Lisa Hurwitz had only been with Grassroots for 18 months when the coronavirus pandemic rocked cannabis businesses nationwide.
Like other pot professionals, she had to pivot almost overnight when shelter-in-place mandates were ordered. Shoppers were no longer able to stroll into stores with cash in hand.
For Grassroots, this was a problem: 80% of its sales transactions occurred in-store. So the Chicago-based company needed to up its digital game.
Hurwitz led an effort that essentially flipped the operation to 75% online. And it worked. Grassroots recently reported a 50% increase in sales since the pandemic began earlier this year.
What was previously an anomaly for a cannabis company like Grassroots is now a new normal: e-commerce cannabis.
"COVID-19 has accelerated the digital and online shopping experience," Hurwtiz, 43, said. "We anticipate this behavior to remain for many consumers even as states start to open back up."
Hurwitz, Grassroots' chief innovation officer, spoke to Benzinga about the hustle leading up to — and including — the transition, and why the new strategy is here to stay even as more state governors permit certain counties to open.
How did your team react at the onset of the pandemic?
Our first response was actually a sense of calm and focus. In every state Grassroots operates, cannabis was deemed an essential business and our dispensaries were able to stay open for both recreational and medical sales. On the cultivation side, we were also able to remain open in all states where we have facilities. But we also needed to understand the unique nuances of each state’s rules in order to [enact] our operating changes and plans. Once we understood the new landscape, there was a sense of camaraderie.
It was all-hands-on-deck across the company. We remained laser focused. Our immediate mission was to implement the necessary protocols and precautionary measures to keep customers and employees safe. We did this swiftly, addressing our dispensary staff first with masks, temperature checks, cleaning protocols and other measures to keep our staff and patients safe.
What does it mean to be digital forward?
Now more than ever, people are glued to their devices. And the cannabis category has traditionally lagged behind in digital channels. At Grassroots, we have operations in 12 states, with five cultivation centers and 31 dispensaries now open. And every state operates almost like a different country. So, the need to connect our dispensaries and our cultivation operations on an integrated data platform was paramount.
When I arrived at Grassroots, one of my first orders of business was to invest in a business intelligence platform to centralize all of our communication and proprietary data. With the help of Big Chalk Analytics, we built a digital infrastructure that enables us to seamlessly pivot our business and adjust communication internally and externally, especially now during this unprecedented time. We can communicate with our customers in various states to share inventory updates, new products, promotions, top picks from our staff and many of the other ecommerce messages that consumers are used to seeing.
On an operational level, our digital infrastructure allows us to see daily sales data, inventory and supply updates, determine product promotions and offers with our retail partners, and service patients and customers through customer relationship management, all on a timely basis, and all digitally — which has been a game-changer in the cannabis space. Additionally, our centralized CRM, revamped websites and online ordering capabilities allowed us to quickly and easily convert in-store traffic to online traffic.
Did Grassroots have to make cuts?
In April, we had to furlough some of our team as the business changed rapidly and demanded different skill sets. Due to federal guidance and state-mandated shelter-in-place orders, all of our planned in-person events were canceled and put on hold. So, staff focused in these areas were furloughed, which was an incredibly difficult decision and hopefully one that will be temporary. When and where possible, we have been able to retrain and move employees to positions in our facilities, on our digital team and within our customer service centers to meet the needs of our increased online business and to provide curbside pickup at key dispensary locations. Beyond retraining and moving staff [and] we have a few exciting areas of growth and hiring.
Is Grassroots expanding?
Due to the influx of incoming questions from our patients and customers, we are strengthening our customer service and customer experience capability to be able to address numerous requests. We are averaging over 6,000 calls a week on everything from product and dosage recommendations to new category customers looking to cannabis as a desirable alternative to pharmaceuticals to alleviate stress and anxiety. And we are looking to expand this customer experience capability digitally in new ways and into new formats.
In addition, our cultivation expansions have offered us an opportunity for growth. We have been able to move forward with the planned expansion of our cultivation centers in Illinois and Pennsylvania and we recently completed a 20,000-square-foot expansion of our Taneytown, Maryland cultivation facility. We are hiring for positions in all departments including sales, cultivation, processing, harvest, trim, packaging and security. Lastly, we will be moving forward with dispensary openings in states where we have received necessary approvals.
With the U.S. unemployment rate now at 14.7%, can companies like Grassroots represent a huge opportunity?
All of these openings will require new dispensary staff and we are excited to welcome workers from other service industries that have been hard-hit — like restaurants and bars – into the cannabis community. We have already seen a surge in job inquiries from furloughed and laid-off restaurant staff and bartenders, as cannabis dispensaries are a service industry that require a similar skill set.
Do you anticipate any future behaviors of the cannabis marketplace changing?
Cannabis being deemed an essential business is helping to reduce the stigma. There is more acceptance of cannabis and more people are also coming to the category looking for an alternative method to pharmaceuticals.
A plant-based medicine that helps alleviate stress and anxiety is needed right now, and this is going to carry over. People are going to continue to see cannabis as essential to their lives. Operationally we have seen a dramatic increase in online orders, and people are quickly taking advantage of curbside pick-up and cashless payment services like CanPay. This behavior will likely last, which has made us invest in our online customer experience as we anticipate this will remain a preferred shopping method.
Parts of the country are attempting to reopen. What happens to the new Grassroots model? Will it last after the coronavirus?
Cannabis, like many consumer product categories, has become an omnichannel experience where digital, content and both the online and in-store experience continue to blend.
COVID-19 has accelerated the digital and online shopping experience. We anticipate this behavior will remain for many consumers even as states start to open back up. The ease and speed of the online ordering platform has value for many that will continue long beyond the COVID crisis.
We know some patients and new consumers will want to return to the high-touch, in-store environment, so it will remain important for us to provide both: a high-touch experience online and in-store to meet the needs of our patients and customers wherever they engage with our brand.
Lisa Hurwitz. Courtesy photo.