Arizona Cannabis Retailers Reflect on First Week of Adult-Use Sales
Arizona launched its first adult-use cannabis sales Jan. 22, with the state’s mature medical cannabis industry—which was legalized by a voter-approved initiative in 2010—pivoting quickly to meet the demands of a broader consumer base.
The Mint applied for adult-use licenses at its dispensary locations in Mesa and Tempe when the application became available Jan. 19.
“[Regulators] were saying it wasn’t going to take until March to make a decision, that once you applied and put in all your paperwork for your rec license, as long as you had enough employees to be able to service [the adult-use market] and you had all the requisites, they were going to process [the application] in two to three days,” says Raul Molina, The Mint’s co-founder and chief operating officer .
Around midday on Jan. 22, The Mint received word that its adult-use applications had been approved, and it immediately sent text and email notifications to its customer base, announcing that it would launch its first adult-use sales at 4:20 p.m. that same day. As soon as the alerts went out, Molina says people started showing up, and the dispensaries had lines around the building by 1 p.m.
Arizona is currently experiencing a cold snap, Molina says, with rain and temperatures in the 40s, but the bad weather has not deterred customers, who continue to line up at The Mint’s dispensary locations.
“The crowds have been incredible,” Molina says. “It feels like a party atmosphere. There’s music playing. Everybody is getting along and sharing stories of what they’ve tried or what they’re going to try. People are coming out and talking about what they bought.”
Customers have been wearing masks and social distancing to combat the ongoing COVID-19 pandemic, he adds, and The Mint has been working hard to ensure it maintains enough product for its medical patients.
“We don’t want to forget who brought us to the party,” Molina says. “We’ve been medical for 10 years.”
The Mint has two lines—one for medical patients and one for adult-use customers. Generally, there is no wait for medical sales, Molina says, while adult-use customers can expect wait times of up to an hour and a half.
Curaleaf, which has been operating in Arizona’s medical market since 2011, also launched adult-use sales Jan. 22 at its eight dispensary locations across the state, and Steve Cottrell, president of Curaleaf Arizona, says line management has been one of the company’s biggest challenges over the past week.
“We typically don’t see a line every single day, and that’s something that we’re experiencing daily now,” he says. “It’s a big win for us, we’re very excited to have that, but it’s something new.”
Like The Mint, Curaleaf has two lines—one for medical patients and one for adult-use customers—and it has many standard operating procedures in place to help get patients and customers through the store quickly. The wait time at its locations has typically been 20 to 30 minutes, Cottrell says.
“Our teams are very efficient,” he says. “We have several stations, and our budtenders are very quick to respond, so we get people through the line quickly.”
Curaleaf encourages its customers to use online ordering while they wait in line to ensure their order is ready for them when they reach the register. All customers still get one-on-one time with Curaleaf’s budtenders to ask questions and get product recommendations, Cottrell says, even if they have already placed an online order.
“One of the things we’ve encouraged is you place the online order right now,” he says. “You may not know what you want, but you know you want an edible, a concentrate, a vape or a topical—just lock one of those in. Then, they can come in and they can experience the full thing. We know they wanted a flower, or we know they wanted a vape cartridge—great. Here are all of our vape cartridges laid out for you, or here are all of our strains laid out for you. It gives you an opportunity to shop, but it also gives our budtenders a little bit of a heads up of what they’re coming in for on the front end, so they know how to sell better.”
Curaleaf offers discounts to its medical patients, and sent out a text message alert before launching adult-use sales, which encouraged many patients to stock up on products ahead of time to avoid the crowds.
The Mint also offers medical-only specials, including buy one, get one free deals, discounts on certain products and a daily pre-roll promotion where medical patients can stop by for a free pre-roll from 4:20 p.m. to 7:10 p.m. each day.
“We do that a lot because we know there are a lot of patients who would come in and not have the money to buy their medicine for the day, so we just started our program of one free pre-roll per day,” Molina says. “That’s still there for the medical patient, where the rec customer isn’t getting all these extra perks that we’re going to keep around for the medical patient.”
The Mint set aside product for its medical patients to ensure it would have enough supply for that side of the market, but, so far, Molina says product shortages have not been an issue.
“There isn’t quite a shortage of supply just yet,” he says. “Maybe as more [dispensaries] … come online and start selling rec, that might change, but as far as us up here at The Mint, we were planning for it.”
Molina estimates that only about 25 to 30 of Arizona’s roughly 130 medical dispensaries opened for adult-use sales upon receiving final approval Jan. 22.
The Mint, which is vertically integrated with a cultivation operation, also buys cannabis wholesale from other vendors, and Molina says the company stocked up in advance to have what he thought would be enough product for the first two to three months of adult-use sales.
“It looks like it’s going to be closer to a month or a month and a half with the current coverage, but, so far, nobody has told us that it won’t be available,” he says.
Curaleaf has not experienced any supply shortages yet either, due in part to its vertically integrated business model and its partnership with other vendors in the state, which allows the company to purchase products wholesale from other cultivators and manufacturers.
Cottrell says Curaleaf has been preparing for the expanded market since September, even before voters approved Arizona’s adult-use cannabis legalization measure in the November election, to ensure the company has enough supply to meet adult-use demand.
“We saw the writing on the wall,” he says. “We saw the path that we were going with the [Prop.] 207 campaign. We were having a lot of success.”
Curaleaf doubled the size of its Arizona-based cultivation operations over the course of the past year, and renovated four of its dispensary locations to add more registers. The company also implemented a new point-of-sale system just five days before launching adult-use sales.
“Curaleaf is incredibly well-structured, and … being able to do things like this is just second nature for us, so we’ve really been able to … make things happen quickly,” Cottrell says, adding that the company made a similar transition from medical to adult-use sales in Illinois just last year.
Adults 21 and older are allowed to purchase up to an ounce of cannabis per day under Arizona’s current adult-use regulations, but Cottrell says Curaleaf’s customers typically have not been maxing out their daily allotment, instead buying an average of four or five eighths at a time.
Flower is Curaleaf’s best-selling product in the adult-use market, Cottrell says, making up roughly 59% of the company’s sales.
According to Molina, The Mint’s medical cannabis patients typically split their purchases fairly evenly across the dispensary’s product categories, with flower, edibles and concentrates each making up about a third of the company’s sales. The Mint’s adult-use customers, however, seem mostly interested in flower and edibles, with concentrates sales lagging behind the other two categories in the non-medical market.
So far, The Mint has roughly tripled its sales since launching adult-use, and Molina says the company began preparing for the increased sales volume nearly two years ago, when it expanded its flagship location in Tempe from 3,000 to 12,000 square feet, and from 10 to 21 total registers.
The Mint completed a large hiring initiative a little over a month ago, and spent roughly three weeks onboarding and training new retail staff members to interact with patients and adult-use consumers.
“For probably the last few weeks, we’ve had kids tripping on top of each other because we had so many people here and it didn’t really make sense,” Molina says. “Now that we went rec, it makes all the sense in the world. Everybody’s on a register and we’ve done well.”
So far, Molina says The Mint’s biggest setback has been not stocking up on enough water for its employees.
“I bought a pallet of water, and apparently that wasn’t enough to keep everybody hydrated,” he says. “But the problems we have had have been minimal, and not really operational or to the point that they’re affecting the patient or the customer.”
The Mint plans to open a third store by the middle of February, and its focus continues to be the medical patients who helped the company find its early success in the Arizona market.
“The biggest thing is we don’t want to forget who brought us to the party and who we’ve been servicing for the past 10 years that have allowed us to keep our doors open,” Molina says. “That’s the biggest thing—we want to make sure we keep taking care of medical.”
Curaleaf also plans to expand in Arizona, with two more stores expected to open this year.
“We’re very excited about this opportunity to serve the customers in Arizona,” Cottrell says. “As is with all states when adult-use happens, it’s an amazing opportunity for us. We’re doing all we can to make the cannabis industry look first-class, and we’re keeping everybody medicated and giving them the best service possible. »