2020 has been a terrible year for retail, but one brick and mortar that has fared fairly well is cannabis. While many dispensaries did have to close during lockdowns, many quickly pivoted to curbside and home delivery. Several reported that sales rebounded once the lockdowns were lifted. Surviving Covid-19 has been a testament to a company’s ability to survive. It was also the moment of truth for cannabis companies and whether they had chosen the right partner for its retail software.
Dispensaries that used Cova Software found themselves well-armed to fight the Covid-19 battle. The company isn’t new to retail and has over 20 years of experience and powers over 20,000 locations. The company has had virtually no downtime, whether it’s Black Friday, 4/20, or a global pandemic.
Not only were cannabis companies forced to pivot to a new retail model, many states were equally pushed to suddenly change regulations to allow for curbside delivery and home delivery. That meant that some compliance laws changed almost overnight. Luckily for Cova, its software integrates with government systems like BioTrackTHC, Leaf, and Metrc. The company was able to deftly make changes and make sure its cannabis clients remain compliant with state laws. In Canada, it can generate compliance reports for provincial regulators.
Another adjustment that cannabis retailers had to make during the pandemic was customer interaction. Meeting a customer in the parking lot was a big change for many budtenders. This meant the days of a 20-minute chit chat at the counter about products was over (at least for the time being) and speed efficiency became the name of the game. Cova says its dispensary POS (point-of-sale) offers ID scanning for registering and checking in customers, which also automatically applies taxes and discounts based on membership levels.
Another aspect of the effect on cannabis retailers during the pandemic was the need to rely on more e-commerce. Consumers often had to make purchases through the company’s website and then arrange a pickup or delivery. A basic website with a smattering of inventory offerings was no longer acceptable. Cova said that data shows that online customers reorder 2.5 times within 30 days and spend an average of $75–$100 per order. Cova made sure its software worked well with the Leafly, Dutchie, and Weedmaps platforms as dispensaries had to up their e-commerce game.
Cova can also adapt to whichever payment system the cannabis company chooses. Since the major banks and credit card companies won’t work with cannabis, retailers have had to get creative with payment methods. Legislation to address the banking problems in the cannabis industry has bi-partisan support, but cannabis laws have been a low priority. Hopefully, whoever is elected will make progress towards this issue, but in the meantime, it’s a bonus to know that even if the payment option changes, the retail software doesn’t necessarily have to change along with it.
One thing that Cova doesn’t do is seed-to-sale. The company said that based on its research, cannabis companies preferred to use a separate dedicated system for cultivation facilities. It prefers to put all its focus on retail as opposed to be a jack of all trades. “We have vertically integrated customers with both cultivation facilities and retail use that are happy with Cova,” said a company spokesman. “We fill the gap for our customers who vertically integrated their operations with best-in-class partners like Flourish. We have out-of-the-box integration with them, so the manifest, inventory and product information flow through both systems automatically.”
Another thing that has changed for dispensaries during the pandemic is customer product preference. Since Covid-19 was a respiratory virus, vape products once again took a back seat. Although flower sales continue to be strong, even though that is an inhalant product, consumers opted for traditional over convenience. Also, since many people were no longer commuting and working from home, the need for discreet vape pens declined. This type of information about what customers are purchasing is critical to maintaining the right inventory, especially since some states don’t allow for normal retail promotional activity. Having a software program that can generate detailed reports helps a retailer make good purchasing decisions.
How cannabis companies respond to this crisis will be dependent on the tools they have chosen to work with. Since it doesn’t look like the pandemic is going away anytime soon, it’s critical to have retail software that is adaptable at a moment’s notice.
The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis