The Importance Of Trust In The Cannabis Industry, According To Caliva's CEO
This special presentation from Caliva is from Benzinga’s June 1 Virtual Cannabis Capital Conference. Click here for more coverage of this event, with presentations from some of the top CEOs, investors and lenders in the cannabis space.
The path toward upward economic mobility can seem murky for businesses during the coronavirus pandemic and is changing the way they operate.
Dennis O'Malley, the CEO of California-based cannabis company Caliva, spoke about how his company is navigating the uncertainty of 2020 at the Benzinga Virtual Cannabis Capital Conference on Monday.
“We’re never going back to what it was, there will be a new normal going forward,” he said.
Caliva's CEO On Consumer Confidence
Over 40 million Americans have filed for unemployment as a result of government lockdowns.
This has greatly affected consumer confidence as consumers continue to save more and spend less, O'Malley said.
“Consumers these days are more intentional as to where they spend their dollars.”
The importance of where a product is coming from, the conditions under which it is made and the moral and ethical backbone of a company are being taken into more consideration than just the product being sold, the CEO said.
For Caliva, this shift has materialized in a 40% increase in new daily consumers. The company has also observed that 74% of online customers are purchasing from their phones, O'Malley said.
Changing Cannabis Business Models
Consumer behavior has changed rapidly, Caliva's CEO said.
Curbside pick-up was essentially obsolete before the pandemic, but surged as self-isolation began. For Caliva, this delivery model will be a big part of the business moving forward, O'Malley said.
“90% of the off-premise sales in restaurants came from carry-out or drive-thru, and it's an analogy that we can all use within cannabis.”
According to research gathered from Caliva’s team, 12% of Americans smoke cannabis, but there are many more that are interested in seeking plant-based solutions.
In a cannabis culture poll, one in three non-cannabis consumers in the U.S. reported being curious about trying it, O'Malley said.
“We think the long-term largest opportunity in cannabis is finding this new consumer and earning their trust and keeping this.”
O'Malley stressed the importance of trust between the company and the consumer, especially in the cannabis industry.
One way the company has worked to earn this trust during the pandemic is by providing virtual wellness consultations to consumers, he said.
The consumer journey is full of friction, which is why virtual consultations are extremely helpful, the CEO said.
Experts can help answer common questions such as: “Is this safe? Where is the product made? Who can I talk to? How do I buy it?”
Consumers want to be able to take control of their natural wellness, and cannabis plays a significant role in these lifestyle changes and priorities, O'Malley said.
Cannabis: From Illegal to Essential
Trust is also necessary now more than ever in the industry as cannabis has shifted from illegal to essential, the CEO said.
"But there’s nothing that’s accelerated the consumer journey of feeling confident about purchasing cannabis and trying cannabis than the government and regulatory framework of implicitly endorsing cannabis by calling cannabis 'essential.'"
The trust and transparency behind Caliva's products is the wheel of success for the company during turbulent times, he said.
“Values today matter more than they ever have before.”
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Photo courtesy of Caliva.
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