The long-awaited day has finally come and gone.
After two decades of a semi-legal, largely unregulated medical marijuana industry, California ushered in a new era of cannabis legalization with a massive — albeit limited — celebration on New Year’s Day. Other states have paved the way, but this was different as a state with 40 million residents now allows adults to walk into a cannabis shop and purchase their recreational or medicinal product of choice — no medical authorization required.
Although major cities like Los Angeles and San Francisco didn’t allow cannabis retailers to open their doors to the public on day one, the cities and shops that did launch the Golden State’s adult-use market helped make history.
Caliva president Dennis O’Malley spoke with Marijuana Venture to take readers behind the scenes of the opening day rush at the San Jose retail store once deemed by Leafly as one of the 24 best dispensaries to visit with your mom.
Behind the scenes of the Golden State’s first day of adult-use sales with Caliva, one of the top retailers
Three tips for a successful launch
Caliva president Dennis O’Malley offered three pieces of advice for future retailers as other municipalities in California begin allowing adult-use sales, in addition to states like Maine and Massachusetts launching their recreational programs.
– No. 1: Be prepared to take some time with your new consumer.
People will have questions. They’ll want to browse the selection and look around the shop. For a great many people, the concept of buying cannabis from a brick-and-mortar store is an entirely novel experience. Keep this in mind during your planning.
– No. 2: Give them enough information to make an informed purchase.
People are concerned about dosing and potency, as well as subjects like pesticide use. Having a well-informed staff, as well as printed materials and information available online is particularly valuable for new consumers.
– No. 3: Don’t forget that this is a fun shopping experience.
“It’s not like they’re doing taxes,” O’Malley says. “People are generally coming in here and buying something that’s going to make them happy.”
Retailers don’t have to organize massive, over-the-top celebrations, but there’s nothing wrong with embracing the thrill of the moment and creating a fun experience for people purchasing legal cannabis.
— Garrett Rudolph
The Lead-up
For Caliva, one of the largest vertically integrated companies in California, preparations for the launch of adult-use cannabis sales began long before the state issued its final regulations for the marijuana industry.
As the New Year approached, Caliva’s top priority was making sure it had all its “ducks in a row” to acquire the necessary licenses, O’Malley says.
The second priority was making sure Caliva’s wholesale division was prepared to supply product to its 75 retail clients so they could be ready for their own grand openings. The company had its track-and-trace procedures in place for the past year, so it ramped up production at its 100,000-square-foot indoor grow to ensure its flagship store and retail partners wouldn’t be left empty-handed.
“From that point of view, we were very prepared,” O’Malley says. “For our retail shop, we weren’t too worried about it. We’ve had big crowds on 4/20 and we’ve had some good events. We expected crowds to be similar (on Jan. 1).”
Caliva’s staff felt confident they’d be able handle the flood of consumers wanting to purchase fully legal, adult-use marijuana on day one. After all, California is the nation’s oldest medical cannabis market and Caliva had been operating successfully since 2012. Team members studied the launch in Las Vegas to prepare, but the prevailing expectation was that there weren’t going to be lines forming around the block like when Nevada began adult-use sales.
“We thought it would be busy, but we didn’t think it would be anything too crazy,” O’Malley says.
The Day Of
O’Malley was so confident, he took his family down to Newport Beach for the week, but decided to fly back to participate in the festivities, dubbed “Fweedom Day” by the company’s marketing team.
While boarding the plane, he received a text message from the store manager: “OMG. There’s a line of 150 people outside.”
But it wasn’t the crowd that was the surprise. It was the time: 6:30 a.m. — more than two hours before the shop would open its doors to the public.
“At that point I knew that we were on to something special,” O’Malley says. “We were just blown away by the reception that day.”
Many customers camped overnight to be among the first in the state to buy legal cannabis. Caliva’s first customer, a medical patient who uses cannabis to treat joint pain, secured his place in line at 7:30 the night before.
“He was that dedicated to get his health and wellness option on a legal basis,” O’Malley says.
The line didn’t dissipate until about noon and the final tally was far and away the most traffic Caliva had experienced.
O’Malley says his role at the shop was just to make sure he didn’t screw anything up.
“We have a wonderful retail manager and a great marketing team, and they did a fantastic job of executing,” he says.
When he arrived at the shop, he walked up and down the line, thanking customers who had been standing there for hours and offering them donuts and coffee. He was blown away at how many people had driven two or three hours to attend Caliva’s opening day. The excitement level in the crowd was extremely fulfilling on a personal level, O’Malley says.
“It was impressive just to see the diversity and hear their stories,” he says. “It was very, very cool.”
The Aftermath
In the weeks following New Year’s Day, traffic at the shop has remained steady.
The lines have dwindled — but only slightly — and the belief that things would return to normalcy has been replaced by the realization that this is the new normal.
Caliva stocked up on product, only to sell through what it expected to be about six weeks of supply in seven days.
“We thought that we were prepared on the amount of volume, but it has exceeded expectations,” O’Malley says.
But importantly, the early days of recreational sales have been a learning process for Caliva. O’Malley says the new, recreational consumer demographic skews a little older than Caliva’s previous customer base. And while flower used to be the dominant product category, vape products and pre-rolls have grown rapidly; those two categories combined are now about equal to flower. And like many recreational predecessors, it’s been a scramble to keep edibles in stock.
Another new phenomenon in the adult-use market is group buying; rather than people coming in by themselves, they’re coming in with a group of friends. Two real-world examples O’Malley gives were a book club of five women and a PTA group.
“If there was anything that caught us off guard, it was that,” O’Malley says.
As the initial opening day rush subsided, the company began to drill down on ways to be more efficient and improve customer service, specifically for its evolving demographic.
“This is something that affects their health and wellness, so they have a lot of questions,” O’Malley says.
The company discovered it needs more educational materials online. Like most retail purchases in the 21st century, people often study the products online before going to the store to buy it in person. It turns out that process is pretty similar whether it’s a camera, a car or cannabis.
The company’s online ordering program has also “shot through the roof,” O’Malley says.
“We had a trickle of that previously, but our new consumer is finding that to be a really convenient way to shop,” he adds.
As the shop settles into its new form of normalcy, the celebration of “fweedom” has become a popular memory of the day California cannabis went legal and a rallying point for customers.
“That was a good catch-phrase that people still bring up,” O’Malley says.