Given all of the unexpected circumstances of 2020, virtually every company — in every industry — is undergoing some level of change. From rethinking how their businesses are run, to reevaluating which strategies are going to be effective moving forward, there’s a lot for business owners to think about in 2021.

The cannabis industry has not been exempt from the impacts of the COVID-19 pandemic, and despite the development and distribution of new vaccines, many are still wondering what recovery could look like.

In October of last year, BDSA forecast Canada’s cannabis industry revenues will total $2.5 billion (CAD$3.3 billion) in 2020 and will reach $6.1 billion (CAD$8.1 billion) by 2025, a CAGR of 20 per cent. Combined sales in the adult-use channel by private sector retailers in Alberta and British Columbia reached CAD$888 million in 2020, with monthly sales peaking at over CAD$100 million in December.

But, as with all things in the cannabis industry, there is an added layer of complexity to this sales data. First, we have to take into account the changes in consumer behavior in which the pandemic served as a catalyst.

According to BDSA data, delivery and curbside pickup grew significantly in the early days of the pandemic, fueled by regulations and consumer preference for contactless purchasing options. While the temporary shifts are to be expected, looking at the long-term effects of the pandemic is more intriguing. Curbside pickup has settled back down to just a couple of percentage points of share of the overall transactions, but the delivery component remained at a more elevated rate. This indicates a shift to an online, instant gratification consumer behavior that was not started by the pandemic, but was actually well underway before the pandemic began.

So, what does this mean for the future of brick-and-mortar cannabis retailers?

Like in other industries, cannabis customers turn to brick-and-mortar retailers for the things that an online channel cannot provide: experiences, education and community engagement. Cannabis is a passion-based industry, so consumers are looking for opportunities to share that passion with others by being exposed to and trying new products in-store.

Edibles are the perfect example of this. In fact, the top two purchase drivers in this category are taste/flavor and brands the consumer has used before, which are virtually tied for Canadian consumers. This indicates potential barrier retailers need to overcome with getting their customers to try new products, which is well-suited for the in-store experience.

In Canada, 14 per cent of cannabis consumers said they make purchasing decisions based on the recommendations of their budtenders, a lower percentage than the U.S., where 22 per cent of consumers look to budtenders for purchase decisions. Understanding the occasions that consumers are looking to satisfy with cannabis is important for understanding how and why they are shopping for cannabis. Then, budtenders can leverage their brand familiarity to describe the flavor and effects of a product to overcome the barrier some customers have with trying new products. The opportunity to have that one-on-one conversation with the cannabis experts who are employed at the store, being able to see (and maybe not touch), but at least somewhat get up close and personal to the product and really look at it, helps the consumer become a bit more comfortable making those new purchases. This type of interaction simply cannot be replicated online.

Additionally, changing consumer demographics mean that there is not a one-size-fits-all approach to meeting customers’ needs. As consumer demographics continue to evolve, retailers will require an even more personalized approach to their interactions. Consumer segmentation is really the heart and soul of any passion-based industry, it’s what sets specialty retailers apart from the competition. Applying those segmentations, based on attitudes, beliefs, behaviors and needs of consumers, will allow retailers to tailor their products and service to enhance their customers’ experience within the store. This experience-driven approach will be key to brick-and-mortar’s longevity.

As more and more of the population receives their COVID-19 vaccines, which hold the promise of a return to “normal,” brick-and-mortar retailers need only to leverage their strengths to ensure their customers make a swift return as well.