: https://royalblenddispensary.com 

Alto on Chambers
NEW YORK CITY | 110 Chambers St, New York 10007
Website: https://altocanna.nyc

HighLife Health
NEW ROCHELLE | 19 Huguenot Street, New Rochelle 10801
Website: https://highlifehealth.co

ZenZest
STATEN ISLAND | 2343 Forest Avenue, Staten Island 10303
Website: https://zenszest.com

Lifted
JAMESTOWN | 320 North Main Street, Jamestown 14701

Bodega Express***
NEW YORK CITY | This is a Temporary Delivery Only (TDO) location.
No in-person or pre-order sales are allowed at this location.
Website: https://bodegaexpressny.com

Sparkboro
WASHINGTON HEIGHTS | 704 W 177th Street, New York 10033
Website: https://sparkborony.com

High Stone*
*Transitioned from Temporary Delivery Only (TDO) to Brick & Mortar location
STATEN ISLAND | 1938 Clove Road, Staten Island 10304
Website: https://highstone.nyc

State of Mind Dispensary
LATHAM | 521 Troy Schenectady Road, Latham 12110
Website: https://itssom.com

Gotham Hudson
LATHAM | 260 Warren Street, Hudson 12534
Website: https://gothamnyc.com

White Atmoss
NEWBURGH | 136 Lake Street, Ste 2, Newburgh 12550
Website: https://whiteatmoss.com

Nuna Harvest
MT VERNON | 696 Locust Street, Mt Vernon 11552
Website: https://nunaharvest.com

Beleaf BK
BROOKLYN | 1077 Atlantic Ave, Brooklyn 11238
Website: https://beleany.com

Leaf Plug
AMHERST | 3341 Sheridan Drive, Amherst 14226
Website: https://leafplug.com

Brooklyn Bourne
BROOKLYN | 2223 Church Avenue, Brooklyn 11226
Website: https://brooklynbourne.com

Bleu Leaf Dispensary
BRONX | 2034 Jerome Avenue, Bronx, NY 10453
Website: https://bleuleafdispensary.com

Ether
BUFFALO | 5100 Genesee Street, Buffalo 14225

The Highly Connected Dispensary
ITHACA | 423 Franklin Street, Ithaca 14850
Website: https://thehighlyconnected.com

Etain Kingston
KINGSTON | 445 State Route 28, Kingston 12401
Website: https://etain.com

Reef Dispensary
GREENFIELD CENTER | 2532 Route 9N, Greenfield Center 12833
Website: https://reef-dispensary.com

Satisfied Mind
NORTH TONAWANDA | 31 Webster Street, North Tonawanda 14120
Website: https://wnymind.com

Frass Box
BRONX | 3633 Kingsbridge Avenue, Bronx 10463
Website: https://frassboxcannabis.com

Luxus Botanica
ROME | 8234 Turin Road, Ste 1, Rome 13440
Website: https://luxusbotanica.com

Verilife East Syracuse
EAST SYRACUSE | 5841 Bridge Street, Ste 100, East Syracuse 13057
Website: https://verilife.com/ny/locations/east-syracuse

Sweetlife
MANHATTAN | 1662 First Avenue, New York 10028
Website: https://sweetlife.nyc

New Jersey Cannabis News

New Jersey Seeking Stakeholder Input on Medical Cannabis

Coming up on October, 1, the New Jersey Cannabis Regulatory Commission will have its final virtual session to seek input from stakeholders of medicinal cannabis. They seek participation from healthcare providers, patients, and business owners. They already held three such virtual meetings. These meetings are run by the Product Safety, Packaging, and Labeling Committee , and Permitting and Licensing Committee, and are scheduled as follows:

  • All meetings are currently scheduled for 11:30AM – 12:30PM each of those dates
  • These sessions are being organized by the NJCRC’s Commission on Public Engagement and Education Committee
  • The final roundtable session, scheduled for October 1, will be focused on Permitting and Licensing Committee issues.

If you want to participate, click here. Invitations are required in order to participate, and you will need to fill out an invitation request form.

NJ Cannabis Regulatory Commission

New Jersey Governor Phil Murphy Signs Hemp Bill

Governor Phil Murphy signed a bill that regulates the hemp market for intoxicating hemp products and prohibits the unauthorized sale to anyone under the age of 21.

National Cannabis News

DOOBIE Act

This month, the Senate Homeland Security and Government Affairs Committee approved the DOOBIE Act: Dismantling Outdated Obstacles and Barriers to Individual Employment. The DOOBIE Act is important because it limits the ability for federal agencies to use past cannabis usage against applicants getting security clearance or getting federal employment. This will certainly help to minimize the discrimination that applicants who use cannabis get when applying for federal jobs that require security clearances. Those applicants can no longer be disqualified solely due to prior cannabis use.

State Ballot Measures this November

Many states have cannabis ballot measures in this election and with early voting, things are already started. All cannabis industry businesses should stay up to date on the various measures that are now being voted on.

Nixon Recordings

The War on Drugs that Nixon unleashed needlessly created decades of injustice to people of the United States. Recently, it was uncovered that Nixon recorded, in his own words, his acknowledgment that marijuana is not dangerous. This revelation was recently found in his recordings that he kept private.

Pickleball Anyone?

Truleive Cannabis Corp. announced in a press release they forged a partnership with the Professional Pickleball Association (PPA), and with MLP by Margaritaville (Major League Pickleball).

This is an early example of a cannabis company sponsoring a sports league.

Germany Cannabis News

Germany’s Legalization

In our February Newsletter we highlighted that Germany legalized limited recreational use. Their plan sought to make it accessible through regulated cannabis non-profit groups with stringent rules regarding possession, age requirements, and grow restrictions among the members. It seems that the illicit markets there, are having a boom of their own while the German plan gets implemented. Several factors have impacted Germany’s legal recreational market.

THIS MONTH’S CWCBExpo NY 2024 ARCHIVED VIDEO

High Tech speakers (from the left) Renata Serban, Luna Stower, Dawne Morris, Dr. Sandra Shen, and Anthony Pagni
High Tech session speakers (from the left) Renata Serban, Luna Stower, Dawne Morris, Dr. Sandra Shen, and Anthony Pagni CWCBExpo NY 2024

High Tech: How Technology Can Drive Your Business

This is a discussion about how technology should figure into your cannabis business. We explore how technology affects your ROI and the aspects that can make a difference.

The session is brimming with cannabis business innovators, technologists, and entrepreneurs discussing how technology could impact your business plan and how it can make a difference for your business success. Moderated by Renata Serban, Founder and CEO of Highly Elevated CPA, and joined by iconic leaders from various sectors, this session delivered a very energetic and informative approach on how tech can and will drive your business.

Moderated by Renata Serban, Founder, CEO, Highly Elevated CPA, with: Dawne Morris, CEO and Co-founder of PROTEUS Business Solution; Anthony Pagni, Founder & Co-Owner Perfectionist Rolling Equipment, Managing Partner, Aephex, Automated Pre-Roll System; Dr. Sandra Shen, Founder, ATMOSIScience Inc; Luna Stower, Chief Impact Officer, Ispire Vape Technology.

Don’t miss out. Get prime exhibit space now.

CWCBExpo, 11th Annual
June 4 – 5, 2025
Javits Convention Center, NYC

 

Tim Seymour, NY 2023

10th Annual CWCBExpo Returns with Expanded Experiences, Education, Networking

Press Release – May 30 2024

CWCBExpo, 11th Annual
June 5 – 6, 2024, New York City, Javits Convention Center
10th Annual CWCBExpo Returns to New York, June 5 & 6 with Expanded Show Experiences, Education, and Networking Opportunities

Updates on Rescheduling Part of the Agenda & New Partnership with Cannabis Workforce Initiative

 

(New York, NY, May 2024)—The leading East Coast cannabis conference and trade show, CWCBExpo, returns to the Javits Convention Center, June 5-6, 2024 with immersive exhibit floor experiences, top education as well as plenty of business building opportunities and after parties. This year CWCBExpo has partnered with the New York Cannabis Workforce Initiative (CWI) offering attendees a unique opportunity to connect with leading employers in the rapidly growing cannabis industry in the New York Cannabis Workforce Pavilion.

“CWI is proud to partner with CWCBExpo to showcase our workforce development and legal educational programs as well as platform colleges that have cannabis curriculums. There is no better forum for CWI to promote our services that prioritizes diversity, equity, quality jobs and career paths in this emerging cannabis industry.” said David Serrano, Project Manager, Cannabis Workforce Initiative. “We also look forward to hosting a Job Fair at CWCBExpo for anyone interested in employment and career paths.”

CWCBExpo New York will also offer expanded educational opportunities including two pre-show in-depth workshops on Dispensary Ownership & Operations Bootcamp and Cultivation: Licensing, Technology & Operation led by subject matter experts, Sara Gullickson, Founder & CEO, Cannabis Business Advisors; and David Fettner, Co-Founder, Grow America, LLC, respectively.

There are also a diverse range of curated sessions taking place on Wednesday and Thursday that will feature speakers with unique expertise, all aimed at providing the essential knowledge and insights to elevate and grow businesses as well as provide updated rescheduling insight. Topics include an Industry Update: “Trends, Challenges and Opportunities – Why New York is the Market to Watch in the Midst of Rescheduling;” by Cy Scott of Headset; a Fireside Chat with Tremaine Wright, Chair, New York State Cannabis Control Board; “Cannabis Retail Marketing in the Digital Age;” “High Tech: How Technology Can Drive Your Business;” and “The Journey to Legitimacy: The OGs and OQs of Cannabis.”

Additional special features include a Fireside Chat with Industry Icon, Josh Kesselman, Founder and CEO of HBI International/RAW Rolling Papers and a Women in Cannabis Luncheon that includes a Fireside Chat with Dawne Morris, Founder, CEO, Proteus420 and a panel on “Entrepreneurship While Female: Motivated, Intelligent. And Successful.”

A hallmark of the CWCBExpo New York events are the ample business-building opportunities including the B2B Bash Rooftop Party and Norml Forml on June 4th, the Industry Yacht Party on June 5th, NYCRA’s After Party on June 6th and Cannabis Week events and promotions that bring the industry together.

“This is the year that CWCBExpo celebrates the community, the industry, our clients, and all the newcomers who’ll be joining in—the industry is about to grow again,” said Christine Ianuzzi, CEO, CWCBExpo.

CWCBExpo New York will also have a dynamic expo floor with the most innovative product, service and technology companies showcasing their solutions for the entire cannabis ecosystem. Sponsors of CWCBExpo include Green Life Business Group Inc. (Show Bag); DisplayDispensary.com (Lanyard); Proteus420 (Women in Cannabis Luncheon and Women’s Pavilion Supporting Sponsor); and ATMOSIScience (Women’s Pavilion Supporting Sponsor).

“For 10 years, CWCBExpo’s mission has been to provide those involved in the business of cannabis with essential resources and information for their success. This event is uniquely crafted to foster professional growth, provide top-notch education as well as cutting-edge products, services and show experiences and our show in June will be no exception,” said Mary Bender, Show Director, CWCBExpo.

Registration is open for CWCBExpo New York. To register go to: https://cwcbexpo/registration_ny/

For more information on sponsoring or exhibiting contact: cwcbe@cannabismeansbusiness.com or call 201-580-2050.

About Cannabis World Congress & Business Exposition (CWCBExpo)

CWCBExpo is an established business-to-business trade show event for the legalized cannabis and hemp industry. It is held in New York City, the largest business, financial, and media market, and is the leading forum for dispensary owners, growers, suppliers, investors, medical professionals, government regulators, legal counsel, and entrepreneurs looking to achieve business success and identify new areas of growth in this dynamic and fast- growing industry.

Visit: www.cannabismeansbusiness.com.

Editor’s Note: Qualified members of the media are invited to register as press for CWCBExpo New York. To request a media pass for CWCBExpo New York, please contact Annie Scully at: press@cannabismeansbusiness.com

The Packaging Company product display

Industry Deep Dive: Pre-rolls, Papers, and Cones

The pre-roll is one of the most recognizable cannabis products. It’s ubiquitous in many legal cannabis markets, both medical and adult-use. What many people don’t realize, though, is that the rapid growth of this market segment has led to serious innovation. Pre-rolls are no longer the simple 1-gram cones with a filter at the end. You’ll find lots of sizes, infusions, and more.

The types of pre-rolls available, how they are made, and the way they are marketed has evolved significantly since the emergence of the legal cannabis industry. This industry deep dive explores the pre-roll market growth, how the space has changed, and how cannabis businesses can leverage this market.

What does the growth of the Pre-rolls market look like?

Although it’s far from the largest cannabis market segment, pre-rolls represent a significant portion of the U.S. cannabis industry, accounting for 12.7% of market share and generating more than $1.5 billion in sales in 2022. It’s also a fast-growing space, more than tripling in terms of sales revenue since 2018, when the space generated $406 million in sales.

What’s driving that growth, though, may be most interesting. According to Harrison Bard, co-founder of Custom Cones USA, it’s rare that customers stop in just to pick up a few pre-rolls. Instead, they are most commonly added alongside an order as an afterthought or impulse buy.

“Pre-rolls are one of the most attached items,” he said. “[Cannabis] flower is still the most purchased item [in a dispensary] by itself, but pre-rolls have the highest attachment rate. They’re a great add-on item that can increase your customer’s average basket size.”

Leading the way in the space are three California companies Sublime Canna with $33.2 million in sales, Jeeter with $27.2 million, and Lowell Herb Co. with $26.4 million in 2020. The rapid growth of the pre-roll market segment has nearly all brands that produce pre-rolls eyeing expansion in the coming years. According to data from Headset and Custom Cones USA, 95.7% of preroll brands expected to expand following 2020.

The many types of Pre-rolls on the market

As the pre-roll market has grown, the variety of pre-rolls has increased as well. While it’s most common to find 1g pre-rolls in new and developing markets, more mature markets have an entire selection that includes multi-packs of pre-rolls (including two-packs, five-packs, and 10-packs), pre-rolled blunts, 0.5g pre-rolls, and the mini “dog walkers” that range between 0.25g and 0.35g per pre-roll.

Today, 1g pre-rolls remain the most common seller, accounting for 62.6% of the pre-roll center, according to the report from Headset and Custom Cones USA. Close behind are 0.5g pre-rolls at 43.2%, followed by 0.75g pre-rolls at 18.7%, >0.5g pre-rolls at 10.8%, and then >2g pre-rolls at 12.2%.

But it’s not just the size of pre-rolls that’s increasingly varied; it’s the types of pre-rolls available. One type of product, in particular, is becoming a mainstay of the sector.

“We’re seeing infused pre-rolls pick up way more quickly in new markets,” Bard said.

Infused pre-rolls are those that are brushed with extract and, sometimes, rolled in kief, providing an extra potent session. In fact, these types of pre-rolls accounted for 42% of all pre-roll sales in 2022. That’s a marked increase from 2018, when these types of pre-rolls represented just 12.7% of the overall pre-roll market segment, according to the report from Headset and Custom Cones USA.

There are also mixed strain pre-rolls, which include a blend of multiple cultivars (also called strains) designed to accentuate a particular set of effects. Pre-rolled blunts are also rapidly rising in popularity, Bard said.

And each of these product types come in a variety of wraps beyond the conventional refined white paper, such as hemp wraps and flavored wraps. Today, the classic wrap accounts for just 44.3% of the market, followed closely by organic hemp at 35% and unrefined brown wraps at 23.6%, according to the data from Headset and Custom Cones USA. Non-organic hemp is next at 17.1%, followed by natural leaf at 10.7% and cigarette tubes at 8.6%.

It’s also common to find a wider range of quality in more mature markets. A common misconception is that pre-rolls contain mid-shelf cannabis or shake that falls from the buds in transit or during the trimming process, but that’s not always true. While there are certainly lower quality pre-rolls out there, some brands have dedicated themselves to using top shelf flower in their products for consumers who want a more premium experience.

“A lot of companies are emphasizing fresh products. They’re making sure pre-rolls are created to order; they’re not just making 50,000 per month and letting them sit around for ages before going to retail,” Bard said. “I’d liken it to sushi in the grocery store — it’s only good for a few days. After these pre-rolls age too much, they’re processed into an edible or concentrate.”

How dispensaries can make the most out of pre-rolls and paper products

There are a few ways dispensaries can take advantage of pre-rolls (and other paper products like cones) to increase the average transaction size and bolster revenue. Follow these tips to make the most out of pre-rolls and related accessories at your dispensary.

1.    Display pre-rolls prominently at the point of sale

Customers are unlikely to buy what they can’t see, and that includes pre-rolls. Just because they’re not the most sought after product doesn’t mean they shouldn’t be prominently displayed. And, since they’re a common add-on item or impulse purchase like a candy bar at the grocery store checkout aisle, placing them close to the register incentivizes your customers to add them to their basket at the last minute. Notably, not every state allows for this kind of product access on the dispensary floor, so you may need to get creative in states where customers can’t pick up the products themselves.

“Think about how pre-rolls are merchandised in the store,” Bard said. “Some dispensaries keep pre-rolls in buckets beneath the counter, but better merchandising increases sales. Make sure they’re eye-level behind the counter so customers are seeing them at the point of sale.”

2.    Offer pre-rolls as a way to try out something new

Promoting your pre-rolls as a way to try out a different cultivar or brand can prompt customers to consider purchasing additional products. For example, if you’re stocking a new cultivar that you think will be popular, offering high quality pre-rolls that contain that flower could be a good way to get the word out among your customers and drive sales of that flower in the future.

“Pre-rolls are a good way to try out a brand,” Bard said. “It’s like a little sample, an easy way for someone to try new flower or a brand compared to buying an eighth or concentrate. It’s a great way to get more brand exposure by offering a lower price point to consumers that is more accessible.”

3.    Keep a variety of pre-rolls in stock

As the pre-roll market evolves, there are more types of pre-rolls available. Don’t just stock the typical 1g pre-rolls; your customers are likely to expect pre-rolled blunts, multi-packs, and infused pre-rolls as well. Ensuring you have a diversified inventory of pre-roll products increases the odds that your customers will find the type of pre-roll they prefer.

“You definitely want to offer multi-packs and infused pre-rolls,” Bard said. “I would say flavors are important too. Variety is really important for a dispensary, so offer different flavors and strains.”

4.    Include pre-rolls in product bundles to boost sales

If you want to encourage customers to purchase larger baskets, consider offering pre-rolls in a product bundle at a favorable price. Your customers will feel like they’re getting a price break on product, and you’ll use pre-rolls to drive larger transaction sizes. This can help boost revenue per customer and move more product, especially when you’re looking to bring in new inventory.

5.    Sell rolling papers and cones for customers who roll their own

There are some consumers who prefer to work with flower they’ve purchased in bulk, as well as some who avoid pre-rolls due to a misconception that they are necessarily lower quality products. When it comes to these consumers, it’s good to keep rolling papers and empty cones on hand.

“Flower remains the number one selling category, so for people who don’t know how to roll, cones are really popular, and papers are popular with those who know how to roll,” Bard said. “Also, pre-rolls have this negative stigma that they’re low quality, so some people won’t buy them even though there are high-quality pre-rolls on the shelves. It’s still good to have empty cones for those customers.”

Automation and the cannabis pre-roll market

In the early days of the cannabis industry, it was common for dispensary employees to spend a portion of their day manually producing pre-rolls to sell throughout the dispensary. Now, that’s far less common, as automated rolling machines — some that are quite sophisticated — have become the norm. Automated pre-roll machinery is capable of producing thousands of pre-rolls per hour while freeing up dispensary staff to attend to more pressing tasks.

Paxiom by Canapa Solutions is one such pre-roll automation company that has pioneered this space with units like its JuanaRoll 8-channel, which is capable of turning out 4,000 pre-rolls per hour, according to digital marketing specialist and project manager Val Miller.

“All companies typically begin with hand packaging or semi-automatic volumetric systems,” Miller said. “As companies grow, it becomes very difficult to scale without automation to produce high productivity and consistency.”

Automation at this scale is most likely to be used by manufacturers who are creating high volumes of products to ship to retail locations throughout their state, rather than the dispensaries themselves. They can significantly cut down the time and costs required to produce enough pre-rolls to fill multi-packs at scale, for example. The volume needed to meet that demand can be quite immense, depending on how many dispensaries a manufacturer is selling to.

To improve scalability and meet growing demand, Miller said Paxiom developed the JuanaRoll as a modular solution that could begin as a one channel machine and expand as a company needs up to a maximum of eight channels. There are fully automated and semi-automated models available.

But just because pre-roll production is trending increasingly toward automation doesn’t mean the human element is entirely eliminated, though. Success still requires coordination between manufacturers and the automated equipment vendor.

“Filling and packaging pre-rolls is very difficult and requires a team effort between us, the manufacturer, the cone supplier, our customers and the dedicated people that operate them,” Miller said. “It’s important to work within a cohesive group that have the same goals and can collaborate.”

Pre-rolls are a growing wave of the future

The pre-roll space doesn’t often get as much press as whole flower or concentrated extracts, but it’s just as unique and lively. As pre-roll sales grow well beyond the $1 billion mark, the space has continued to evolve along with the rest of the cannabis industry. Clearly a mainstay for any manufacturer or retailer in cannabis today, pre-rolls are an important hallmark of the industry and will continue to be central to the space for years to come. Whether you’re serving consumers or manufacturing to meet the needs of dispensaries, understanding this growing market and how to best compete can be an important recipe for success.

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