Building a business platform for a rapidly evolving industry.
At Finlabs, we love challenges that are fraught with uncertainty and change. These are not negative things to be shied away from in favor of following certainty and definition. They are positive areas of opportunity that we point our creative minds towards anticipating and being ready to exploit in order to create a far bigger business impact.
Is there a risk? Of course…when you’re driven by time and delivery. But when you approach it from the POV of seeing an opportunity to create industry-shaking waves and establishing category leadership by being the first to exploit a gap, the risk, in reality, is NOT exploring these opportunities
Rare is it to find a company that has the passion to build their business, and the foresight to invest in finding and creating their own industry-defining waves. We’ve been very fortunate at Finlabs to have acquired just such a client in Nectar and, in partnership with the ambitious team at Nectar, we have business growth in mind along with the goal of creating an industry leader in the exciting and rapidly evolving cannabis retail industry.
It’s key for us to step into a relationship knowing we will be working with a true partner that will help us make the right moves, choices, and be as enthusiastic about growing our business as we are. That’s exactly what we found with Finlabs.
– Jennifer Primrose, Director of Marketing & Design, Nectar Markets
The State of the Industry
The Cannabis industry in the States is one that is evolving rapidly in acceptance and legalization. In many ways, it has been supercharged by the Pandemic as more and more people turn to it as a safe way to deal with some of the changes forced upon us and the effects they have on us both physically and mentally.
Although not yet legal in all states in the U.S. for recreational use, the outlook is very bright for it to open up to more and more states quickly, especially with influential states such as NY recently passing a bill to legalize recreational cannabis, the 16th state to do so.
But the opportunity for businesses in the cannabis industry is still hobbled by certain restrictions that occur, even with the increasing acceptance. State-by-state legalization means we are left with island states, or groups of them, that are essentially landlocked by surrounding states that have yet to legalize cannabis usage. Transportation of product is therefore difficult as a corridor of legal states needs to be available for product to be transported through. The result is businesses having a far more localized or regional focus as that has a less complex and immediate business impact on them.
Payment companies are still working through how they handle the different state rules as well. This makes the prospect of scaled e-comm more difficult. The fact is that the transaction for cannabis products MUST occur within the legal state as well. So the large credit card companies, whose technology is set up to handle transactions on a national scale from anywhere at disparate remote locations, cannot guarantee where the exchange will occur. This results in a flat-out refusal to work with cannabis companies or larger fees that eat into profits.
The emergence path of Cannabis companies
When we look at the industry we can see some very visible big players. Companies like Tilray that has a growing global presence that started in the medical marijuana production and distribution realm. They are aggressively evolving, with the ambition to extend and establish themselves as a true consumer brand. They view the industry as very much mirroring the times of prohibition, and feel cannabis products, and the brands that produce them will soon be as accepted and recognizable as the big alcohol brands of today.
We also see a plethora of comparatively small players when it comes to dispensary chains. These individuals and organizations have generally been around since the days before legalization in some shape or form, and have become more open and visible as legalization has allowed. The rapid change has resulted in some of these smaller organizations turning profits that many long-established companies would be jealous of. But that legacy underground culture remains, with trust playing a huge part in who these company leaders allow into their inner circle, even when there is a clear knowledge and expertise gap to fill.
The tipping point is there. The companies that are willing to seek out and find partners they can trust to push them to the next level, will go there. The ones that feel safer in what they know and the size and influence they have, are likely happy to maintain a status quo, it’s not a bad place to be after all.
The Service Design Puzzle
For Finlabs, as a company focused on establishing business-impacting change through technology, the nuances of this industry, from the practical to the cultural, create interesting new gaps to fill when it comes to connecting a brand to its audience and consumers.
The fact is, many of the hurdles and restrictions that we are faced with now can disappear in the blink of an eye as states amend their rules. We need to look at designing a solution that anticipates these changes so we can easily pivot the solution to take advantage of new openings and help drive business when these changes occur. Even at the point of writing this, Apple has seemingly opened up its acceptance of apps submitted to the app store that promote recreational cannabis use. That's a new window of opportunity to jump on in terms of CX as well as a press-worthy moment that could elevate the profile of a company by achieving a first for the industry.
The opportunity for scale is one we want to design for as well. Every state that legalizes the use of cannabis is an audience, and potential revenue stream we want to tap into as quickly as possible. With a digital technology solution, we have the ability to set a technology framework and mechanism, and make it available wherever and whenever it's needed.
Scaling localized fulfillment
The relationship between these brands and their audience is a pretty unique one. The audience is steadily growing as the uses and benefits of cannabis products become more apparent. Everyone from students to athletes to soccer moms form an ever-growing patchwork of targeted consumers. But there is a common element in where they seek out discovery of these products, the brick and mortar stores. These are increasingly comfortable, unintimidating, enlightening, and inclusive environments. As much as a single individual may become a regular consumer from the brand, they will likely also become a regular visitor to a specific store, allowing it to become their anchor point in their community to fulfill their needs.
As a result, our digital solutions should not compete for the audience of the brick and mortar stores, but more look at how we augment that experience and further deepen the bond and community culture that is often unique to each and every store.
We can look at the coffee shop as a somewhat similar model. Starbucks has been very successful at taking a big brand approach that has grown through using technology to cultivate that bond between their consumer and the localized stores around them. However, I feel that the cannabis stores are a level of connection beyond that of a Starbucks. Where they can drop themselves in any community and tap into a very common need, the cannabis brick-and-mortar stores become more a part of what defines the communities they reside in. The atmosphere and familiarity of a store is crafted by the community it serves. Losing that familiarity in favor of a meticulously crafted mass appeal brand will likely alienate the consumer base they are looking to cultivate. For us, that means a platform must maintain some overall brand consistency that is familiar across all touchpoints but with the ability for each store presented through the digital products to cater to its own unique audience. Their own keystone products are defined by popularity at their location, events that tap into their community through appeal as well as location, and possibly a store-specific micro-social network that allows the staff and customers to mingle and explore a common passion together.
The possibilities are vast
We’ve just begun our journey with Nectar, but it's one we already see many exciting opportunities for us to help them become a leader in the space. This is what drives us at Finlabs. It's our passion and desire to take the companies we work with to places they never thought of, and success they never dreamt of.
Sure, our solutions need to answer immediate needs, but we do so with an eye on facilitating future growth (and accomodating the next immediate needs that inevitably occur without any notice). We are product and platform partners as opposed to a production company delivering on “projects”.
In many ways, we’re an underdog. We’re intentionally small, we intentionally cultivate a start-up mentality and push to get big results from small investments. As a result, we love an underdog story. The zero to hero transformations. The David and Goliath battles. Our passion is to create those results in everything we do.
We know product building. We understand how it fits into business success and can fuel growth. We use technology to make these ideas and strategies a reality. And, when partnered with knowledge experts and passionate leaders from ANY industry, there’s a magic that happens that can be a real catalyst for industry-defining innovation.
About the Author:
While working in the advertising industry he led teams focused on technical innovation and how it can be leveraged for marketing campaigns and brand building platforms, creating forward-thinking projects that have been showcased at events like Googles Sandbox, and even recognized in Time Magazine as an “Invention of the Year”.
At Finlabs, his focus is on building a team that can tackle any challenge, look beyond their boundaries, and grows the collaborative relationships we desire with our clients.