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Tailoring Retail Spaces to Demographics

Photo: Green Qween

“If you try to be all things to all people, you won’t be anything to anybody.”​​ For product brands, this old adage has felt more and more apt over the past few years. Competition is increasing and differentiation is key, leading brands to identify relevant consumer segments as opposed to chasing every potential sale. But does the strategy of “niching out” and focusing on specific demographics make sense for a dispensary, a fixed-location business with a total addressable market limited by geography?

A growing number of store operators are testing the strategy. In some of the more open retail markets like California, Michigan, and parts of Canada, competition for customers is fierce, and retailers can find a portion of their fate in the hands of municipalities, which often cluster cannabis retailers together in low-foot-traffic “green zones.” Services like Weedmaps and Jane Technologies encourage shoppers to compare prices, leading to a relative normalization in prices at a moment when expense is a key motivator behind purchasing decisions. So in those circumstances, what makes one retailer different from the store across the street? Some are looking in the mirror to find the answer, bringing their ethnic background, sexual orientation, or personal experiences to the forefront to relate to valuable yet overlooked audiences.

“There are so many dispensaries out there, and very few give you a unique reason to come in,” said Seung Lee, founder of Seoul Cannabis, a new Korean dispensary in Toronto betting on the rapid normalization of cannabis in the Korean and wider Asian community. “But if you’re Asian and you live nearby, you’re going to give me one shot. From there, it’s my job to retain you as a customer.”

Lee, a serial entrepreneur and veteran of the Canadian cannabis industry, observed a saturated retail market bereft of options for the Asian community, who make up almost a quarter of Toronto’s population. “There are just so many stores in Toronto, and that’s part of the reason I decided to enter the market with a more ethnic twist,” he said. “This is me representing myself.”

In California’s affluent retirement-and-golf enclave Carmel-by-the-Sea, Synchronicity Holistics serves the region’s older population with products they can trust from a source they can relate to. Founded by entrepreneur and multiple sclerosis patient Valentia Valentine, Synchronicity is positioned at the nexus of opulence and healthcare. In the three years since the store opened, the business has made impressive strides in presenting cannabis as an alternative to pharmaceuticals and incorporating a level of aftercare that would be alien to just about every other dispensary in the country.

“We’ve got nurses and pharmacists on staff, and this has gone a long way in helping people trust us,” said Valentine, who was diagnosed with multiple sclerosis in the late 1980s and started using cannabis more than a decade ago. “We stay in regular contact with new patients for the first seventy-two hours to see how they have taken to the products, and from there we work on personalized dosing to make sure they are getting the full benefits.”

Down the coast in Los Angeles, the retail market is notoriously competitive, described memorably by an industry insider as a “knife fight in the mud.” Attempting to stand out by market niching starts to feel like a smarter strategy than trying to appeal to everyone, particularly at a moment when consumers are showing a willingness to patronize businesses that mirror their values.

The founders of Green Qween, a new store in downtown Los Angeles, claim the business is the first dispensary in the country catering specifically to the lesbian, gay, bisexual, transgender, and queer (LGBTQ+) community. Cofounder Taylor Bazley echoes Lee’s sentiments, highlighting LA’s competitive market as a reason for focusing on the queer community, who consume cannabis at higher rates than other demographics. “You have 350 other dispensaries in this region that are differentiating a little bit around price or aesthetic, but they’re not really doing anything substantively different.

“I suppose we can call it differentiation,” Bazley continued, “but for us, it’s just authentic representation.”

Across the majestic LA River from Green Qween is Hierba, a Hispanic-owned dispensary in the city’s Boyle Heights neighborhood, which has been a vibrant center of Mexican-American and Chicano culture for the past fifty years. The store is trying to overcome some lingering stigma toward the plant in the Hispanic community, which itself has borne a disproportionate brunt of the fallout from the war on drugs. In 2019, more than 1,500 people were arrested for cannabis-related crimes in Los Angeles. Fifty-four percent were Latino.

“Boyle Heights is a working-class Hispanic area that’s rich with culture, and as a store we’re focused on communicating the health benefits of the plant to our community,” said Guilermo Menjivar, owner and operations lead for Casa 88, Hierba’s parent company. “This area has only ever really had trap [illicit] shops, so for a lot of people, Hierba is their first legal cannabis retail experience.”

Design often plays an integral role in the positioning of each of these stores. Seoul Cannabis’s “Korean-ness” comes through in the interior, which was executed by Toronto-based dispensary designers SevenPoint Interiors. The wall features paintings referencing Korean folktales and records from Korean hip-hop artists, while the middle of the shop floor is divided by a zigzag wall that says “Seoul” in Hangul on one side. Lee said this is making Koreans stop in their tracks outside the store and peer in.

“We’ve got cameras that can see outside the store, and I see Koreans posted up outside trying to read it and take pictures. That’s the reaction we want,” Lee said. “We get a lot of Koreans who come by and say, ‘I don’t smoke. I just want to see what your values are.’ And we love that. It helps with normalization.”

Synchronicity Holistics has a private room where guests can sit down with the store’s in-house pharmacist to get an extensive consultation. Aesthetically, the store pulls plenty of visual references from high-end jewelry and fashion retailers like Cartier and Hermes, which will no doubt help the older, high-net-worth residents of Carmel, Monterey, and the surrounding areas feel comfortable buying weed for what might be the first time in their lives.

Stepping off the bustling streets of downtown LA and into Green Qween is a revitalizing vibe shift. An exultant disco playlist rings out over the spacious, neatly organized shop floor, while the sexy, fluid team of budtenders — who look like they’ve strutted right off the pages of Dazed — walk customers through the inventory. Green Qween incorporates a wall of queer, female, and Black-owned brands that are showcased respectfully, supportively, and at no cost to the brands.

“The brands that are owned by upstart LGBTQ and BIPOC [Black, Indigenous, and people of color] entrepreneurs often don’t have the capital to be able to pay hefty slotting fees,” said Bazley. “We want the store to be a platform for these brands locally so they can create demand and leverage that to get into new shops.”

Bazley added Green Qween certainly isn’t stocking only these kinds of brands, but the founders want to use the store’s merchandising to level the playing field with the more heavily capitalized brands they stock, such as Heavy Hitters and Stiiizy. “We want this to be a genuine marketplace,” he said. “We have a lot of the big brands consumers are going to ask for, but we want to highlight the LGBTQ brands to help them compete. And if they can’t compete in the marketplace of ideas, maybe it’s because the consumers didn’t like them. Well, that’s that. We’re not trying to prop up anyone in a way. We’re just trying to level the playing field.”

Hierba stocks some Hispanic-owned brands like La Familia and Dulze, though Menjivar explained price rather than relatability motivates his customers to choose one brand over another.

“Value works best in our shop,” he said. “There really is no brand loyalty at this point, which is actually a great opportunity for emerging brands that really want to get some market share from the big companies. We have some major top-shelf flower brands here that don’t really move, but then we have Green Habitat from downtown LA with a $38, indoor-grown eighth we can’t keep on the shelves.”

Hyper-local marketing and community outreach are essential for any dispensary, but those attempting to court a specific demographic — particularly one less explored by cannabis companies — getting out into the community to meet people where they live is imperative.

Synchronicity has reached its older-than-sixty medical consumers through its founder’s story as well as targeted outreach to cancer-support groups, nursing homes, and Meals on Wheels. “The reputation locally is getting better and better to the point where doctors are now sending their oncology patients to us,” Valentine said. “But people who have read my story are flying in from places like Florida, New York, and Texas, and when they leave, we help them find comparable legal products where they live.”

Black-owned dispensary Gorilla RX in South Central Los Angeles plays an active role in the community through events like a recent neighborhood-and-city-council event in Crenshaw, where the store curated a cannabis corner with some of its key brand partners and distributed coupons to Black seniors.

Hierba opened itself up to the neighborhood through donations to children’s charities, after-school and music programs, and nearby food pantries. For Menjivar, employing residents of the Boyle Heights neighborhood is important. He boasts a fully bilingual staff, 80 percent of whom live within three miles of the shop. “We want local, recognizable faces,” he said. “People of the community serving people of the community.

Being part of the community these stores aim to serve is key to their success. None of them would be able to meet their communities confidently without being authentic members, and that is the big thing they share in common. Because they are part of the specific demographic they serve, the founders and their staff members have formed a solid human connection with the market, and that is a key tenet of their brand.

“I think my story is my brand. I think when you meet someone who can share your own personal experiences with insomnia, anxiety, alcoholism, chronic pain, it creates a level of trust,” said Valentine. “People are filled with hope when they leave our store, because it has helped me. I used to be in a wheelchair. I don’t even walk with a cane anymore. That’s a pretty powerful testimony.”

Bazley and his business partner, Andrés Rigal, are active and visible participants in LA’s queer community, and their well-intentioned approach to event programming and inventory assortment will help the store find and keep its unique audience.

“Queer communities coalesce around events and gatherings. We’re good at that,” said Bazley, who marked the opening of Green Qween with a major grand opening event. “We’ve known for a long time that we have to band together, and all boats rise when the tide goes up. And that’s very much what we’re trying to do here.”

For Lee of Seoul Cannabis, opening the store ironically means he can’t return to his home country of Korea anytime soon. The country’s draconian laws against cannabis — for Korean citizens, merely using the plant in another country could result in a jail sentence — mean he would run the risk of arrest upon his return. “I can’t visit Korea while I run this business, and that’s unfortunate,” he said. “But that was a decision I had to make up front.”

He hopes through his outreach to the Korean business community and immigrant entrepreneurs, Seoul Cannabis can pave the way for reform — both legislatively and consciously — and bring one of the more conservative but affluent demographic groups into the dispensary to explore the plant’s potential.

By Ross Gardiner

Originally published at https://mgmagazine.com/business/retail-merchandise/tailoring-retail-spaces-to-demographics/ on September 8th, 2022.

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mg is a monthly business magazine covering the recreational and medical cannabis business, meeting growing demand for business news and information.