While much of the food and service industry took a hit during COVID-19, the cannabis home delivery industry was only firing up.
Despite the federal government’s continued ban on marijuana, cannabis is big business in the U.S. The total U.S. economic impact from marijuana sales in 2021 is expected to reach $92 billion – up more than 30% from last year, according to MJBizDaily.
Jamie Steigerwald, chief marketing officer of Nug Avenue, a cannabis home delivery service in Los Angeles, California, said that in many ways COVID-19 gave the industry a boost.
“COVID-19, particularly in California, made it hard to get out. When the state labeled it an essential service, cannabis companies could continue to operate. It added a legitimacy to it,” said Steigerwald.
There are many restrictions on where dispensaries can operate, he said, and home delivery provides a more convenient and safer way for people to get their products. Steigerwald explained that, from a marketing perspective, it is really challenging to get people to change behaviors, but COVID 19 not only changed behaviors, it also changed the culture.
“COVID made home delivery more mainstream. It marked a shift in how we get our goods generally. Now that habits have changed, it will likely stay this way,” he said.
According to an article in High There, the cannabis home delivery sector promises continued growth and revenue. Nug Avenue first tapped Steigerwald, who had decades of experience as a business leader in the gaming and mortgage industries, to help with marketing temporarily, but Steigerwald became fascinated by this booming industry and decided to stay on permanently.
“My role as CMO is evolving, but my goal right now is to lay a foundation for growth,” he said. “We are probably in the most competitive market in the U.S. right now, and traditional marketing avenues are not available online for this industry. This has to be a grassroots, bootstraps kind of marketing.”
Steigerwald has always believed that his business endeavors should be community focused. While on the one hand, COVID-19 boosted cannabis home delivery, it also tied his hands when it came to community engagement. Concerts, festivals, and events such as traditional meet ups that can help build a sense of community simply could not happen during COVID, he said.
Marketing isn’t the only hurdle facing cannabis home delivery companies. As CMO of Nug Avenue, Steigerwald understands all these challenges. Every aspect of the industry is highly regulated with complicated legal and licensing issues to navigate. Most of which vary city by city, county by county and state by state.
“This is not the time for the small entrepreneur to enter the industry,” he said. “Don’t even think about it unless you have a niche and the budget to get through all the regulatory issues. Wait for federal legalization.”
Steigerwald notes that we are a long way from the Reefer madness and the Nancy Regan “just say no” days of the 1980s.
“Cannabis is far and away more accepted now,” he said.
In fact, NBC News reported that support for the legalization of weed has risen from just 12 percent in 1969 to 68 percent in 2020.
Even with the growing support for legalization, Steigerwald said there are still some common misconceptions about the cannabis home delivery industry.
“I think there is still a perception that this industry is a little bit shady or run by gangs,” he said. “That’s a misconception.”
Steigerwald explained that the Nug Avenue delivery person is a well-mannered, well-dressed person. “The driver is not going to ask to hang out and try the product with you,” he said. “Home delivery is a safe and discreet way to get your cannabis.”
It’s also quick.
Steigerwald said that a top-tier delivery service could get a product to the customer’s door in 30-40 minutes. Even if a delivery giant like Amazon got into the business, a 2-hour delivery window is simply too slow, he said.
Nug Avenue takes the home delivery model a step further and provides customer support over the phone to help people just getting into cannabis select their product. Steigerwald said that just as there are lot of ways to consume cannabis, there are lot of reasons to consume it—whether medical, as a sleep aid, or for relaxation. These phone experts, called “budtenders,” are available to answer questions and help customers choose which products are right for them.
Steigerwald sees the cannabis home delivery industry continuing to grow as attitudes towards cannabis continue to change and more states, and eventually the federal government, move towards the decriminalization of marijuana.
“I think we will see a lot more mainstream adoption that will set it on par with alcohol. But, unlike alcohol, there is an actual medical benefit,” he said.
For now, Steigerwald and Nug Avenue continue to look ahead—and expect the continued change in both attitudes and laws around cannabis will help companies like Nug Avenue bring cannabis home to more people.
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