The Cabbage Club: Next step in the state’s cannabis market
Discounts not permitted under Connecticut law but membership clubs and offerings are
Gone are the days of illicit, backroom weed sales. The legalization of cannabis has completed changed the way cannabis is sold and now one of Connecticut’s largest cannabis companies is inserting a new way of selling by launching a tiered, paid membership club.
While companies cannot offer cannabis-related discounts and promotions based on a new state law, this program is something that is allowed. And it also allows customers to do something they have not yet been able to do: Pay for cannabis with a credit card.
Verano, which owns the Zen Leaf-branded cannabis retail shops in Connecticut and the CT Pharma cultivation and processing facilities, is launching what it’s calling the Cabbage Club.
David Spreckman, Verano’s chief marketing officer, said it was the next phase in the cannabis market.
“If phase one was about establishing a footprint and creating storefronts, whereby you could introduce consumers and patients to cannabis products that they want across the states, I think that stage has in many states come to its completion,” he said. “We view this as the next iteration of not just how do you bring cannabis products to the customers or patients that want and need them but how do you create something more than that.”
Spreckman said the goal is to “go beyond just the transactional of, you want cannabis and we’ve got it, and create something bigger, deeper, more meaningful, that we can take and scale into the future.”
Paying for cannabis with credit
For $149, “founding members” get a $10 monthly store credit every month and $25 worth of coupons seasonally. Those benefits double for $249. Members also get early access to new products, line-skipping privileges and other perks. Verano believes it will allow members to recoup more than the annual dues in cash perks alone
Despite its growing legality, credit card companies have been so far unwilling to allow cannabis charges.
But buying into the Cabbage Club is not a cannabis purchase, even though customers will be using their rewards to buy cannabis.
“You can pay for the club with a credit card, and you receive credits as a result, so you can imagine that as we’re able to morph this program, we’re looking to find new and better ways to create a frictionless customer experience more akin to what you might see within Amazon Go or just, frankly, the retail experience more generally using other forms of payment,” said Verano President Darren Weiss.
“There are just a lot of friction points in shopping for cannabis. You’ve got to show an ID when you get there. You’ve got to get in the line. You can sometimes pull out cash from an ATM machine,” Spreckman said. “It becomes this clunky experience and while I think patients and consumers have become accustomed to it, I think there’s opportunity we’ve identified to reduce that friction.”
Discounts and promos
Every email cannabis retailer Budr sends to its customers contains two disclaimers. One is a reminder that cannabis is legal only for residents 21 years and older.
The other, according to Budr founder Carl Tirella, says, “This is not an inducement to purchase cannabis or cannabis products. It’s solely for savings.”
That disclaimer is the result of a law passed this year by Connecticut legislators prohibiting cannabis discounts and promotions.
“We do think that it prohibits retail establishments like carousels from being able to be competitive with other states and maturing in the right way,” Tirella said.
The legislature’s General Law Committee Chairman Mike D’Agostino, D-Hamden, said earlier this year that, “We’re not entirely sure we want the cannabis industry to turn into, like, clipping Sunday coupons.”
Fine Fettle uses a disclaimer similar to Budr’s and both Budr and Fine Fettle, among other cannabis retailers in Connecticut, will send customers who have opted in “special discounts and birthday promos and all that type of stuff,” Tirella said.
Ben Zachs, a Fine Fettle executive, said such measures are intended to help the market grow.
“Companies are figuring out ways on how to ensure the Connecticut market can be competitive for consumers, considering we have fewer products and have more expensive prices,” he said. “For this market to thrive, we need to make sure that customers have places, things, and costs that make sense for them when cannabis is all over the place, New York, Rhode Island, Massachusetts and the legacy market.”
Verano’s Cabbage Club takes that concept one step further, by encouraging customers to pay for those promotions and, because customers are joining a club and not paying for cannabis, it’s replicable in every state.
The only difference in Connecticut is that customers won’t get a cookie.
“Our goal for the program was that every time a Cabbage Club member walks into a store, once they identify themselves as such, they are given a warm chocolate chip cookie,” Weiss said.
But Connecticut law prohibits cannabis retailers from distributing non cannabis food items. So while Verano is launching the Cabbage Club in Maryland, Michigan, New Jersey and Illinois, only those in Connecticut will be cookie-less.
“In our other launch markets, you will receive a warm chocolate chip cookie when you come in, free of charge,” Weiss said.
“If phase one was about establishing a footprint and creating storefronts, whereby you could introduce consumers and patients to cannabis products that they want across the states, I think that stage has in many states come to its completion.”
David Spreckman, Verano chief marketing officer