With Canada’s direct cannabis market projected by Ernst & Young to hit 11 billion CAD in valuation in the next six years, and with an expected consumer pivot away from combustible forms of cannabis towards extracts, edibles, and nonedible derivatives, there has never been a better time to invest in cannabis retail. Recreational cannabis stores and dispensaries will become more important to consumers as the market grows, and this is the perfect time to invest in that sector.
Deloitte’s comprehensive 2018 report about the cannabis industry in Canada laid out projections and overviews regarding the cannabis market; the report’s authors reached a remarkable conclusion about cannabis consumers: that current and likely cannabis consumers place value on being able to visit brick-and-mortar cannabis retailers. The report details how the firm expects consumption patterns to shift: “Over time, as retailers develop a better understanding of their customers’ needs and behaviours, improve their customer experience and engagement programs, and fine-tune their products’ quality and integrity, we could expect to see an increasing share of cannabis sales transition to legal sources. Retailers that are able to secure the supply chain, protect and analyze customer data, and promote public health and safety will be well positioned to achieve a competitive advantage.”
In addition, the Deloitte report states that more than half of cannabis consumers surveyed said that they would prefer to purchase cannabis at a licensed private retail store. Consumers expect knowledgeable staff, clear and simple pricing, convenience, a great customer experience, product choice, privacy, and safety, and Canadian cannabis retail stores are positioned to deliver on those expectations.
With the projected consumer pivot away from combustible forms of cannabis, cannabis retail stores become even more important, since retail staff will be able to offer expert advice to consumers regarding extracts, tinctures, and edibles, and answer any questions that might arise. Personalized customer service contributes to revenue and customer loyalty, as stated in this recent Forbes article by Shep Hyken. In the article, Hyken explains that 44 percent of customers who were surveyed said that they would repeat after a personalized customer service experience, and that 40 percent said they would make more expensive purchases than they had initially planned.
This is the right time to get into the cannabis retail market. Investment in the sector is growing and gaining pace, and it’s an ideal opportunity for investors who want to get in on the ground floor of what will be a significant market for many years to come.
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