As the marijuana industry gears up for the biggest sales day of the year, retailers, point-of-sale (POS) and e-commerce service providers are working to avert another online disaster.
Operators nationwide have installed a series of measures – bolstering infrastructure, employee training, stress tests and other support mechanisms – to capture every retail dollar on Saturday, April 20, the most celebrated day of the year for cannabis enthusiasts and retailers alike.
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Last year, a cascade of failures between Dutchie POS systems and their retail customers’ e-commerce menus led to widespread outages affecting hundreds, if not thousands, of stores in the United States and Canada.
Cannabis retail workers told MJBizDaily the outages knocked out online menus, prevented adult-use consumers and medical marijuana patients from placing online orders and erased records of stores’ preprogrammed deals.
For some retailers, the online disruptions outshined long-planned celebratory events, product promotions and discounts, leaving operators frustrated and consumers confused.
History of outages
E-commerce and POS outages on 4/20 have become a near-perennial issue for the industry.
Shelly Hall-Crobar, owner of the Oregon-based POPS Port Orford cannabis store, has dealt with numerous IT outages on 4/20 over the years while working at various shops.
“I feel like 4/20 is just a colossal breakdown in every way,” she told MJBizDaily in a phone interview.
“We push the system to the absolute max and see if we can break it. And often, we do.”
Best sales day of year
Increased store and online traffic on April 20, 2023, pushed sales over $100 million in 10 states and four Canadian markets alone, according to Seattle-based cannabis industry analytics provider Headset.
Transactions peaked at $160,000 per minute.
The number of shoppers last year increased more than 120% compared to 2022, according to Oakland, California-based retail software company Treez.
The company, which serves more than 500 retailers with its POS, e-commerce and inventory-management software, predicts revenue this April 20 could be 2.5 times higher than in 2023 because the high holiday falls on a Saturday.
‘Efforts to stay ahead’
Tim Barash, CEO of Bend, Oregon-based Dutchie, said the company has been focused on meeting the demands of the industry’s busiest sales day since last year’s setbacks.
“Since then, we have redoubled our efforts to stay ahead of the industry’s scale,” he told MJBizDaily via email.
Dutchie’s POS and e-commerce software handles more than 1 million daily orders from more than 6,000 cannabis retail clients in the U.S. and Canada.
Its technology facilitates $14 billion-plus of cannabis sales annually.
“By far the industry’s largest provider, it is our responsibility to consistently improve performance to support our customers,” Barash added.
Up to five times more traffic
Jane Technologies’ POS, e-commerce and payment-processing services are utilized by more than 2,500 retailers, primarily in the United States.
The Santa Clara, California-headquartered company’s systems handle traffic on 4/20 that is three to five times higher than a typical day, according to CEO Soc Rosenfeld.
“Not only do we build things with scalability in mind,” he said, “but we go through extensive testing throughout the year.”
Rosenfeld said Jane Technologies runs stress tests during other high-volume sales days, including St. Patrick’s Day, Memorial Day, Labor Day, Green Wednesday (the day before Thanksgiving) and New Year’s Eve.
Those days of heavy retail traffic and demand help the company identify potential bottlenecks, application programming interface disruptions and other glitches, he said.
Like Cyber Monday or Black Friday
Jane Technologies, which launched on April 20, 2017, meets with every client leading up to the big day to ensure menus are built properly and connections and integrations work correctly, Rosenfeld said, adding that 4/20 should be a showcase for operators and vendors.
“It’s like Cyber Monday for e-commerce sites or Black Friday for brick-and-mortar retail,” he said.
“We should celebrate this plant on the day it should be celebrated and not get distracted by websites getting crashed. Let’s see if this industry can win on 4/20.”
Prepped and ready
In the event of a tech outage, retail teams at Kansas City, Missouri-based marijuana multistate operator Greenlight Dispensary have a system to record sales manually and with Metrc, the track-and-trace software required by several states.
In the event of a system outage, employees at Greenlight’s 32 stores in six states are trained to log handwritten paper sales as well as product information required by Metrc and state regulators.
Those sales sheets would then be passed to back-of-the-house staff to record in Metrc, as required by the state.
The records then would be manually entered into Dutchie to avoid double entries, explained Greenlight CEO John Mueller, who expects the cannabis chain to double sales this year with 4/20 occurring on a weekend.
The Dutchie outages last year slowed lines at Greenlight stores, but they didn’t disrupt sales or lead to business losses, Mueller said.
Retail systems optimized
Ann Arbor, Michigan-based C3 Industries, parent of High Profile Cannabis Shop, bolstered its tech infrastructure, increased server capacity and optimized system performance to handle the expected blitz of online traffic this 4/20.
C3’s 21 marijuana stores in Illinois, Massachusetts, Michigan, Missouri and New Jersey added POS terminals, express checkouts and support staff to handle the holiday rush.
The company, which is running deep discounts over two weekends, projects a 20% increase in customer visits and transactions, and executives are targeting a 25%-30% jump in sales compared to last 4/20.
“We expect the run-up to the actual 4/20 holiday to be significant,” C3 Chief Operating Officer Samip Shah told MJBizDaily via email.
In case of emergency
Some retailers, such as Gotham in New York City, are celebrating their first 4/20 operating in regulated markets.
The store, located in Lower Manhattan’s East Village, uses Dutchie’s e-commerce software, which experienced outages last year.
In preparation for its first 4/20, Gotham’s IT staff implemented emergency switches on its website to capture sales manually if the software falters and created guides for online customers.
The operator also has implemented other system backups if Dutchie’s POS system were to go down, including storing data in certain formats for easier migration.
“We’ve also built a pretty lightweight solution for our sales associates, so that their momentum isn’t slowed in case of high velocity,” said Owen Mizrahi, Gotham’s IT director.
“It’s our first year of operating, so we need to make sure that we have the systems in place regardless, and 4/20 is a really good touchpoint to double check we’re OK without any given service at any time.
“We’re ready to get rolling.”
Insulated from third-party outages
On the other side of the spectrum, Cresco Labs will ring in its sixth high holiday in the cannabis retail sector.
The Chicago-based MSO, which operates 72 Sunnyside stores across the country, tries to minimize third-party applications to avoid widespread glitches.
“We’ve invested in our own technology since Sunnyside launched to try and insulate us the best we can from third-party outages,” spokesperson Jason Erkes told MJBizDaily via email.
“This allows us to offer a more customized and enhanced experience for our shoppers, but (it) doesn’t make us immune from issues caused by heightened volume on days like 4/20.”
Retail operations checklist
In the run-up to high-volume transaction days, cannabis retailers should have a good understanding of several performance metrics from their tech vendors, advises Bobby Fikree, a principal partner at MacGyver Consulting, a Toronto retail marketing and e-commerce firm that works with 30-40 stores in the U.S. and Canada.
He recommends asking vendors to verify:
Uptime records, or the duration when computers or IT systems are operational. That percentage should be close to 100%.
Waiting-room accessibility and status for e-commerce customers to reduce transaction flow.
Test plans to handle various activity surges.
Fikree said operators in 2024 should focus on optimizing their e-commerce technology.
He estimates only 20%-30% of marijuana retailers made IT changes since last year.
“It’s not nearly as high as it should be, considering so many dispensaries went down last year,” Fikree warned.
“They’re just hoping that it won’t happen again this year.”
Emergency plans
Because of its isolated location along the rugged southern coast of Oregon in Port Orford – the most westerly town in the contiguous United States – POPS frequently deals with power outages and connectivity lapses from windstorms and rainstorms.
Ironically, last year marked the first time in several years that POPS owner Hall-Crobar didn’t have to address some technological setback on 4/20.
“I am, forever, planning for outages,” she told MJBizDaily in a phone interview.
The operator has implemented different procedures and responses per outage; one plan for phone connectivity, another for Wi-Fi and yet another for POS failures.
If the internet goes down, cellular hot spots are ready to support at least one computer via an iPad or smartphone.
During a total power outage, Hall-Crobar has recorded sales manually from her home or office in Montana, after they’re relayed from workers at the store.
Best-case scenario
With her store running so many sales and discounts on 4/20 – this year’s deals include $30 ounces and 50% off certain brands – Hall-Crobar ensures every budtender and checkout clerk has the deals documented on paper, along with the regular prices.
The redundancy also helps if a POS system crashes, an all-too-common occurrence on April 20.
“We’re pretty well-versed in outage situations, not just for 4/20,” Hall-Crobar said.
“The best-case scenario is we have all this stuff in place, and we don’t use one bit of it.”
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