What Cannabis-Buying Apps Mean for Consumers and Retailers
And how will this affect smaller, less tech-savvy independent shops?
Not long ago, the cannabis and tech industries were abuzz with the groundbreaking news that Apple would allow cannabis-selling apps into its App Store, under certain guidelines.
The new policy was announced as part of updates to Apple’s App Store Review Guidelines, and marked the very first time that one of the biggest leaders in tech Big Tech brought forth explicit changes that sanction the legal cannabis market on its platform.
(Before this shift, cannabis app users were redirected to a web-based service to complete their sales and delivery.)
This has been heralded as a major move towards federal legalization. Just as importantly, it is a huge victory for both consumers and businesses of all sizes.
Why this matters
Recent analysis from tech company jmango360 reports that 70% of Americans have smartphones, and 50% have tablets.
Those two categories drive more than 70% of all digital traffic in the United States.
Moreover, they said, “recent research shows that 90% of their mobile time is spent in apps, and only 10% browsing the rest of the internet. In the ecommerce space, the contrast is even more glaring” — mobile app users spend twice as many minutes per month shopping compared to website users.
This means a whole new experience for many cannabis sellers and buyers. Here are a few of the key differences in what this means:
- Consumers can know that they are buying from a properly licensed entity. This is a win-win for the industry: on the buy side, the customer knows that their purchases have passed all state compliance requirements. On the sell side, this requirement serves to support and promote the legal cannabis industry. This is important in large markets like California, where large cities like Los Angeles are constantly battling the immense black market.
- Delivery apps have the potential to offer a smoother, more intuitive shopping experience than the mobile web. Elements like intuitive searches, favorites, customer profiles, loyalty programs and other most popular features can be best delivered through the native technology found within the app world.
- Geofencing is one of the main criteria for an app to be allowed into the Apple store. This means that there is a bounded area from the area the app operates, and which can only be seen by Apple customers in the same area. This serves customer convenience by offering apps that are legally allowed in the user’s area and making their app-shopping experience more efficient.
- Many cannabis companies had been anticipating that one of the major app stores would eventually loosen its restrictions to allow full-service cannabis sales/delivery and are right now developing apps that will be in competition within the same geofenced areas. This creates greater competition among the sellers to attract and retain new customers.
Elevating the technology
- An open, competitive market in the development of this new category of cannabis apps will create more innovation of the tech capabilities of shopping apps overall.
- In allowing these apps, tech behemoths like the Apple Store now have a vested interest in making sure the apps offer safe and secure ecommerce built with cutting edge technology not as effective on web-based services. This makes them unlikely supporters of groundbreaking legislation like the SAFE Banking Act, considered by many in the industry to be one of the last institutional obstacles to federal legalization.
Potential risk for retailers
On the other hand, the business that are most at-risk are the “traditional” retailers: brick-and-mortar establishments that likely have the narrowest delivery area and, from what we’ve seen on the tech side, have been the slowest to embrace online sales (other than as a pandemic-era accommodation).
One concern I’ve heard is that a massive influx of Big Tech is largely driven by huge delivery services and other chain businesses, which can freeze out smaller businesses by inhibiting their growth.
Would the incoming assortment of apps from established and well funded delivery services create a Walmart/Amazon effect that hurts and ultimately drives out smaller retailers?
In my opinion, that threat is also a key asset.
The geofencing requirement, for instance, will place single-location dispensaries side by side in the consumer’s eye line with major players with statewide coverage.
This can be a great equalizer where smaller businesses are given equal real estate in the search for customers.
One thing is for certain: that mobile app use is the future of consumer behavior, in cannabis as well as any other retail industry and we are just seeing the tip of the digital iceberg in what’s next.