MJBizCon 2023 Analysis: No Cannabis Boom – Also Not Doom & Gloom

By: Jim Roddy, President & CEO at the RSPA

Most attendees at this week’s MJBizCon 2023 in Las Vegas were looking for a light (pun not intended).

The first 30 minutes of the sparsely attended Nov. 29 opening general session at the Las Vegas Convention Center included cannabis-industry headlines “First, the bad news”, “Okay, more bad news”, and “Seriously this is the last bad news slide.” Some of that negativity carried over to the show floor. I don’t have official numbers from MJBiz organizers, but my eyes told me the expo hall footprint was smaller than the past two years I’ve attended.

From a retail IT perspective, this year’s MJBiz lagged behind 2021 and 2022. A few data points the RSPA uncovered:

  • The past two years, the RSPA’s target list of MJBiz exhibitors who potentially play in dispensary technology exceeded 100 companies. This year our list was about half that.
  • I walked the entire show floor to see if we missed anybody on our pre-show scouting list. I only found one additional tech company. (It wasn’t these guys.)
  • By my count, 11 unique RSPA members exhibited at MJBiz in 2021 and 2022. Only three of them returned as exhibitors for 2023. A total of six RSPA members exhibited this year.

So, is there a light? The answer is yes from both a retail IT perspective and from a macro cannabis market standpoint. The light isn’t as strong as the Luxor beam on the Vegas strip, but it’s also not the black hole of doom some have portrayed.

Let’s tackle our niche first: dispensary cannatech. Executives who attended the third annual RSPA Cannabis Community field trip to Planet 13, the world’s largest cannabis dispensary, reported strong Day 1 engagement at their booths. They feel more and more dispensary decision makers are learning the positive impact quality technology and trusted IT advisors have on their customer experience and their bottom line. (Check out the Planet 13 field trip participants here. And thanks to the 2023 RSPA Cannabis Community sponsors who made the field trip and dinner possible: BlueStar, Emerging Markets Coalition, Epson, Marijuana Venture, M-S Cash Drawer, Star Micronics, and The Cannatech Group.)

The MJBizCon main stage State of the Industry panel, moderated by past RSPA Cannabis Community featured guest Saphira Galoob of the National Cannabis Roundtable, recognized the obstacles but also saw opportunities:

  • “This industry looks different depending on your vantage point, depending on where you are in the country,” Galoob said. “Some states are moving independently at lightning speed while the federal government moves at a snail’s pace. Overall, there’s an upward trajectory.”
  • “It’s not all bad news,” said Karson Humiston of Vangst, a cannabis industry job board. “Over 400,000 people are already employed in this industry, and every day we hear from others who are fired up to work in this space. 2024 could be a strong year for job creation.”
  • “We no longer have just the cannabis industry asking for a (federal banking) bill,” said David Mangone of the National Cannabis Roundtable. “We’ve built a coalition that includes card companies saying, ‘Get this done.’ We’re having real conversations with elected officials about job growth and access to financial institutions. Now the talk is, ‘How are we going to make this work?’”
  • “We’ve been resilient so far but we need to be resilient tomorrow, too,” said Galoob. “If you want to stay in this industry, you need to have resiliency in your heart and in your head.”
  • “This industry has lots of challenges and risks,” said Virgil Grant of the California Minority Alliance. “If you stay resilient there is light at the end of the tunnel.”

How Much Technology Do Dispensaries Need?
That was the question posed during a Nov. 30 MJBizCon breakout hosted by Cova Software CEO Gary Cohen. He posited that the answer depended on the maturity of the market where the dispensary operates. In a market like Mississippi where cannabis has just been introduced, Cohen said less customer experience technology is needed. But in a mature market like Colorado, the customer experience is paramount to stand apart from your competitors and to keep customers loyal.

Register today for RSPA Inspire, the retail IT channel’s premier leadership conference. Experience Networking Nirvana!

Cohen said the essential dispensary technologies are POS, e-commerce, and compliance-related. He detailed eight technologies dispensaries should consider adopting beyond the essentials:

  1. Digital signage: Can be applied as menu boards, line queues, entertainment, or as a retail media network to advertise products.
  2. Self search/self shopping: Medical patients might not be comfortable discussing their ailments with budtenders.
  3. Staff optimization: Retail and grocery are mature markets operated by experienced retailers and grocers, so they know how to manage labor effectively. With cannabis being a nascent industry and many dispensary managers lacking retail or business experience, labor management solutions become even more important to them.
  4. Enhanced e-commerce: In competitive markets, e-commerce is a significant differentiator. What’s tricky is accepting payments (or the lack of ability to do that) online in such a regulated industry.
  5. SEO
  6. Mobile
  7. Analytics
  8. CRM/loyalty

Cohen implored the dispensary managers in the audience to look beyond price and consider ROI when purchasing technology. He said cannabis retailers need to understand how the technology will increase their sales, make them more efficient, and improve quality of life. “Everyone forgets about quality of life,” he said. “If you make the job more enjoyable and less stressful for your employees, that leads to better employee retention.”

More from MJBizCon 2023
Several panelists and attendees predicted the next two states that will approve recreational cannabis use will be Pennsylvania and Florida.

  • An RSPA member with a lengthy history in cannabis B2B offered me his assessment of the industry: “It’s a tough time to get into this space. This is an industry in contraction right now. If federal rescheduling happens before the 2024 election as some are predicting, that will help but not until 2026. Though it could bring investors back sooner.”
  • MJBiz shared the dismal investment numbers that have broadsided the industry the past two years. Cannabis capital raises have plummeted from $11.1B in 2021 to $4.04B in 2022 and a paltry $1.73B this year.
  • MJBiz also shared data that the fastest growing markets in terms of year-over-year legal sales are Michigan (+33%), Maine (+28%), and Arizona (+13%). Unfortunately, the most mature markets are contracting: Colorado (-13%), California (-10%), Oregon (-5%), Washington (-4%), and Nevada (-3%). Legal sales in Canada jumped 18% from $4.5B to $5.3B.
  • Most speakers believed the SAFER Banking Act will get passed by the Senate, one even saying it could happen by the end of 2023 or very early in 2024. Others felt the bill was on the right path but weren’t bold enough to predict the timing. One panelist stated adamantly that SAFER will not pass this year or next.
  • Chris Michalakis of the UFCW (United Food and Commercial Workers International Union) raised an interesting point about the role of dispensaries when cannabis finally becomes legal at the federal level. “What if it can be sold anywhere?,” he asked. “What if you could buy cannabis at Wal-Mart? What will happen to all the dispensaries then? We need a strong regulatory framework to provide appropriate guardrails.”
  • MJBizCon will be back at the Las Vegas Convention Center next year, Dec. 3-6, 2024.

Don’t forget to register for RSPA Inspire, the retail IT channel’s premier leadership conference. Experience Networking Nirvana!

Jim Roddy is the President and CEO of the Retail Solutions Providers Association (RSPA). He has been active in the retail IT channel since 1998, including 11 years as the President of Business Solutions Magazine, six years as an RSPA board member, one term as RSPA Chairman of the Board, and several years as a business coach for VARs, ISVs, and MSPs. Jim has been recognized as one of the world’s Top Retail Influencers by RETHINK Retail, a Leading CannaTech Influencer by The CannaTech Group, and is regularly requested to speak at industry conferences on SMB best practices. He is author of two books – The Walk-On Method To Career & Business Success and Hire Like You Just Beat Cancer – and is host of the award-winning RSPA Trusted Advisor podcast. For more information, contact JRoddy@GoRSPA.org.