“A Hybrid Between Sephora, Whole Foods And Blue Bottle”: Cannabis Now Brings CBD Retail Into The Experiential MomentJune 30, 2019
When the publication Cannabis Now started nearly a decade ago, marijuana wasn’t legal for general use in a single state and CBD was more likely understood to mean central business district than cannabidiol. Today, its print publication is available at Hudson News locations in airports across the country, 11 states have permitted weed and CBD is in everything from cocktails to eye cream.
Cannabis Now is taking the next step in following the cannabis plant into the mainstream with a new roughly 3,000-square-foot store in the Los Angeles shopping center Beverly Connection, where it’s nabbed a place in the directory along with CVS, Nordstrom Rack, Johnny Rocket’s, Old Navy, Yogurtland, Target and T.J. Maxx. The store is part of a company diversification program that’s expected to expand to an e-commerce platform and a dozen units nationwide within two years. In April, Cannabis Now closed a seed round for an undisclosed amount led by Tress Capital to fund store growth.
“We realized investors weren’t very excited about a print magazine,” says Eugenio Garcia, CEO and founder of Cannabis Now. “We had to go back to our core mission of education, health and wellness, and say, ‘OK, where’s the opportunity? Where are people not getting what they need in this space?’ Over the years, we have enjoyed great relationships with all the leading brands. We were able to identify that the future of the cannabis space is in products and brands.”
In many ways, Garcia is uniquely positioned to create a concept mixing commerce with information and entertainment. Prior to beginning Cannabis Now, he spent a decade working at Whole Foods Market in several departments, including the Whole Body department, and considers former Whole Foods co-CEO Walter Robb a mentor. He also established vegan condiment brand Montana Mex with his brother Eduardo. At Cannabis Now, he has upped the entertainment quotient to engage the cannabis curious with activations such as one held over two days at South by Southwest visited by 8,000 people.
“Especially when they are buying new products and want to learn about CBD, a magical ingredient that they don’t know much about, they need an environment where they feel comfortable browsing.”
At the store, which debuted quietly last month prior to officially opening with a kickoff party on June 15, Cannabis Now fuses the various arms of its operations. “The day we opened, our editor was here on the floor talking to the employees about the different products and was available to customers while they were shopping,” says Garcia. “Whether in an online expression, video content or entertainment, the editorial speaks to them and the [store] team members, who speak back to the editorial team, and we all speak to the community. It’s a cohesive dialogue, not one-way preaching.”
At the epicenter of two dying industries—retail and media—he’s not afraid to make a call about their mortality. Retail is decidedly not dead, determines Garcia. It just isn’t the same as it was at Whole Foods pre-Amazon. Garcia explains, “People do want to buy products online and to have the quickness of that. Let’s say they are on vacation and lose their favorite lipstick, they want to go online and get it, but, especially when they are buying new products and want to learn about CBD, a magical ingredient that they don’t know much about, they need an environment where they feel comfortable browsing.”
Still in its infancy, the CBD retail landscape has few stores that are inviting for average consumers. Garcia describes Cannabis Now’s target shopper as an affluent woman aged 35- to 65-years-old. He labels her the “chief buying officer” of her home and says she “cares about beauty, the environment and wellness, and is receptive to learning about cannabis.” If she’s seeking CBD in the Los Angeles area, Garcia estimates there are 150 stores carrying a smattering of CBD products. Most are mom-and-pop shops littering a few CBD products amid pipes and patchouli oil. At the other extreme, there’s Barneys New York’s luxury head shop The High End, a bastion of pot paraphernalia for the super wealthy capable of forking over almost $1,000 for blown-glass bongs. Neither sort of store is a fit for the professional woman-soccer mom type squeezing in Pilates before dinner and CBD drops before bed.
“The retail is how we best support consumers by giving them the products that are best for them. The licensing is a tool to partner with the strongest partners in the world, and the media is the special sauce that allows us to truly understand the space we are in.”
Garcia characterizes Cannabis Now’s store as “a hybrid of Sephora, Whole Foods and Blue Bottle.” It has considered design—white walls and marble countertops, polished concrete flooring and floor-to-ceiling windows—a flair for showcasing trendy offerings to encourage discovery and a customer service approach that’s intent on filling customers in on items they are often unfamiliar with. A terpenes installation welcomes people to sniff a handful of cannabis terpenes responsible for the smell of the plant. In the evenings, the store becomes an event venue for panel discussions, meetups and product launch festivities.
Together with Garcia, Cannabis Now retail director Louis Terline, co-founder and creative director of Oak, chose around 40 brands for the store. Garcia figures the number of brands will increase, however, 40% to 50% as Cannabis Now gets a sense of the products that perform. Among the beauty and wellness brands currently stocked are Saint Jane Beauty, Apothecanna, Vaital Organics, Mary’s Medicinals, Wildflower, Wellness CBD and Select Oil. None of the products contain THC, and a lot don’t even have CBD. Non-CBD brand Malin + Goetz, for example, has an ample presentation at the store. Topical products join vape pens and CBD beverages in the assortment. In the early going, basket sizes are typically topping $125.
Eventually, Garcia anticipates revenues from Cannabis Now’s retail to surpass those from its media enterprise and licensing division, which strikes deals to lend its mark to brands and forge merchandise collaborations. He says, “What it comes down to really is the retail is how we best support consumers by giving them the products that are best for them. The licensing is a tool to partner with the strongest partners in the world, and the media is the special sauce that allows us to truly understand the space we are in.”