Covid-19 – Navigating Near-Term Disruption for a Better Future

The world we live in has been completely upended seemingly overnight. The social engagement changes we’re seeing now will linger—what and for how long remains the question. The innovative ways retailers are addressing the social distancing mandates, minimizing direct contact between employees and customers, and introducing new ways to transfer products demonstrates the industry’s resilience—but what are we learning through the experience?

If we take a step back, it becomes a bit more clear; the basic challenges haven’t changed, there are just now social health and safety complexities added to the mix of issues. The industry is experiencing how a single unanticipated issue can have a far-reaching impact on many aspects of business that can be devastating.

  1. High-touch

Those that venture into a dispensary for the first time notice, after which we become desensitized to, the number of added “points of contact” present in a marijuana product purchase when compared to any other retail, age-restricted product. The amount does vary based on state, county, and municipal regulations as well as individual operator policy, but it is safe to say that a compliant operation requires a minimum of double the “points of contact” compared to similar industries, and usually more. Think about it for a second—point of entry ID check, point of purchase ID check, point of payment (with card often requires another ID check), and point of product transfer – if we leave out typical purchase experience steps (showing and smelling), there are 4 touchpoints where there could be 1.

  1. Regulatory Compliance Overhead

Chain of custody, age verification, and physical security are familiar areas for dispensary operators, and the business processes these regulations require are at times burdensome, often costly. This commonly stems from environment uncertainty and a drive to err on the side of caution, correctly so—to a point.  There isn’t always harmony when regulation and the real world meet. This is highlighted when the status quo is disrupted—like now. Self establishing standards that exceed current regulations, improves operations and helps reduce unnecessary and excessive regulatory oversight (there are areas that are less familiar and often overlooked, even by marijuana regulatory authorities, we will cover in another post). Applying technology solutions that have been vetted in similarly regulated industries provides a foundation to guide and educate oversight and enforcement bodies that the challenges they’re trying to address have already been solved in more mature industries.

  1. Safety and Security Intensive

The unknown is one of the hardest things for we humans to manage, and we suffer the burden of intense “recency bias”.  Resulting in reactive decision making, which lead to narrow and unnecessarily restrictive solutions. If we again draw from the experiences of long-standing similar industries, we can land on more effective solutions. Consider banks and the risks associated with cash, alcohol sales with the risks associated with underage purchase and consumption, and both with the institutions’ responsibility to protect customer personal information. Yes, each industry has its unique attributes, but generally share a great deal of common ground. Historical success of security relies heavily on deterrence and prevention—in simple terms, make the probability of getting caught very high, and highly difficult for bad actors to succeed. However, the marijuana segment largely relies on a post-event methodology. Individualized digital recognition (not generalized scanning and profiling) has passed regulatory muster across industries whose standards far exceed those of the cannabis industry. This methodology enables a high standard of deterrence and prevention. It is time to consider applying that vetted know-how.

  1. Financial Hard Times and Crime

As if the day-to-day security challenges aren’t difficult enough, large-scale economic hardship comes with an increase in crime. Marijuana dispensaries in several mature markets have been experiencing an uptick in robberies, in spite of the current security measures in place. Given the designation as an essential industry, the severe economic impacts we’re experiencing, the cash intensity, and the value of the product on the black market, the marijuana industry is uniquely vulnerable. Implementing policies and operational measures that apply active preventative tools will not eliminate criminal activity, but the deterrent value far exceeds the measures in use today.  

Covid-19 has forced many industries to rethink how they do business, providing an opportunity to adapt and improve. The unfortunate reality is that those that don’t adapt won’t be able to compete in an increasingly efficient competitive market.

There is always a silver lining…it’s time to learn and act.

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