Kris Walker from Hoodie Analytics joins us to decode cannabis market trends following 4/20, revealing how competing holidays, demographic shifts, and pricing strategies impacted this year's sales performance. Data shows 4/20 sales dipped 12% year-over-year, highlighting the industry's need for smarter decision-making beyond reflexive discounting.
• 4/20 fell on Sunday this year, competing with Easter and Passover celebrations
• Retailers spread promotions across the entire week rather than concentrating on a single day
• Demographic differences showed younger urban areas maintained stronger 4/20 performance than suburban regions
• The 45-54 age demographic (original 4/20 celebrators) saw a 20% drop in participation
• Price compression continues to challenge industry profitability despite oversupply opportunities
• Retailers can improve profitability by maintaining consistent pricing despite lower wholesale costs
• Premium pricing strategies work when brands create emotional connections with consumers
• Effective category management helps brands become trusted retail partners
• Customer segmentation enables more strategic resource allocation and personalized engagement
• Distribution, shelving, merchandising and pricing (DSMP) are the key leading indicators of sales success
Kris Walker is the Co-Founder, President, and Chief Commercial Officer at Hoodie Analytics, where he leads customer acquisition, product strategy, and the delivery of data-driven insights to some of the cannabis industry's top operators. With a career rooted in CPG, retail, and global analytics — including leadership roles at Nielsen and Big Chalk Analytics — Kris brings a wealth of experience in turning data into action. His mission at Hoodie is clear: help brands and retailers make smarter decisions, drive growth, and maximize ROI in one of the most complex consumer landscapes today.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
AnnaRae Grabstein (00:05):
Hey everybody , welcome to episode 85 of High
Spirits.
I'm Anna Rae Grabstein andtoday I'll be joined by a
special guest, but not myfantastic co-host, ben Larson.
We're missing him today.
He's out.
We are recording Thursday,april 24th 2025.
And we're going to be talkingwith Chris Walker from Hoodie
(00:26):
Analytics, all about 420, dataand the macro environment in the
cannabis industry.
But before we dive into thatconversation, I want to check in
with the audience.
I'm coming off a great weekend.
I had a celebration on Sunday420, that was this mashup of
Passover and Easter and EarthDay and 420 with a bunch of
(00:48):
families and kids at my house.
It was amazing.
And this weekend I am headed tototally unplug, to Yosemite.
And so if anybody hasexperience with unplugging
recently and turning off theircell phones and their Wi-Fi,
send me some love.
I'm realizing I'm a littlenervous about it, which doesn't
(01:08):
make me feel good.
I want it to be easier tounplug.
So, moving into a bit of news,I wanted to just call out and
appreciate the Green MarketReport, who's been bringing all
of us in the cannabis industrybusiness news for a couple years
now, and Deborah Borshart, johnSchroer and the entire team
(01:29):
have just had the business cutoff by Crane Media, who is the
owner of Green Market Report,and it's a sad day.
Media is really hard.
The cannabis media space iseven harder and we all are going
to be equipped with lessbusiness insights than we were
before.
So I hope that someone steps upto fill the gap and I hope that
(01:50):
all of us really stand behindthe existing media groups, like
Marijuana Moment and Cultivated,and support them in their
efforts to make sure that we cankeep getting good information,
because we need it and it helpsus to be smarter and more
thoughtful in everything that wedo as leaders in the space.
Just a couple quick news updates.
Today, maryland just passed alaw allowing cannabis businesses
(02:14):
to convert to ESOPs, which areemployee stock ownership plans.
We've talked about ESOPs on thepodcast before.
We had on Darren Gleeman, who'sa banker that facilitates the
transactions of cannabisbusinesses to become ESOPs, and
it's a really, I think, usefulstructure for businesses that
can become employee owned butalso have an exit path by being
(02:38):
able to sell to the employees.
So the founders and theexisting cap table can find an
exit that isn't necessarily anacquisition by another company,
and so this is good news forMaryland cannabis founders and
also for Maryland cannabisemployees.
Of note, there are some states,like the state of Washington,
(02:58):
that doesn't allow cannabisESOPs at all, and that is a
strange thing in my opinion,considering that there is so
much effort to create equity incannabis that a state wouldn't
allow it.
And it has to do withdisclosure of owners and the
state thinks that having thecompany held in a trust, which
(03:19):
is the way the ESOPs are formed,doesn't facilitate that level
of needed transparency.
So Maryland is allowingcompanies to convert to these
ESOPs and allowing them tobypass a five-year transfer
restriction on licenses early toconvert.
So this is good news.
Nice to have some good news outthere for operators.
(03:40):
Another thing to touch on isthat the Wine and Spirits
Wholesalers of America, oftencalled the WSWA, one of the
largest alcohol tradeassociations in the US, has been
in Washington lobbying forfederal framework to allow
cannabinoid infused beverages.
The WSWA is urging lawmakers toclarify rules around hemp
(04:02):
derived cannabinoid products inthe next farm bill and the group
said in a press release quotethat it believes the next farm
bill should explicitly allow forthe production of only
naturally derived THC productsfrom hemp, specifically Delta-9,
while explicitly grantingindividual states primary
(04:23):
authority to regulate,distribute and sell, including
allowing states to prohibit andto ensure that consumers over
the age of 21 are the onlypeople buying these products.
So this is really interestingto see the WSWA planting a very
clear flag on their policyagenda as it relates to cannabis
(04:44):
beverages and their commitmentto rallying behind the farm bill
as the path forward.
So, yeah, there is lots ofother news in cannabis, but we
don't have the Green MarketReport to help us have access to
it as easily.
So we will keep trying to bringyou the things that we think
are most interesting here onthis show, but now we will
transition into bringing on ourguest.
(05:06):
Today's guest has been behindsome of the biggest insights in
cannabis commerce.
Chris Walker is the presidentand chief commercial officer at
Hoodie Analytics, where he'sleading the charge on helping
cannabis companies make betterdecisions with better data.
Chris started his career atProcter Gamble and went on to
become an SVP at Nielsen, theglobal leader in audience and
(05:28):
market analytics.
At Hoodie, he brings decades ofexperience in CPG, retail and
tech to the most complexregulated market that there is
cannabis.
He's a straight shooter, a dataevangelist and a believer that
execution is everything, so I'mexcited to bring Chris onto the
show today.
Kris Walker (05:44):
Welcome, chris, thanks for having me Very good
to.
It's great to be here.
AnnaRae Grabstein (05:49):
Awesome.
Yeah, we set this up a longtime ago because I knew that you
would be a great person to comeon this week after 420 and
share with us some of thenumbers.
So tell me, was it a wild 420in the industry?
There hasn't been a lot of talkabout what happened.
Kris Walker (06:08):
So 420, as in the industry this year, it does
unfortunately look like it was abit of a wash, you know, I'm
not going to say wash out, youknow, because you know there was
still some strong, there weresome strong performances on 420
by, you know, by some states andsome specific players.
But in general I think theindustry fell victim to 420
(06:33):
falling on a Sunday which wasalso Easter and also the
Passover, and there's just a lotof things that were pulling
people's attention away fromwhat is traditionally a stronger
day.
So we did get some decentresults overall, but to find
them you really need to lookacross the entire weekend and
(06:57):
even a couple days before tolook at that overall
contribution around the 420holiday.
AnnaRae Grabstein (07:02):
Yeah, well, historically, cannabis has been
basically the cannabis's versionof Black Friday, the highest
sales day of the year, whereas420 this year fell on a Sunday.
It seems like, like youmentioned, the industry was
really trying to promote thiswhole week of 420.
And so if you look at the wholeweek, it seems like, from the
data that you shared with me,that Friday and Saturday were
(07:25):
bigger days than Sunday and that, overall, there was still an
outperformance from a regularweek.
It was just a pretty steepdecline from the 2024
performance.
Is that right?
Can you give us some actualpercentages?
Kris Walker (07:38):
Yeah, it was still a good week and we had, you know
, and obviously you know, as I'mtalking in general generalities
across the you know, averagesacross the entire industry.
I mean, there there are somedispensaries who just killed
right, some brands just killedit, uh, but uh, but in general
it was definitely a way betterweek than a normal week was
sunday was way better than anormal sunday.
(07:59):
But if you look year over yearat the overall performance, like
like the entire weekend weekend, the lift that it was, it was
roughly about 12 percent softerthis year than than last year.
If you look at across theentire weekend and you know,
obviously looking for 20 versus420, there was a significant
(08:19):
delta because you're comparing aSaturday where, like,
everything was concentrated, toa Sunday, which is a softer day,
easter Passover, everythingelse going on that day.
But again, probably the numberthat most people are going to
care about is the overallcontributions to their business
and we probably saw about 12%across the entirety of the US,
(08:40):
about a 12% hit versus last year.
AnnaRae Grabstein (08:42):
How do you interpret the shift in consumer
behavior at a macro level?
Do you think that people areless interested in 420, that
this is really just because ofEaster and Passover and it being
a Sunday?
How do you think about this?
Kris Walker (08:57):
You hear different things.
So, at the end of the day, I dothink there is a lot of
different noise and messagesthat consumers are that are
pulling at consumers attention.
Every single, you know, everysingle day.
These days, I mean, the mediais, unfortunately, something a
lot of people are trying to stayaway from.
(09:18):
Right now, you know, with thestock market challenges, people
may not be as excited aboutstocking up on their favorite
cannabis products because theydon't know what the future is
going to hold.
What we do know is as a fact isthat you know you saw some
pretty significant demographicdifferences and where you had
the 420 lifts, and so you knowareas that you know are more
(09:41):
suburban, people that havefamilies and are probably
celebrating Easter and doingdifferent things on Easter
itself, you know, did not getthe same kind of uplifts that
they had, that they had lastyear.
Whereas you know, if you lookat younger areas that are
predominantly younger urban,you've got a bit more
consistency and performanceversus a year ago and
performance versus a year ago.
(10:02):
So that would lead me tobelieve that there is definitely
a stronger impact because ofthe unique holidays that fell on
that day itself, versus anysort of macro consumer trends
away from 420, the holiday.
AnnaRae Grabstein (10:15):
Do you guys track promotional saturation and
discounting in your data?
Can you tell how much somethingwas discounted?
Kris Walker (10:22):
We do, we do, and discounts this year were.
It's obviously it's a big blendof averages.
We did see gummies inparticular seem to have a little
stronger discounts this yearthan we saw in previous years,
but overall we did see thediscounts tended to be spread
(10:46):
across the week.
As you know, I think inprevious years when we had 420
on a Thursday, Friday orSaturday, a lot of retailers
used that to provide very uniquepromotions just on the day.
But I think, I thinkpreemptively, a lot of retailers
this year decided to make their420, you know the 420 discounts
(11:07):
spread across the week and sowe do see that people were
purchasing more on discount thisthis year throughout the week,
not just isolated to that onesingle day of 420.
Are showing that the percentageof sales on discount on Tuesday
, Wednesday, Thursday, Fridaythis year are much higher than
(11:28):
they were last year.
Versus last year, it did seemlike everyone was like I'm going
to wait and buy everything at420 because I'm going to get
these amazing deals.
AnnaRae Grabstein (11:35):
Well.
So, with all this insight aboutthe deals and the performance
at the store level, do you thinkthat the industry needs to be
rethinking this holiday basedsales focus in the context of,
like, a more maturing consumerand that behavior is shifting
towards just keeping products athome all the time and that
cannabis is just like havingbeer in the fridge?
(11:58):
Or is this holiday based salesfocus something that really is
meaningful and that and thatretailers should pay attention
to build strategy on?
Kris Walker (12:07):
I um, I personally believe that, uh, retailers, you
know, and brands, we, you know,we holidays create excitement,
you know.
I I mean we know, I meanValentine's day and you know
things like that, like it's, youknow, and you've got, um, what
is the?
And you know things like that,like you know, you've got what
(12:28):
is the Amazon holiday?
I should know this offhand.
AnnaRae Grabstein (12:31):
Yes, the Amazon holiday.
It's a fake holiday.
Amazon created it.
It's primed.
Kris Walker (12:37):
You know, but, I, mean, yeah, but you have all
these manufactured holidays.
Why do we have them?
Because it gives us somethingto talk about, it gives us
excitement, it gets some, it'snewsworthy and people talk about
it Like it's like I don't.
(12:58):
I do not think it's a smartmove to go away from it and we
look to leverage as an industryas much as we can.
Now should we be smarter abouthow we promote and how we
communicate and how we managestock and inventory.
A hundred percent.
We need to be way better aboutit, make a conscious effort to,
(13:28):
you know, not necessarily giveaway product at half off, like
on 420, because they know whenthey do that their customers
will load up on that day andthey won't be back for the next
or the rest of the month, youknow, and then?
And so what?
AnnaRae Grabstein (13:36):
that doesn't drive a lot of benefit for that
retailer.
Kris Walker (13:38):
Yes, it's great for the consumer because the
because the the consumer wasable to, you know, obviously
benefit from it, but from theretailer, who's who's in the
business to make money, it hurtsthem longer term and so you
know.
So we are seeing that consumer.
You know, smarter retailers arerealizing that consumers are
going to.
(13:59):
We need to give them a reasonto come out to celebrate this
plant and to celebrate theproduct.
But it doesn't always have tobe through getting 50% off
discounts.
And you know and you referencedBlack Friday earlier, and I
mean you see that happening inBlack Friday now as well Like
the discounts went from everyonelining up outside the stores
(14:19):
the night before so they couldbe there at 6 am when they open,
and then it became a wholeweekend and now it's a whole
week, and so you're gettingthose discounts spread out and I
don't know that there's a lot.
You know the retailersthemselves are getting as much
of a benefit but they're tryingto extend the opportunity longer
(14:40):
and you know, to some extent itplayed out a little bit that
way this year just because ofthe nature of the holiday.
Like I said, overall, like youknow, it was a 12% hit that
everyone took on average.
AnnaRae Grabstein (14:52):
Yeah, I like what you said about the
consumers having a reason tocome to the store, though I
spoke with my mom last night.
She's 75.
And and I I asked her how herweekend was and she said oh,
it's fine.
Oh, you know, your father wentwith his friend to the
dispensary on 420 and had somuch fun getting all of these
discounts and I thought, wow,when it has reached the 75 year
(15:17):
olds that they get discounts on420, it's like this is a real
holiday.
Now apparently it's reached themasses fully.
And it's true.
My dad went with one of hisother 70-year-old plus friends
and they went to the dispensarytogether and they came home with
a bunch of very strangeproducts that they would have
(15:37):
never purchased otherwise, and Ithought that was a good sign,
because they bought stuff thatthey wouldn't have already been
going there to purchase.
He often goes and buys flour orpre-rolls, but he came home
with tablets and tincture andother fun things that the bud
tender suggested.
It seems like it was positivefor introduction of new
(16:02):
categories in that example, butI don't know if that's true
across the board.
Kris Walker (16:09):
That's funny.
You referenced your fatherbeing 75.
So I mean he's right on thecusp of what our demographic age
cut off.
We looked at all the data andblocks of 65 to 74, 75 to 84, 85
plus and actually the 75 to 84bracket actually this year had
(16:33):
the biggest fall off on the forthe weekend.
Now I do think you know yourfather being 75 to 84, he's on
the, he's right on the borderthere.
And actually the 65 to 74s werefairly yeah, it was a good year
for 420 for those folks.
But we did see a fall off inthe older consumer like 75 plus.
(16:56):
There was definitely a fairlysizable fall off on their
investments in 420 this year,off on their investments in 420
this year.
And the other one that was kindof interesting was the 45 to 54
, which is kind of thegeneration where this all
started, and so that one agegroup dropped about 20%.
AnnaRae Grabstein (17:19):
That is interesting.
What about brands?
We didn't talk about what yousaw in terms of brands or
specific form factors.
What popped out of the data?
Yeah, and that it's a little.
Kris Walker (17:30):
it's a little all over the board, you know,
depending on, depending on thestates and and you know
obviously the the specificlocation of the specific brand.
So we had what we did find isthere was a decent amount of
trend of folks using non corebrands to really drive people in
(17:53):
with just some crazy discounts.
And so, seeing some of thelargest lifts that we saw were
on brands that most people onthis call would never have heard
of, like they were isolated incertain areas.
They used this as a chance toget their name out and get that
distribution and they blewthrough the product at very high
(18:15):
discounts and got great uplifts.
But again, it's kind of a meansto an end for the retailers.
I'm not sure that the branditself is going to get the
follow-on impact.
You know, and taking what was a75% discount and now you know,
and now moving, you know tryingto get a consumer away from
doing that, you know, and nowmoving, you know trying to get a
consumer away from doing that,you know is going to be
(18:36):
challenging.
But we did see, you know I meanFlower in particular, you know,
was a little all over the boardwith top brands.
I mean you've got a lot of thenormal you know the normal names
in there, you know.
And Edibles, again, a similarway.
It was less the known brandsthat got the biggest uplifts, as
(18:58):
much as it was these, you knowthese newer, you know some of
the newer and kind of less top10 gummies and less top 10
edibles that were getting thebiggest bumps, edibles that were
getting the biggest bumps, andagain, I mean for better or
worse.
I think some of that probably,you know, comes down to the fact
that you know the larger brandsprobably have a bit more
(19:19):
discipline in pricing and marginmanagement and you know, they
know that this is still anindustry that people are in to
make money and you know.
So you know, getting a 300%lift is probably not what
they're looking to do.
Their goal is to grow theirshare over the duration, not
just on that one day.
AnnaRae Grabstein (19:40):
Sure.
Well, so, starting to shiftaway from 420, I think that my
takeaway is from what you'veshared is that it wasn't a total
loss but it just didn't matchpast impact for a lot of reasons
and that it still remains avital sales opportunity and that
, looking to 2026 and and thefuture, like retailers shouldn't
(20:01):
give up on promoting 420.
Just maybe getting a little bitmore grounded and in realism of
the different fundamentals thatare going to drive behavior
around the holiday makes sense.
Anything else that we shouldmention about 420 before we move
on to just bigger discussionabout data.
Kris Walker (20:19):
You know, a lot of the trends that we're seeing at
a macro level were pronouncedhere as well.
I mean pre-rolls did very well.
I mean we've seen a big movetowards that.
Pre-rolls as a convenient formfactor.
It's probably the strongestgrowth this year relative to a
lot of the other categories andwe saw that continue in 420.
(20:40):
Flower was king once again.
It was interesting, like I said,just to look at those brands
that chose to go with heavy,heavy discounts.
Versus a year ago.
I think some of your morenational brands were just more
thoughtful about how theydeployed their programs, so it
(21:04):
wasn't just around X amount ofpercent off or dollars off, but
come in and you get a hat or youget something that is
meaningful.
That will, you know, maybeincentivize you to come back and
and pay full price for myproduct the next time you try it
, and so so anyway, there's justsome, I think, some smarter,
some smarter behavior, you know,for for folks that probably
(21:26):
felt like they had to dosomething different this year
because because the product,because the date was in fact on
a, on fact on a special day witha big Easter than just a normal
Saturday.
AnnaRae Grabstein (21:37):
Sure, I love this.
You just said smarter behavior,and I think it's a perfect
segue into this concept of justhow we're all running our
businesses, how cannabisbusinesses are deploying smart
insights to make decisions, andI've been in this for a long
time and there is more datatoday than there's ever been.
There are there are multipledifferent companies that are
(22:00):
selling different types of dataand and I'm curious for you to
like give us some yourperspective on where we are in
the evolution of creating dataand using data in cannabis, as
someone that has workedpreviously for some of the
biggest data companies in theworld and and CPG companies that
(22:23):
are experts at deploying data.
Yeah, yeah, what are you seeing?
What's the environment like?
Kris Walker (22:30):
So it's.
It's funny.
I've got a my one of myco-founders, kelly Bernalza-Hall
, and I were talking about thisyesterday because we're prepping
for a keynote that we're doingat MGEMPAC next week on market
trends, and I was raising to her.
I was like what would right Ifwe, if you were, if you were to,
(22:54):
if you know sorry, zooming outfor a minute, if I showed you,
if I asked you like what's goingon with pricing in the past 12
months or 18 months or two years, you like everybody else would
say, oh well, it's been comingway down, pricing's coming down,
you know, and surprise,surprise, it's doing it again.
(23:14):
Michigan flower pricing is down20% in one year.
20% and you see it across theboard.
Everyone's like, oh well, it'sa new market, so it starts high
and it starts profitable, butthen after a while it becomes
less profitable and peoplearen't making money anymore.
And why is this happening?
(23:35):
Why is it continuing to happenover and over again?
And, to be fair, you've gotsome markets like.
Missouri is a good example.
AnnaRae Grabstein (23:44):
People are still making good money in
Missouri.
Kris Walker (23:46):
Like it's a good market.
You know that's.
You know you can get goodproduct there.
Operators and brands are makingmoney in Missouri and you know
they have a price point that'sprobably a bit more sustainable
for allowing that to happen.
So it's a long winded way ofsaying.
You know Kelly and I weretalking about this and you know
(24:06):
I was.
I was hypothesizing, like youknow, if we were just able to
snap our fingers and go back intime like three years and take
all of the cannabis operatorsand just keep in mind we are a
young industry.
Lots of people are coming intoit for the first time.
We may not have the experienceof some of these bigger brands
and bigger retailers and we wereit.
(24:42):
So we had the ability toreplace every operator with an
experienced you know person whoran Kroger or person who ran you
know, I don't know BananaRepublic.
You know these experiencedretail operators are used to
using data and making smartdecisions and not being complete
like as reactive to to changesto what the guy across the
street did, would it make adifference?
Would we still have $40 eighthpricing in Michigan or would we
(25:02):
be where we are now at $20?
And Kelly said to me, she waslike I'm not sure it would make
a difference.
It might help, because one ofthe theories is like, you know,
we just need, we need to educatethe industry.
We need to give that, you know,let people like have more you
know, get people that are moreexperienced to learn how to do
these cool things.
(25:23):
You know Kelly's point.
To me she's like well, chris,the other, the other issue is
just the data hasn't been thereLike.
It just hasn't hasn't.
So even if you have the bestpeople there, if you don't have
the data and tools to be able tomake the right decisions,
you're still using gut feel andhaving to be reactive.
And so I do think there's thiscombination of the industry I do
(25:45):
think has evolved now where thedata and tools are available,
but we still also have to havethe discipline and the people
and the accountability, even toeach other, to say, hey guys,
maybe it's not a good idea forall of us to just drop our
prices by 50% on 420.
AnnaRae Grabstein (26:05):
Maybe we can get the same results we do.
I want to jump in because thisis something that's this is a
big deal, as is sort of thisendless race to the bottom with
pricing and and I like thatyou're bringing it up, and I'm
curious to understand from yourperspective what is the
discipline that data can supportto help people not lower their
(26:25):
pricing, because I perceive thatthe the price compression is
being driven by oversupply anddesperation, and so people are
trying to just bring in cash asfast as they can.
They're not even thinking aboutthe market, but then it's
having these market rippleswhere then people are having to
follow, and it's just thisendless race.
(26:45):
But what is the data that canhelp us to better manage pricing
?
I mean, I probably shouldanswer this two ways.
Kris Walker (26:55):
I will answer the technical side first.
So you know there is a volumeprice trade-off equation, right?
It's called price elasticity,right?
So the way you should think ofthat is if I drop my price by
10%, how much more volume am Igoing to get?
Am I going to get more peoplethrough the door?
Am I going to sell more stuff?
Am I going to get more peoplethrough the door?
Am I going to sell more stuff?
Am I going to make more money?
Okay, and the answer might beyes, I should drop my price by
(27:18):
10% because it's going to bring20% more to my bottom line.
That's a great win-win.
If I drop my price by 20%, am Igoing to make more than if I
did 10%?
Or am I going to make more thanif I did 10%, or am I going to
make less?
And so this concept of priceelasticity basically allows you
to understand the impact of whathappens if I drop my price by
(27:42):
10%, 20%, 30%, and you can dothe same thing for promotions.
And the data is there, right,like the data now exists with
Hoodie that you can startmeasuring the impact to your
business.
If you drop your price, youraise your price.
What's going to happen?
Because, by the way, everyone'spetrified of raising prices.
Oh my God, a raised price.
(28:02):
Look at that.
I could tell you in the CPGindustry and like other
industries that, like I that Icame from, you know it is that
is much more of an emotionalconcern than a practical concern
, because generally, when youraise your prices, yes, you're
going to lose a bit of business,but you're going to make more
(28:24):
money, so you should probablystill do it.
Now, if you get to a pointwhere you're suddenly at 30%
higher than anybody else, thenyes, that's going to hurt you,
but you know, if you're, ifyou're, if you're on the margins
, then you know there's a wayyou should be able to make more
money by leveraging this idea ofprice elasticity and and that.
(28:46):
So that's, that's theconceptual side of that.
So that's the real technicalside.
So that's the real technicaldata side.
The other side is there are waysthat you can manage pricing in
order to maximize your profitsand, like you said, the whole
point about oversupply.
Oversupply is great.
(29:06):
So I've got a lot of product.
That means all the brands canget product for cheaper.
Smart retailers can negotiatebetter deals Now a smart
retailer also.
There's no need for them to bepassing on that price discount
to the consumer.
And so what we saw a couple ofyears ago is all the brands went
and you had a bunch ofretailers sitting there and said
(29:27):
thank you very much.
I love the fact that I can nowmake two times the amount of
profit on this product than Idid just six months ago, but I'm
going to hold my price flatbecause, at the end of the day,
the consumers are willing to payfor it.
They're going to pay for a goodexperience, they're going to
pay for good brands.
They're going to pay for thatbrand experience, and I don't
(29:56):
need to just throw money awaybecause I'm getting a better
deal and so so, having thediscipline to for a retailer to
understand what's going tohappen if I do these things not
just today, but for the longerterm it's it's important, and so
so I mean that's you know, andagain, I can go on about the.
You know there, there's,there's.
So go ahead.
I was going to say I just lovethat you're talking about the.
You know there, there's, this,there's so go ahead.
AnnaRae Grabstein (30:13):
I was going to say I just love that you're
talking about this as adiscipline, because I think that
it it it really is in thatleaders are being, I think,
pressured by market forces andwhat they perceive to be
consumer behaviors to go down,down, down.
But sticking with with thepricing that is profitable and
(30:34):
that makes sense in the marketis what you're saying can be
more profitable at the retaillevel.
And this concept of when theprices are going down at
wholesale, of keeping yourprices steady in the market I've
been advising people to do thisfor a while it's like your
store isn't profitable yet, soif the product costs less money,
this is a good thing.
This means that you might makemore money per transaction,
(30:56):
which is what you need to not bein the red and, in general,
like we need to be moving out ofthe red in this industry and
into the black and up into theright.
And the way that we do that isby being able to see clear lines
of profitability and justhaving set markups, especially
if stores were just always goingwith like a 2x markup as an
(31:18):
example, but then all of asudden, the prices start
dropping of their wholesalesupply and they stick with that
2x markup but they're notselling more product.
All of a sudden their profit isdeclining and they can't pay
their staff, they can't paytheir benefits, they can't pay
their rent, because the samenumber of transactions and the
same number of units arehappening in the store but
(31:40):
they're making less dollars.
And there's this differencebetween margin and dollars that
I think is really important forpeople to understand and to have
a target of you know what isyour target average dollars per
transaction as opposed to justlooking at what is the margin
that you were able to capture onthat transaction can be, I
(32:01):
think, a good way to start tocreate that discipline for an
operator to be able tounderstand, kind of how it
trickles through the wholebusiness.
Kris Walker (32:11):
Yep, and that same concept and you know not to go
away from pricing too much, butthat same concept is there for
the taking across otherdisciplines in the industry as
well.
How, if I have a brand and I'vegot one of the most expensive
costs for brands is theirselling organization, right,
(32:33):
they've got really smart, greatpeople that are knocking on
doors selling products and youknow and they live and die by,
you know their success withtheir sales teams, right?
And so if you look at the costof that the sales organizations
you look at them as an asset andthe cost of that asset you want
to figure out what is.
How do I maximize the return?
Like, for every dollar I'mspending with that sales guy to
(33:04):
get back, what's the return forme as a brand, for my profit?
And again, just looking at itfrom a process perspective and
just with dollars and cents anddata, we can say, hey, you know
what, there are 100 differentaccounts I could go after.
Like, there's a hundreddifferent stores in my market
that I could go after that arenot buying my product today, and
you might have 10 of thosestores that I'm just using silly
numbers.
(33:24):
10 of those stores are sellinga thousand dollars a year of
stuff, and another 10 of thosestores are selling a million
dollars a year of stuff.
And so should I be spending thesame amount of time with the 10
that are doing a thousanddollars as I, as I should be
with the 10 that are doing amillion dollars?
And like, intuitively,obviously the answer is no way
(33:44):
there's, because if I get, if Iget, you know 5 percent share of
the million dollar store,that's worth you know what
$50,000, versus if I make 5% ofthe thousand dollar store,
that's $5, you know, and or $50,you know, and so that's that's
a very different return for thesame amount of time in many
(34:06):
cases.
Right and so so.
So you just so trying to builddiscipline around your major
cost drivers and how you go tomarket, say, maybe I don't need
to be in every single dispensaryin Michigan, I want to be in
the 50 percent of stores inMichigan that actually do 80
percent of the total Michigansales volume, and and that is
(34:27):
the cost to doing that is somuch less.
But the you know, but the ROIthat I have for every hour that
my sales guys are spending is somuch higher.
AnnaRae Grabstein (34:38):
Yeah, do you see that, as one of the common
pitfalls that you encounter inworking with brands is that
they're spending the same effort, resources, dollars on all of
the accounts, as opposed tofocusing on the most important
ones?
Kris Walker (34:51):
Yeah, I mean again.
I mean, sales guys are smartand and, uh, I mean so they,
they have some indication oflike this this is a big account,
this is a smaller account, um,you know, but it.
But there's just and and don't.
I will tell you, just to bevery fair, there are a lot of
organizations that are gettingtheir act together, that are
starting to do a really good jobat this.
(35:11):
Okay, and and organizationsthat are getting their act
together that are starting to doa really good job at this and
layering in account tiering,like by this is an account of
mine, but I should have 10% oftheir business, and right now I
only have 2%, and if I can get10% instead of 2%, that's worth
$100,000 a year to me.
So I'm willing to spend Xamount of dollars in order to
get that extra hundred thousanddollars Right, and being very
(35:34):
disciplined about assigning acertain value and a certain
opportunity to every account ina market and then and then and
then basically incentivizing mysales teams to behave in certain
ways to capture thatopportunity, and then tracking
their success of doing thatthrough, you know, and then
tracking their success of doingthat through, you know, a tool
like Hoodie, that basicallyallows you to do that and hold
(35:56):
everyone accountable, to say,figure out who should get their
bonus and who should get fired,and like it's not just about
relationships anymore.
I mean, and some of it is right,I mean you still have there's a
lot of, a lot people matter,right, and there's still a lot
of that going on.
So I'm never for one minutegoing to gonna say you know that
that people don't matter,relationships don't matter, they
(36:17):
do like they matter my business, you know and you know, but
it's it's the relationship.
Relationship still has to begrounded in data.
Like you still have to say, hey, if you do this for me, it's
gonna make me this, it's gonnamake you this amount of dollars,
and then you should hold meaccountable for delivering
against that.
And if I make you that money,I'm going to expect you to come
(36:37):
back and buy more stuff from mebecause you're going to make
more money.
AnnaRae Grabstein (36:40):
And like and that's cyclical.
I like that you're talkingabout some of the things that
are working for people and thatwe're getting into.
What I like to be is likeoptimistic and and and being
able to point to some of thestrategies that can move the
needle.
So a company that decides thatthey want to focus on this one
account, that you said thatright now they have 2% of the
business, they want 10% of theirbusiness, and that that could
(37:02):
move the needle for theircompany, the companies that are
winning at a strategy like that,when they're saying, okay,
we're going to spend more to tryto capture more of the
sell-through in this store.
What are some of the?
Kris Walker (37:17):
I'm going to start with the one that everyone has
been using for a while.
Like build relationships, buildtrust, be creative.
AnnaRae Grabstein (37:26):
OK, like taking people to the basketball
game.
Kris Walker (37:30):
It depends.
You have to define who thepersonality is.
You know there are differentpeople that are going to be
motivated by different things.
Ok, so let's I'll put that onthe table.
You should still use creativityand relationships, do
relationship mapping and allthat kind of discipline stuff.
But the other thing that youhave the opportunity to do is to
(37:52):
become a trusted partner ofthat retailer by showing them
how much you can help them growtheir category Right, and not
just, maybe, with your products,like you might.
You know, like I hesitate touse any specific, specific
brands in a public forum likethis, but you know.
But let's say you are withSmokies and you know, and so and
(38:15):
you go in to say, hey, you know, hey, retailer, that I want to
sell a bunch more stuff to.
You know, hey, retailer, that Iwant to sell a bunch more stuff
to.
Did you know that?
You know your gummy category isperforming about 10 percent
softer than other dispensaries,just like yours, like, in fact?
You know you did about onehundred thousand dollars in
gummies last month, but all ofyour other competitors that are
(38:38):
just like you, they did aboutone hundred ten thousand dollars
and let me tell you.
Let me tell you the things thatthey are doing that are a little
bit different than you are,than you're doing right now, and
and you know, and and and maybewe can help grow that together,
right?
So in the CPG world that I came, you know I came from, it's
(38:58):
called, it's a term calledcategory management, right, and
so the idea is you're not justthere to sell your own products
and your own stuff.
Yes, smokies wants to sell asmany Smokie gummies as they can,
but the smart Smokies rep isgoing to tell, is going to
partner with that retailer toteach them how they can grow the
whole category.
And then you know, and it mightbe, and it may be like hey, you
don't.
You don't actually need 30different flavors of Smokies.
(39:20):
You know cause, cause, you know.
But what we know is that youneed, you need X amount of
flavors of Smokies and you'regoing to need something that's
even more super premium.
And then we and we know thatyou also need a value option.
So make sure that you'remeeting all of your customers
and you've got enough valueoptions of mid tier enough here.
And and you know, becausewhat's going to happen is, if
(39:43):
you are helping that retailergrow their business, they're
going to trust you, they'regoing to put more stuff of yours
on on, you know, into theirstore and you're both going to
win together.
And that that's that's honestlylike my, what I say, my number
one recommendation, folks.
It's like don't be soself-interested and remember
that, at the end of the day,your job is to help that
(40:05):
retailer grow their business,and if you can give them other
tools and tips and data andtricks to allow them to do that,
they're going to want to spendmore time with you and more
money with you.
AnnaRae Grabstein (40:15):
Yeah, it's a great.
It's a great tip, and movingtowards a better, more strategic
category management in cannabisis something we should be
talking about more, so I like it.
Thank you for that.
You alluded to thisrelationship with dispensaries
and I think that more and moreit becomes clear, as brands are
in multiple states or even ifthey're just becoming more
(40:36):
successful in their existingstate market, that dispensaries
are very different and that youcan't have the same strategy for
all stores.
There are stores that are doingcentral buying through certain
hubs and distributing to lots ofdifferent stores.
There are stores that carryvery different levels of
inventory depending on theirstrategy.
I'm just wondering what youfind and maybe it's something
(41:01):
that you even just learned fromgetting to see all of the data,
but what is like a misconceptionthat people have about retail
channels and cannabis?
Kris Walker (41:11):
I mean you are correct.
Like I mean, particularly inthe world of the MSOs.
I mean there's a lot of centralbuying and you know, and other
challenges that a brand may havethat does not have their own
vertical distribution andworking with those folks.
You do need to segment yourcustomer base right.
So this idea of segmentingcustomers and creating
(41:31):
attributes, you know, and againyou can use a tool like Hoodie
and go in, you can create allyour own attributes and tag a
dispensary to say this one is aheavy promotion store, this one
has a lot of competition, thisone's sitting right on a
non-legal border, this is ahighly affluent dispensary and
like, we have a lot of that kindof baked in.
AnnaRae Grabstein (41:52):
But you can also create your own.
Kris Walker (41:54):
It could be, you know.
AnnaRae Grabstein (41:55):
I only visit this guy on.
Kris Walker (41:56):
Tuesdays and stuff like that.
But you are going to want tosegment your customers right and
because you know and stuff andstuff like that.
But you are going to want tosegment your customers Right and
because and you know.
And then again, my my numberone thing I tell everybody is
you segment, you segment yourcustomers around the
opportunities you're trying tocreate, and you know.
And then you know, and if youhave some that are not going to
(42:17):
be able to, you've got to.
You've got to handle themcentrally.
Then assign someone that rolethat is good at that and support
them with the selling storiesto allow them to be successful
in that role.
And it's another one of the.
I think one of the challenges wehave as an industry is because
there is so much fragmentation.
(42:37):
The job of a salesperson isinfinite.
It's like your job is, you'vegot.
If you ask the salesperson, thejob of a salesperson is is
infinite.
It's like your job is you'vegot.
You know.
If you ask the salesperson thejob description, they're like
well, I got these 95 things Ihave to do every single day.
And it's like how are you goingto be successful in doing all
those 95 things?
Because I get got it, john,you're really good with people,
but you are terrible withfollowing up with cash
(42:57):
collections and, uh, you know,and john and you know John may
not have ever been really goodat handling, looking at data,
telling stories with data.
So is there an opportunity tocompartmentalize those tasks in
order to give John a betterchance of being successful?
And it starts.
I really think it starts withsegmenting your customers around
things that you know of howthey purchase and how you know,
(43:22):
in order to give you the bestchance of being successful.
The obvious one is are theypaying their bills or not?
Like if they, you know your jobis to.
Your job is to is to make moneyand it's to stay financially
solvent.
And if I'm providing all of myinventory to somebody who's not
paying their bills, you knowthat that becomes.
That becomes challenging.
AnnaRae Grabstein (43:44):
This is.
This is a great point that, eventhough we're mostly talking
about brands selling toretailers and cannabis, that
that translates kind of acrossthe supply chain to no matter
what you're doing, this idea ofcustomer segmentation because
how often are we gettingpromotional emails from
companies that don't apply to usat all and what a waste.
(44:05):
Right, and what Chris, you'retalking about here is really
focusing on the outcome that weare trying to create with our
effort and segmenting aroundthat.
So, whether you're a retailersending out emails and text
messages to consumers, or you'rea brand that's trying to stock
(44:27):
your product in retail stores,or even if you are a lawyer that
is trying to serve the cannabisindustry, segment your
customers and try to serve thecustomers things that are going
to be valuable and relevant tothem.
It's so important because notonly can it drive the outcome,
but when you segment, when youdon't segment or you do it wrong
(44:49):
, people get offended and arejust like spam and leave me
alone.
You don't understand mybusiness and you're trying to
come at this the wrong way andit's it's a great way to uh, to
become a less trusted partnerand people to think that you're
just not thinking of them andyou don't know who they are.
Kris Walker (45:09):
Yeah, yeah, I think personalization and
segmentation is so importantacross I agree with you, uh,
like it's so important acrosseverything you do.
And you know, and I, I'm, youknow, I, getting back to our
pricing, pricing stuff that westarted this on in 420.
You know I I won't name names,but you know I, I, I sat in a
(45:31):
conference and there was a CEOof another data company who
basically told everyone at theconference that the you know
that, that you know they're,they've done all this analysis
and segment all the customersand and 80 percent of every
product is bought on promotion.
And so, because of that, youknow we are not doing a good
enough job to to meet the needsof the promotionally deal
(45:55):
sensitive consumer.
And it, like it just killed, itkilled me to hear Candidly, I'm
like, I'm like this, this isn't.
We need to be driving smarterdecisions as an industry right
now.
And and like segmenting because, like, like it, you know the
fact that 80 percent of sales,like, even if you believe that
(46:16):
number, 80 percent of productsare bought on promotion cannabis
.
That is because we as anindustry are behaving in that
way.
That is not a normal.
That's not normal consumerbehavior because, guess what,
you know, there were a bunch ofpeople that walk in that store
and they were happy to pay fullprice for your brand because
you've got an awesome brand.
But they're happy to take thediscount if you're going to give
(46:38):
it to them, Right.
So so I might as well take thediscount, but you just lost.
You know we call itcannibalization.
Like, I ran a promotion and theidea is that I want to get a
whole bunch more sales becauseof the promotion, not just
incentivize my existingcustomers who are already going
to buy my product anyway, right.
(46:58):
And so you have to ensure thatthe lift I'm getting is greater
than the cannibalization.
And and I and I, and right nowas an, as an industry, we've got
to acknowledge that there,there are plenty of people out
there that are happy to pay 40,50, a hundred dollars, you know,
for it, for an eighth of flower, if it's the right stuff, that
it's meaningful and it's, youknow, and and it it does, you
(47:24):
know it makes me feel a certainway, or it makes you know, it
just makes me feel good aboutmyself, and and there are a lot
of things that can you know.
You know it's the I've usedthis analogy a bunch.
But like you can get a candleat you know, you can get a
candle at Walmart for a buck.
You can go get the same candleat Bed Bath Beyond for $10.
Or you can get the same candlethat basically smells like
(47:45):
Disneyland on Etsy for $50.
It's the same candle but I willbuy that $50.
There's a bunch of people outthere happy to buy that $50
candle that creates a feeling inme and has an emotional
attachment to you know, feelinglike Disneyland and this candle,
(48:06):
and I'm going to spend that 50bucks and I'm going to tell my
friends about how amazing thismade me feel.
And guess what?
You know, you just made a wholebunch of money on and that's
brand equity, right, that'screating brand equity.
And that's the same candle andthere's no reason.
There's no reason we cannot dothe same in this industry.
AnnaRae Grabstein (48:26):
Yes, cheers to that.
And there's so many examplesoutside of cannabis of where
perception of quality love andlove of a brand has has driven
premium pricing, and thecannabis industry, for better or
for worse, has really degradeda lot of that.
(48:46):
And and people are justshopping on discounts because
they're so used to it.
They've been trained that way.
We need to untrain the consumerwell, so, as we're getting
closer to the hour, um, I'mcurious, as we start to to wrap
this conversation as a as aself-proclaimed data nerd what
are some of your favoritebenchmarks that you look at when
(49:07):
you open up the platform thatyou keep going back to again and
again?
Kris Walker (49:11):
I learned a while ago that this concept of leading
indicators versus trailingindicators so, being specific
about it, like sales, dollarsales or unit sales, that's a
trailing indicator.
That has already happened.
What you want to be measuringare the leading indicators of
(49:33):
sales, the things that you cancontrol that will give you those
sales results.
So we know the number onedriver of sales is distribution,
and you know.
So.
Points of distribution how manydispensaries am I in and how
many SKUs do I have in each oneof those dispensaries?
That is a point of distributionand you know, if you can get
(49:55):
the points of distribution,you're going to eventually get
the sales right.
And so you want to track leadingindicators right.
You want to be managing to aprice point or a price gap.
So you know, in the CPG worldit's often called DSMP,
distribution, shelving or shareof shelf, merchandising and
pricing right.
(50:15):
So those are your four leadingindicators that if you go to any
like head of sales in the CPGworld, they'll often, like, have
a printout behind them on theirdesk with their DSMP KPIs that
they know if they deliver onthat they're gonna get their
sales results, they're gonna gettheir bonuses, their teams are
gonna be happy and all is good.
And so I do really try to focuson those leading indicators
(50:40):
anytime you can.
AnnaRae Grabstein (50:40):
I love that Cool.
Well, so, looking ahead, I knowthat hoodie is continuing to
roll out some new stuff.
Why don't you tell us whathoodie is up to in in 2025?
Kris Walker (50:54):
Awesome thing, yeah , the the, the major excitement
where we are.
We've been very fortunate.
We've got a.
We've got a lot of hoodieevangelists out there.
I think we're working with 13of the top 20 brands in the
market right now, which is moreand more each day.
We've been very blessed andfortunate with the support we've
had from this industry and, tothat end, we're excited about
(51:21):
launching a new service calledHoodie Connect, and Hoodie
Connect is going to allow adispensary, a retailer and a
brand to be able to collaboratedirectly with each other, you
know, on KPIs and on measuresthat will allow them to both be
more successful.
So imagine a retailer no longerhaving to like take a hundred
phone calls from a hundreddifferent vendors to say how did
(51:41):
I do this week?
Come on, Jane, tell me how Idid.
And now, and the retailers thathave been approved, you know
we'll be able to actually justsee the results directly.
They can set KPIs, you know,around.
You know we're going to agreethat we need to hit at least,
you know, five units, five unitsper week on this product and we
(52:02):
need to hit a certain margintarget within 90 days.
We can establish that and theneveryone's very transparent with
what they need to do to achievethat, and if a brand doesn't
achieve it, they see it and theycan come back to the retailer
to say you know what it didn'twork out?
I'm right below it, but I thinkif we ran this extra promotion
or if I did some sampling withyou or we did some in-store
training, we're going to getthere, and so it just allows a
(52:25):
lot stronger collaboration.
And then, obviously, on theordering side, it gives the
brands the opportunity to comeup with recommended purchase
orders for the retailer, basedoff of how they're seeing their
products performing in marketand how products are performing
in the industry as a whole.
So, hey, I think this otherproduct that we're seeing sell a
(52:47):
lot of stuff in dispensariesjust like you in Illinois, I
think would add this amount ofvalue to you.
So why don't we try a case ofthat instead of this other one
that's lower performing thistime around and just helping to
facilitate that buying andpurchasing transaction?
So keep a lookout for HoodieConnect.
It's going to be launching herein the next couple of weeks.
You're going to see a lot moreabout this.
(53:08):
We're very excited to bepartnering with some of the
biggest and most exciting brandsand MSOs and retailers in the
space with this.
So more to come.
AnnaRae Grabstein (53:20):
It's great to hear about companies that are
continuing to innovate withinthis compressed market
environment.
We need to keep moving forwardand having that growth mindset
to be able to do things better.
So I love it.
So thank you for sharing that.
My last question before we moveto the last call is just if you
were going to give a tip forbrands to take just one step
(53:41):
this year towards better data,how would you suggest that they
get started?
What would be the first step tobecoming more data-driven?
Kris Walker (53:52):
You're only giving me one.
You're making it tough.
You can give a couple if youwant.
I'm going to say so as anindividual or brand.
One of the most the best thingsyou can do is is to basically
basically showcase the valuethat a data driven insights
(54:12):
contributed to my business.
Right, and you know, becauseone of the one of the challenges
you have in any organization ischange, right?
Well, we've been doing it thisway for a while.
It's been, it's been fine.
One of the challenges you havein any organization is change,
right?
Well, we've been doing it thisway for a while.
It's been fine.
Like I don't need to use thisstuff.
I got a good relationship withPaul.
He's going to buy stuff from me.
It's fine, you know.
But if I could say, hey, we didthis one thing differently.
(54:38):
We used data and look, you know, paul still bought stuff from
me, but his average order sizeis now $2,000 more than it used
to be because he's now seeingthis data, so capturing that
insight and then sharing it andcommunicating it.
If you talk to any of mycustomer success guys at Hoodie,
they are awesome at saying, hey, tell me your wins and share
(55:00):
your story, and half of it.
It's not for us candidly,because we want them thinking
about it and documenting it.
So they're telling other peoplein their organization to say,
hey, if up in the morningbrushing my teeth, taking my
(55:23):
shower and looking at the datatoday, so I could define what I
need to spend my next severalhours doing.
If we can get to that point asan industry, we're going to be
making a lot more profit, a lotmore money.
AnnaRae Grabstein (55:36):
Thank you so much.
Well, chris, you've shared somuch great stuff with us today
and it's time for our last call.
So, chris, what's shared somuch great stuff with us today
and it's time for our last call.
So, chris, what's your finalmessage for our listeners?
Advice, call to action, closingthought to leave them with.
Kris Walker (55:49):
Come out and see us at hoodieanalyticscom, if you
haven't already.
We'd love to talk to you.
We are in the business to helpbrands make better decisions and
operators make better decisionsusing data, because if you're
making better decisions, you'regoing to make more money, you're
going to be more profitable andeveryone wins, and we'd love to
(56:09):
talk to you about how we cansupport your business in doing
just that.
AnnaRae Grabstein (56:13):
Nice, I love it.
Well, thank you so much forjoining us today.
We really appreciated yourinsight and I think that there's
been some great takeaways forfolks, so have a great one,
chris.
Good luck with everything.
Be Connect yeah.
Kris Walker (56:26):
Thanks for having me.
AnnaRae Grabstein (56:27):
All right, folks.
Well, that's the episode.
How would I do without Ben?
Thank you for everyone thatengaged with us in the comments
on LinkedIn.
Please continue to engage withus.
If you liked this episode, dropus a review on Apple or Spotify
or wherever you listen topodcasts.
It really helps listeners findour content, and thank you to
(56:48):
our support from our teams atVertosa and Wolfmeyer and to our
producer, Eric Rossetti.
Subscribe, share high spiritswith your colleagues, friends
and family and, as always, folksstay curious, stay informed and
, most importantly, keep yourspirits high.
That's a wrap.
Hey everybody , welcome to episode 85 of High
Spirits.
I'm Anna Rae Grabstein andtoday I'll be joined by a
special guest, but not myfantastic co-host, ben Larson.
We're missing him today.
He's out.
We are recording Thursday,april 24th 2025.
And we're going to be talkingwith Chris Walker from Hoodie
(00:26):
Analytics, all about 420, dataand the macro environment in the
cannabis industry.
But before we dive into thatconversation, I want to check in
with the audience.
I'm coming off a great weekend.
I had a celebration on Sunday420, that was this mashup of
Passover and Easter and EarthDay and 420 with a bunch of
(00:48):
families and kids at my house.
It was amazing.
And this weekend I am headed tototally unplug, to Yosemite.
And so if anybody hasexperience with unplugging
recently and turning off theircell phones and their Wi-Fi,
send me some love.
I'm realizing I'm a littlenervous about it, which doesn't
(01:08):
make me feel good.
I want it to be easier tounplug.
So, moving into a bit of news,I wanted to just call out and
appreciate the Green MarketReport, who's been bringing all
of us in the cannabis industrybusiness news for a couple years
now, and Deborah Borshart, johnSchroer and the entire team
(01:29):
have just had the business cutoff by Crane Media, who is the
owner of Green Market Report,and it's a sad day.
Media is really hard.
The cannabis media space iseven harder and we all are going
to be equipped with lessbusiness insights than we were
before.
So I hope that someone steps upto fill the gap and I hope that
(01:50):
all of us really stand behindthe existing media groups, like
Marijuana Moment and Cultivated,and support them in their
efforts to make sure that we cankeep getting good information,
because we need it and it helpsus to be smarter and more
thoughtful in everything that wedo as leaders in the space.
Just a couple quick news updates.
Today, maryland just passed alaw allowing cannabis businesses
(02:14):
to convert to ESOPs, which areemployee stock ownership plans.
We've talked about ESOPs on thepodcast before.
We had on Darren Gleeman, who'sa banker that facilitates the
transactions of cannabisbusinesses to become ESOPs, and
it's a really, I think, usefulstructure for businesses that
can become employee owned butalso have an exit path by being
(02:38):
able to sell to the employees.
So the founders and theexisting cap table can find an
exit that isn't necessarily anacquisition by another company,
and so this is good news forMaryland cannabis founders and
also for Maryland cannabisemployees.
Of note, there are some states,like the state of Washington,
(02:58):
that doesn't allow cannabisESOPs at all, and that is a
strange thing in my opinion,considering that there is so
much effort to create equity incannabis that a state wouldn't
allow it.
And it has to do withdisclosure of owners and the
state thinks that having thecompany held in a trust, which
(03:19):
is the way the ESOPs are formed,doesn't facilitate that level
of needed transparency.
So Maryland is allowingcompanies to convert to these
ESOPs and allowing them tobypass a five-year transfer
restriction on licenses early toconvert.
So this is good news.
Nice to have some good news outthere for operators.
(03:40):
Another thing to touch on isthat the Wine and Spirits
Wholesalers of America, oftencalled the WSWA, one of the
largest alcohol tradeassociations in the US, has been
in Washington lobbying forfederal framework to allow
cannabinoid infused beverages.
The WSWA is urging lawmakers toclarify rules around hemp
(04:02):
derived cannabinoid products inthe next farm bill and the group
said in a press release quotethat it believes the next farm
bill should explicitly allow forthe production of only
naturally derived THC productsfrom hemp, specifically Delta-9,
while explicitly grantingindividual states primary
(04:23):
authority to regulate,distribute and sell, including
allowing states to prohibit andto ensure that consumers over
the age of 21 are the onlypeople buying these products.
So this is really interestingto see the WSWA planting a very
clear flag on their policyagenda as it relates to cannabis
(04:44):
beverages and their commitmentto rallying behind the farm bill
as the path forward.
So, yeah, there is lots ofother news in cannabis, but we
don't have the Green MarketReport to help us have access to
it as easily.
So we will keep trying to bringyou the things that we think
are most interesting here onthis show, but now we will
transition into bringing on ourguest.
(05:06):
Today's guest has been behindsome of the biggest insights in
cannabis commerce.
Chris Walker is the presidentand chief commercial officer at
Hoodie Analytics, where he'sleading the charge on helping
cannabis companies make betterdecisions with better data.
Chris started his career atProcter Gamble and went on to
become an SVP at Nielsen, theglobal leader in audience and
(05:28):
market analytics.
At Hoodie, he brings decades ofexperience in CPG, retail and
tech to the most complexregulated market that there is
cannabis.
He's a straight shooter, a dataevangelist and a believer that
execution is everything, so I'mexcited to bring Chris onto the
show today.
Kris Walker (05:44):
Welcome, chris, thanks for having me Very good
to.
It's great to be here.
AnnaRae Grabstein (05:49):
Awesome.
Yeah, we set this up a longtime ago because I knew that you
would be a great person to comeon this week after 420 and
share with us some of thenumbers.
So tell me, was it a wild 420in the industry?
There hasn't been a lot of talkabout what happened.
Kris Walker (06:08):
So 420, as in the industry this year, it does
unfortunately look like it was abit of a wash, you know, I'm
not going to say wash out, youknow, because you know there was
still some strong, there weresome strong performances on 420
by, you know, by some states andsome specific players.
But in general I think theindustry fell victim to 420
(06:33):
falling on a Sunday which wasalso Easter and also the
Passover, and there's just a lotof things that were pulling
people's attention away fromwhat is traditionally a stronger
day.
So we did get some decentresults overall, but to find
them you really need to lookacross the entire weekend and
(06:57):
even a couple days before tolook at that overall
contribution around the 420holiday.
AnnaRae Grabstein (07:02):
Yeah, well, historically, cannabis has been
basically the cannabis's versionof Black Friday, the highest
sales day of the year, whereas420 this year fell on a Sunday.
It seems like, like youmentioned, the industry was
really trying to promote thiswhole week of 420.
And so if you look at the wholeweek, it seems like, from the
data that you shared with me,that Friday and Saturday were
(07:25):
bigger days than Sunday and that, overall, there was still an
outperformance from a regularweek.
It was just a pretty steepdecline from the 2024
performance.
Is that right?
Can you give us some actualpercentages?
Kris Walker (07:38):
Yeah, it was still a good week and we had, you know
, and obviously you know, as I'mtalking in general generalities
across the you know, averagesacross the entire industry.
I mean, there there are somedispensaries who just killed
right, some brands just killedit, uh, but uh, but in general
it was definitely a way betterweek than a normal week was
sunday was way better than anormal sunday.
(07:59):
But if you look year over yearat the overall performance, like
like the entire weekend weekend, the lift that it was, it was
roughly about 12 percent softerthis year than than last year.
If you look at across theentire weekend and you know,
obviously looking for 20 versus420, there was a significant
(08:19):
delta because you're comparing aSaturday where, like,
everything was concentrated, toa Sunday, which is a softer day,
easter Passover, everythingelse going on that day.
But again, probably the numberthat most people are going to
care about is the overallcontributions to their business
and we probably saw about 12%across the entirety of the US,
(08:40):
about a 12% hit versus last year.
AnnaRae Grabstein (08:42):
How do you interpret the shift in consumer
behavior at a macro level?
Do you think that people areless interested in 420, that
this is really just because ofEaster and Passover and it being
a Sunday?
How do you think about this?
Kris Walker (08:57):
You hear different things.
So, at the end of the day, I dothink there is a lot of
different noise and messagesthat consumers are that are
pulling at consumers attention.
Every single, you know, everysingle day.
These days, I mean, the mediais, unfortunately, something a
lot of people are trying to stayaway from.
(09:18):
Right now, you know, with thestock market challenges, people
may not be as excited aboutstocking up on their favorite
cannabis products because theydon't know what the future is
going to hold.
What we do know is as a fact isthat you know you saw some
pretty significant demographicdifferences and where you had
the 420 lifts, and so you knowareas that you know are more
(09:41):
suburban, people that havefamilies and are probably
celebrating Easter and doingdifferent things on Easter
itself, you know, did not getthe same kind of uplifts that
they had, that they had lastyear.
Whereas you know, if you lookat younger areas that are
predominantly younger urban,you've got a bit more
consistency and performanceversus a year ago and
performance versus a year ago.
(10:02):
So that would lead me tobelieve that there is definitely
a stronger impact because ofthe unique holidays that fell on
that day itself, versus anysort of macro consumer trends
away from 420, the holiday.
AnnaRae Grabstein (10:15):
Do you guys track promotional saturation and
discounting in your data?
Can you tell how much somethingwas discounted?
Kris Walker (10:22):
We do, we do, and discounts this year were.
It's obviously it's a big blendof averages.
We did see gummies inparticular seem to have a little
stronger discounts this yearthan we saw in previous years,
but overall we did see thediscounts tended to be spread
(10:46):
across the week.
As you know, I think inprevious years when we had 420
on a Thursday, Friday orSaturday, a lot of retailers
used that to provide very uniquepromotions just on the day.
But I think, I thinkpreemptively, a lot of retailers
this year decided to make their420, you know the 420 discounts
(11:07):
spread across the week and sowe do see that people were
purchasing more on discount thisthis year throughout the week,
not just isolated to that onesingle day of 420.
Are showing that the percentageof sales on discount on Tuesday
, Wednesday, Thursday, Fridaythis year are much higher than
(11:28):
they were last year.
Versus last year, it did seemlike everyone was like I'm going
to wait and buy everything at420 because I'm going to get
these amazing deals.
AnnaRae Grabstein (11:35):
Well.
So, with all this insight aboutthe deals and the performance
at the store level, do you thinkthat the industry needs to be
rethinking this holiday basedsales focus in the context of,
like, a more maturing consumerand that behavior is shifting
towards just keeping products athome all the time and that
cannabis is just like havingbeer in the fridge?
(11:58):
Or is this holiday based salesfocus something that really is
meaningful and that and thatretailers should pay attention
to build strategy on?
Kris Walker (12:07):
I um, I personally believe that, uh, retailers, you
know, and brands, we, you know,we holidays create excitement,
you know.
I I mean we know, I meanValentine's day and you know
things like that, like it's, youknow, and you've got, um, what
is the?
And you know things like that,like you know, you've got what
(12:28):
is the Amazon holiday?
I should know this offhand.
AnnaRae Grabstein (12:31):
Yes, the Amazon holiday.
It's a fake holiday.
Amazon created it.
It's primed.
Kris Walker (12:37):
You know, but, I, mean, yeah, but you have all
these manufactured holidays.
Why do we have them?
Because it gives us somethingto talk about, it gives us
excitement, it gets some, it'snewsworthy and people talk about
it Like it's like I don't.
(12:58):
I do not think it's a smartmove to go away from it and we
look to leverage as an industryas much as we can.
Now should we be smarter abouthow we promote and how we
communicate and how we managestock and inventory.
A hundred percent.
We need to be way better aboutit, make a conscious effort to,
(13:28):
you know, not necessarily giveaway product at half off, like
on 420, because they know whenthey do that their customers
will load up on that day andthey won't be back for the next
or the rest of the month, youknow, and then?
And so what?
AnnaRae Grabstein (13:36):
that doesn't drive a lot of benefit for that
retailer.
Kris Walker (13:38):
Yes, it's great for the consumer because the
because the the consumer wasable to, you know, obviously
benefit from it, but from theretailer, who's who's in the
business to make money, it hurtsthem longer term and so you
know.
So we are seeing that consumer.
You know, smarter retailers arerealizing that consumers are
going to.
(13:59):
We need to give them a reasonto come out to celebrate this
plant and to celebrate theproduct.
But it doesn't always have tobe through getting 50% off
discounts.
And you know and you referencedBlack Friday earlier, and I
mean you see that happening inBlack Friday now as well Like
the discounts went from everyonelining up outside the stores
(14:19):
the night before so they couldbe there at 6 am when they open,
and then it became a wholeweekend and now it's a whole
week, and so you're gettingthose discounts spread out and I
don't know that there's a lot.
You know the retailersthemselves are getting as much
of a benefit but they're tryingto extend the opportunity longer
(14:40):
and you know, to some extent itplayed out a little bit that
way this year just because ofthe nature of the holiday.
Like I said, overall, like youknow, it was a 12% hit that
everyone took on average.
AnnaRae Grabstein (14:52):
Yeah, I like what you said about the
consumers having a reason tocome to the store, though I
spoke with my mom last night.
She's 75.
And and I I asked her how herweekend was and she said oh,
it's fine.
Oh, you know, your father wentwith his friend to the
dispensary on 420 and had somuch fun getting all of these
discounts and I thought, wow,when it has reached the 75 year
(15:17):
olds that they get discounts on420, it's like this is a real
holiday.
Now apparently it's reached themasses fully.
And it's true.
My dad went with one of hisother 70-year-old plus friends
and they went to the dispensarytogether and they came home with
a bunch of very strangeproducts that they would have
(15:37):
never purchased otherwise, and Ithought that was a good sign,
because they bought stuff thatthey wouldn't have already been
going there to purchase.
He often goes and buys flour orpre-rolls, but he came home
with tablets and tincture andother fun things that the bud
tender suggested.
It seems like it was positivefor introduction of new
(16:02):
categories in that example, butI don't know if that's true
across the board.
Kris Walker (16:09):
That's funny.
You referenced your fatherbeing 75.
So I mean he's right on thecusp of what our demographic age
cut off.
We looked at all the data andblocks of 65 to 74, 75 to 84, 85
plus and actually the 75 to 84bracket actually this year had
(16:33):
the biggest fall off on the forthe weekend.
Now I do think you know yourfather being 75 to 84, he's on
the, he's right on the borderthere.
And actually the 65 to 74s werefairly yeah, it was a good year
for 420 for those folks.
But we did see a fall off inthe older consumer like 75 plus.
(16:56):
There was definitely a fairlysizable fall off on their
investments in 420 this year,off on their investments in 420
this year.
And the other one that was kindof interesting was the 45 to 54
, which is kind of thegeneration where this all
started, and so that one agegroup dropped about 20%.
AnnaRae Grabstein (17:19):
That is interesting.
What about brands?
We didn't talk about what yousaw in terms of brands or
specific form factors.
What popped out of the data?
Yeah, and that it's a little.
Kris Walker (17:30):
it's a little all over the board, you know,
depending on, depending on thestates and and you know
obviously the the specificlocation of the specific brand.
So we had what we did find isthere was a decent amount of
trend of folks using non corebrands to really drive people in
(17:53):
with just some crazy discounts.
And so, seeing some of thelargest lifts that we saw were
on brands that most people onthis call would never have heard
of, like they were isolated incertain areas.
They used this as a chance toget their name out and get that
distribution and they blewthrough the product at very high
(18:15):
discounts and got great uplifts.
But again, it's kind of a meansto an end for the retailers.
I'm not sure that the branditself is going to get the
follow-on impact.
You know, and taking what was a75% discount and now you know,
and now moving, you know tryingto get a consumer away from
doing that, you know, and nowmoving, you know trying to get a
consumer away from doing that,you know is going to be
(18:36):
challenging.
But we did see, you know I meanFlower in particular, you know,
was a little all over the boardwith top brands.
I mean you've got a lot of thenormal you know the normal names
in there, you know.
And Edibles, again, a similarway.
It was less the known brandsthat got the biggest uplifts, as
(18:58):
much as it was these, you knowthese newer, you know some of
the newer and kind of less top10 gummies and less top 10
edibles that were getting thebiggest bumps, edibles that were
getting the biggest bumps, andagain, I mean for better or
worse.
I think some of that probably,you know, comes down to the fact
that you know the larger brandsprobably have a bit more
(19:19):
discipline in pricing and marginmanagement and you know, they
know that this is still anindustry that people are in to
make money and you know.
So you know, getting a 300%lift is probably not what
they're looking to do.
Their goal is to grow theirshare over the duration, not
just on that one day.
AnnaRae Grabstein (19:40):
Sure.
Well, so, starting to shiftaway from 420, I think that my
takeaway is from what you'veshared is that it wasn't a total
loss but it just didn't matchpast impact for a lot of reasons
and that it still remains avital sales opportunity and that
, looking to 2026 and and thefuture, like retailers shouldn't
(20:01):
give up on promoting 420.
Just maybe getting a little bitmore grounded and in realism of
the different fundamentals thatare going to drive behavior
around the holiday makes sense.
Anything else that we shouldmention about 420 before we move
on to just bigger discussionabout data.
Kris Walker (20:19):
You know, a lot of the trends that we're seeing at
a macro level were pronouncedhere as well.
I mean pre-rolls did very well.
I mean we've seen a big movetowards that.
Pre-rolls as a convenient formfactor.
It's probably the strongestgrowth this year relative to a
lot of the other categories andwe saw that continue in 420.
(20:40):
Flower was king once again.
It was interesting, like I said,just to look at those brands
that chose to go with heavy,heavy discounts.
Versus a year ago.
I think some of your morenational brands were just more
thoughtful about how theydeployed their programs, so it
(21:04):
wasn't just around X amount ofpercent off or dollars off, but
come in and you get a hat or youget something that is
meaningful.
That will, you know, maybeincentivize you to come back and
and pay full price for myproduct the next time you try it
, and so so anyway, there's justsome, I think, some smarter,
some smarter behavior, you know,for for folks that probably
(21:26):
felt like they had to dosomething different this year
because because the product,because the date was in fact on
a, on fact on a special day witha big Easter than just a normal
Saturday.
AnnaRae Grabstein (21:37):
Sure, I love this.
You just said smarter behavior,and I think it's a perfect
segue into this concept of justhow we're all running our
businesses, how cannabisbusinesses are deploying smart
insights to make decisions, andI've been in this for a long
time and there is more datatoday than there's ever been.
There are there are multipledifferent companies that are
(22:00):
selling different types of dataand and I'm curious for you to
like give us some yourperspective on where we are in
the evolution of creating dataand using data in cannabis, as
someone that has workedpreviously for some of the
biggest data companies in theworld and and CPG companies that
(22:23):
are experts at deploying data.
Yeah, yeah, what are you seeing?
What's the environment like?
Kris Walker (22:30):
So it's.
It's funny.
I've got a my one of myco-founders, kelly Bernalza-Hall
, and I were talking about thisyesterday because we're prepping
for a keynote that we're doingat MGEMPAC next week on market
trends, and I was raising to her.
I was like what would right Ifwe, if you were, if you were to,
(22:54):
if you know sorry, zooming outfor a minute, if I showed you,
if I asked you like what's goingon with pricing in the past 12
months or 18 months or two years, you like everybody else would
say, oh well, it's been comingway down, pricing's coming down,
you know, and surprise,surprise, it's doing it again.
(23:14):
Michigan flower pricing is down20% in one year.
20% and you see it across theboard.
Everyone's like, oh well, it'sa new market, so it starts high
and it starts profitable, butthen after a while it becomes
less profitable and peoplearen't making money anymore.
And why is this happening?
(23:35):
Why is it continuing to happenover and over again?
And, to be fair, you've gotsome markets like.
Missouri is a good example.
AnnaRae Grabstein (23:44):
People are still making good money in
Missouri.
Kris Walker (23:46):
Like it's a good market.
You know that's.
You know you can get goodproduct there.
Operators and brands are makingmoney in Missouri and you know
they have a price point that'sprobably a bit more sustainable
for allowing that to happen.
So it's a long winded way ofsaying.
You know Kelly and I weretalking about this and you know
(24:06):
I was.
I was hypothesizing, like youknow, if we were just able to
snap our fingers and go back intime like three years and take
all of the cannabis operatorsand just keep in mind we are a
young industry.
Lots of people are coming intoit for the first time.
We may not have the experienceof some of these bigger brands
and bigger retailers and we wereit.
(24:42):
So we had the ability toreplace every operator with an
experienced you know person whoran Kroger or person who ran you
know, I don't know BananaRepublic.
You know these experiencedretail operators are used to
using data and making smartdecisions and not being complete
like as reactive to to changesto what the guy across the
street did, would it make adifference?
Would we still have $40 eighthpricing in Michigan or would we
(25:02):
be where we are now at $20?
And Kelly said to me, she waslike I'm not sure it would make
a difference.
It might help, because one ofthe theories is like, you know,
we just need, we need to educatethe industry.
We need to give that, you know,let people like have more you
know, get people that are moreexperienced to learn how to do
these cool things.
(25:23):
You know Kelly's point.
To me she's like well, chris,the other, the other issue is
just the data hasn't been thereLike.
It just hasn't hasn't.
So even if you have the bestpeople there, if you don't have
the data and tools to be able tomake the right decisions,
you're still using gut feel andhaving to be reactive.
And so I do think there's thiscombination of the industry I do
(25:45):
think has evolved now where thedata and tools are available,
but we still also have to havethe discipline and the people
and the accountability, even toeach other, to say, hey guys,
maybe it's not a good idea forall of us to just drop our
prices by 50% on 420.
AnnaRae Grabstein (26:05):
Maybe we can get the same results we do.
I want to jump in because thisis something that's this is a
big deal, as is sort of thisendless race to the bottom with
pricing and and I like thatyou're bringing it up, and I'm
curious to understand from yourperspective what is the
discipline that data can supportto help people not lower their
(26:25):
pricing, because I perceive thatthe the price compression is
being driven by oversupply anddesperation, and so people are
trying to just bring in cash asfast as they can.
They're not even thinking aboutthe market, but then it's
having these market rippleswhere then people are having to
follow, and it's just thisendless race.
(26:45):
But what is the data that canhelp us to better manage pricing
?
I mean, I probably shouldanswer this two ways.
Kris Walker (26:55):
I will answer the technical side first.
So you know there is a volumeprice trade-off equation, right?
It's called price elasticity,right?
So the way you should think ofthat is if I drop my price by
10%, how much more volume am Igoing to get?
Am I going to get more peoplethrough the door?
Am I going to sell more stuff?
Am I going to get more peoplethrough the door?
Am I going to sell more stuff?
Am I going to make more money?
Okay, and the answer might beyes, I should drop my price by
(27:18):
10% because it's going to bring20% more to my bottom line.
That's a great win-win.
If I drop my price by 20%, am Igoing to make more than if I
did 10%?
Or am I going to make more thanif I did 10%, or am I going to
make less?
And so this concept of priceelasticity basically allows you
to understand the impact of whathappens if I drop my price by
(27:42):
10%, 20%, 30%, and you can dothe same thing for promotions.
And the data is there, right,like the data now exists with
Hoodie that you can startmeasuring the impact to your
business.
If you drop your price, youraise your price.
What's going to happen?
Because, by the way, everyone'spetrified of raising prices.
Oh my God, a raised price.
(28:02):
Look at that.
I could tell you in the CPGindustry and like other
industries that, like I that Icame from, you know it is that
is much more of an emotionalconcern than a practical concern
, because generally, when youraise your prices, yes, you're
going to lose a bit of business,but you're going to make more
(28:24):
money, so you should probablystill do it.
Now, if you get to a pointwhere you're suddenly at 30%
higher than anybody else, thenyes, that's going to hurt you,
but you know, if you're, ifyou're, if you're on the margins
, then you know there's a wayyou should be able to make more
money by leveraging this idea ofprice elasticity and and that.
(28:46):
So that's, that's theconceptual side of that.
So that's the real technicalside.
So that's the real technicaldata side.
The other side is there are waysthat you can manage pricing in
order to maximize your profitsand, like you said, the whole
point about oversupply.
Oversupply is great.
(29:06):
So I've got a lot of product.
That means all the brands canget product for cheaper.
Smart retailers can negotiatebetter deals Now a smart
retailer also.
There's no need for them to bepassing on that price discount
to the consumer.
And so what we saw a couple ofyears ago is all the brands went
and you had a bunch ofretailers sitting there and said
(29:27):
thank you very much.
I love the fact that I can nowmake two times the amount of
profit on this product than Idid just six months ago, but I'm
going to hold my price flatbecause, at the end of the day,
the consumers are willing to payfor it.
They're going to pay for a goodexperience, they're going to
pay for good brands.
They're going to pay for thatbrand experience, and I don't
(29:56):
need to just throw money awaybecause I'm getting a better
deal and so so, having thediscipline to for a retailer to
understand what's going tohappen if I do these things not
just today, but for the longerterm it's it's important, and so
so I mean that's you know, andagain, I can go on about the.
You know there, there's,there's.
So go ahead.
I was going to say I just lovethat you're talking about the.
You know there, there's, this,there's so go ahead.
AnnaRae Grabstein (30:13):
I was going to say I just love that you're
talking about this as adiscipline, because I think that
it it it really is in thatleaders are being, I think,
pressured by market forces andwhat they perceive to be
consumer behaviors to go down,down, down.
But sticking with with thepricing that is profitable and
(30:34):
that makes sense in the marketis what you're saying can be
more profitable at the retaillevel.
And this concept of when theprices are going down at
wholesale, of keeping yourprices steady in the market I've
been advising people to do thisfor a while it's like your
store isn't profitable yet, soif the product costs less money,
this is a good thing.
This means that you might makemore money per transaction,
(30:56):
which is what you need to not bein the red and, in general,
like we need to be moving out ofthe red in this industry and
into the black and up into theright.
And the way that we do that isby being able to see clear lines
of profitability and justhaving set markups, especially
if stores were just always goingwith like a 2x markup as an
(31:18):
example, but then all of asudden, the prices start
dropping of their wholesalesupply and they stick with that
2x markup but they're notselling more product.
All of a sudden their profit isdeclining and they can't pay
their staff, they can't paytheir benefits, they can't pay
their rent, because the samenumber of transactions and the
same number of units arehappening in the store but
(31:40):
they're making less dollars.
And there's this differencebetween margin and dollars that
I think is really important forpeople to understand and to have
a target of you know what isyour target average dollars per
transaction as opposed to justlooking at what is the margin
that you were able to capture onthat transaction can be, I
(32:01):
think, a good way to start tocreate that discipline for an
operator to be able tounderstand, kind of how it
trickles through the wholebusiness.
Kris Walker (32:11):
Yep, and that same concept and you know not to go
away from pricing too much, butthat same concept is there for
the taking across otherdisciplines in the industry as
well.
How, if I have a brand and I'vegot one of the most expensive
costs for brands is theirselling organization, right,
(32:33):
they've got really smart, greatpeople that are knocking on
doors selling products and youknow and they live and die by,
you know their success withtheir sales teams, right?
And so if you look at the costof that the sales organizations
you look at them as an asset andthe cost of that asset you want
to figure out what is.
How do I maximize the return?
Like, for every dollar I'mspending with that sales guy to
(33:04):
get back, what's the return forme as a brand, for my profit?
And again, just looking at itfrom a process perspective and
just with dollars and cents anddata, we can say, hey, you know
what, there are 100 differentaccounts I could go after.
Like, there's a hundreddifferent stores in my market
that I could go after that arenot buying my product today, and
you might have 10 of thosestores that I'm just using silly
numbers.
(33:24):
10 of those stores are sellinga thousand dollars a year of
stuff, and another 10 of thosestores are selling a million
dollars a year of stuff.
And so should I be spending thesame amount of time with the 10
that are doing a thousanddollars as I, as I should be
with the 10 that are doing amillion dollars?
And like, intuitively,obviously the answer is no way
(33:44):
there's, because if I get, if Iget, you know 5 percent share of
the million dollar store,that's worth you know what
$50,000, versus if I make 5% ofthe thousand dollar store,
that's $5, you know, and or $50,you know, and so that's that's
a very different return for thesame amount of time in many
(34:06):
cases.
Right and so so.
So you just so trying to builddiscipline around your major
cost drivers and how you go tomarket, say, maybe I don't need
to be in every single dispensaryin Michigan, I want to be in
the 50 percent of stores inMichigan that actually do 80
percent of the total Michigansales volume, and and that is
(34:27):
the cost to doing that is somuch less.
But the you know, but the ROIthat I have for every hour that
my sales guys are spending is somuch higher.
AnnaRae Grabstein (34:38):
Yeah, do you see that, as one of the common
pitfalls that you encounter inworking with brands is that
they're spending the same effort, resources, dollars on all of
the accounts, as opposed tofocusing on the most important
ones?
Kris Walker (34:51):
Yeah, I mean again.
I mean, sales guys are smartand and, uh, I mean so they,
they have some indication oflike this this is a big account,
this is a smaller account, um,you know, but it.
But there's just and and don't.
I will tell you, just to bevery fair, there are a lot of
organizations that are gettingtheir act together, that are
starting to do a really good jobat this.
(35:11):
Okay, and and organizationsthat are getting their act
together that are starting to doa really good job at this and
layering in account tiering,like by this is an account of
mine, but I should have 10% oftheir business, and right now I
only have 2%, and if I can get10% instead of 2%, that's worth
$100,000 a year to me.
So I'm willing to spend Xamount of dollars in order to
get that extra hundred thousanddollars Right, and being very
(35:34):
disciplined about assigning acertain value and a certain
opportunity to every account ina market and then and then and
then basically incentivizing mysales teams to behave in certain
ways to capture thatopportunity, and then tracking
their success of doing thatthrough, you know, and then
tracking their success of doingthat through, you know, a tool
like Hoodie, that basicallyallows you to do that and hold
(35:56):
everyone accountable, to say,figure out who should get their
bonus and who should get fired,and like it's not just about
relationships anymore.
I mean, and some of it is right,I mean you still have there's a
lot of, a lot people matter,right, and there's still a lot
of that going on.
So I'm never for one minutegoing to gonna say you know that
that people don't matter,relationships don't matter, they
(36:17):
do like they matter my business, you know and you know, but
it's it's the relationship.
Relationship still has to begrounded in data.
Like you still have to say, hey, if you do this for me, it's
gonna make me this, it's gonnamake you this amount of dollars,
and then you should hold meaccountable for delivering
against that.
And if I make you that money,I'm going to expect you to come
(36:37):
back and buy more stuff from mebecause you're going to make
more money.
AnnaRae Grabstein (36:40):
And like and that's cyclical.
I like that you're talkingabout some of the things that
are working for people and thatwe're getting into.
What I like to be is likeoptimistic and and and being
able to point to some of thestrategies that can move the
needle.
So a company that decides thatthey want to focus on this one
account, that you said thatright now they have 2% of the
business, they want 10% of theirbusiness, and that that could
(37:02):
move the needle for theircompany, the companies that are
winning at a strategy like that,when they're saying, okay,
we're going to spend more to tryto capture more of the
sell-through in this store.
What are some of the?
Kris Walker (37:17):
I'm going to start with the one that everyone has
been using for a while.
Like build relationships, buildtrust, be creative.
AnnaRae Grabstein (37:26):
OK, like taking people to the basketball
game.
Kris Walker (37:30):
It depends.
You have to define who thepersonality is.
You know there are differentpeople that are going to be
motivated by different things.
Ok, so let's I'll put that onthe table.
You should still use creativityand relationships, do
relationship mapping and allthat kind of discipline stuff.
But the other thing that youhave the opportunity to do is to
(37:52):
become a trusted partner ofthat retailer by showing them
how much you can help them growtheir category Right, and not
just, maybe, with your products,like you might.
You know, like I hesitate touse any specific, specific
brands in a public forum likethis, but you know.
But let's say you are withSmokies and you know, and so and
(38:15):
you go in to say, hey, you know, hey, retailer, that I want to
sell a bunch more stuff to.
You know, hey, retailer, that Iwant to sell a bunch more stuff
to.
Did you know that?
You know your gummy category isperforming about 10 percent
softer than other dispensaries,just like yours, like, in fact?
You know you did about onehundred thousand dollars in
gummies last month, but all ofyour other competitors that are
(38:38):
just like you, they did aboutone hundred ten thousand dollars
and let me tell you.
Let me tell you the things thatthey are doing that are a little
bit different than you are,than you're doing right now, and
and you know, and and and maybewe can help grow that together,
right?
So in the CPG world that I came, you know I came from, it's
(38:58):
called, it's a term calledcategory management, right, and
so the idea is you're not justthere to sell your own products
and your own stuff.
Yes, smokies wants to sell asmany Smokie gummies as they can,
but the smart Smokies rep isgoing to tell, is going to
partner with that retailer toteach them how they can grow the
whole category.
And then you know, and it mightbe, and it may be like hey, you
don't.
You don't actually need 30different flavors of Smokies.
(39:20):
You know cause, cause, you know.
But what we know is that youneed, you need X amount of
flavors of Smokies and you'regoing to need something that's
even more super premium.
And then we and we know thatyou also need a value option.
So make sure that you'remeeting all of your customers
and you've got enough valueoptions of mid tier enough here.
And and you know, becausewhat's going to happen is, if
(39:43):
you are helping that retailergrow their business, they're
going to trust you, they'regoing to put more stuff of yours
on on, you know, into theirstore and you're both going to
win together.
And that that's that's honestlylike my, what I say, my number
one recommendation, folks.
It's like don't be soself-interested and remember
that, at the end of the day,your job is to help that
(40:05):
retailer grow their business,and if you can give them other
tools and tips and data andtricks to allow them to do that,
they're going to want to spendmore time with you and more
money with you.
AnnaRae Grabstein (40:15):
Yeah, it's a great.
It's a great tip, and movingtowards a better, more strategic
category management in cannabisis something we should be
talking about more, so I like it.
Thank you for that.
You alluded to thisrelationship with dispensaries
and I think that more and moreit becomes clear, as brands are
in multiple states or even ifthey're just becoming more
(40:36):
successful in their existingstate market, that dispensaries
are very different and that youcan't have the same strategy for
all stores.
There are stores that are doingcentral buying through certain
hubs and distributing to lots ofdifferent stores.
There are stores that carryvery different levels of
inventory depending on theirstrategy.
I'm just wondering what youfind and maybe it's something
(41:01):
that you even just learned fromgetting to see all of the data,
but what is like a misconceptionthat people have about retail
channels and cannabis?
Kris Walker (41:11):
I mean you are correct.
Like I mean, particularly inthe world of the MSOs.
I mean there's a lot of centralbuying and you know, and other
challenges that a brand may havethat does not have their own
vertical distribution andworking with those folks.
You do need to segment yourcustomer base right.
So this idea of segmentingcustomers and creating
(41:31):
attributes, you know, and againyou can use a tool like Hoodie
and go in, you can create allyour own attributes and tag a
dispensary to say this one is aheavy promotion store, this one
has a lot of competition, thisone's sitting right on a
non-legal border, this is ahighly affluent dispensary and
like, we have a lot of that kindof baked in.
AnnaRae Grabstein (41:52):
But you can also create your own.
Kris Walker (41:54):
It could be, you know.
AnnaRae Grabstein (41:55):
I only visit this guy on.
Kris Walker (41:56):
Tuesdays and stuff like that.
But you are going to want tosegment your customers right and
because you know and stuff andstuff like that.
But you are going to want tosegment your customers Right and
because and you know.
And then again, my my numberone thing I tell everybody is
you segment, you segment yourcustomers around the
opportunities you're trying tocreate, and you know.
And then you know, and if youhave some that are not going to
(42:17):
be able to, you've got to.
You've got to handle themcentrally.
Then assign someone that rolethat is good at that and support
them with the selling storiesto allow them to be successful
in that role.
And it's another one of the.
I think one of the challenges wehave as an industry is because
there is so much fragmentation.
(42:37):
The job of a salesperson isinfinite.
It's like your job is, you'vegot.
If you ask the salesperson, thejob of a salesperson is is
infinite.
It's like your job is you'vegot.
You know.
If you ask the salesperson thejob description, they're like
well, I got these 95 things Ihave to do every single day.
And it's like how are you goingto be successful in doing all
those 95 things?
Because I get got it, john,you're really good with people,
but you are terrible withfollowing up with cash
(42:57):
collections and, uh, you know,and john and you know John may
not have ever been really goodat handling, looking at data,
telling stories with data.
So is there an opportunity tocompartmentalize those tasks in
order to give John a betterchance of being successful?
And it starts.
I really think it starts withsegmenting your customers around
things that you know of howthey purchase and how you know,
(43:22):
in order to give you the bestchance of being successful.
The obvious one is are theypaying their bills or not?
Like if they, you know your jobis to.
Your job is to is to make moneyand it's to stay financially
solvent.
And if I'm providing all of myinventory to somebody who's not
paying their bills, you knowthat that becomes.
That becomes challenging.
AnnaRae Grabstein (43:44):
This is.
This is a great point that, eventhough we're mostly talking
about brands selling toretailers and cannabis, that
that translates kind of acrossthe supply chain to no matter
what you're doing, this idea ofcustomer segmentation because
how often are we gettingpromotional emails from
companies that don't apply to usat all and what a waste.
(44:05):
Right, and what Chris, you'retalking about here is really
focusing on the outcome that weare trying to create with our
effort and segmenting aroundthat.
So, whether you're a retailersending out emails and text
messages to consumers, or you'rea brand that's trying to stock
(44:27):
your product in retail stores,or even if you are a lawyer that
is trying to serve the cannabisindustry, segment your
customers and try to serve thecustomers things that are going
to be valuable and relevant tothem.
It's so important because notonly can it drive the outcome,
but when you segment, when youdon't segment or you do it wrong
(44:49):
, people get offended and arejust like spam and leave me
alone.
You don't understand mybusiness and you're trying to
come at this the wrong way andit's it's a great way to uh, to
become a less trusted partnerand people to think that you're
just not thinking of them andyou don't know who they are.
Kris Walker (45:09):
Yeah, yeah, I think personalization and
segmentation is so importantacross I agree with you, uh,
like it's so important acrosseverything you do.
And you know, and I, I'm, youknow, I, getting back to our
pricing, pricing stuff that westarted this on in 420.
You know I I won't name names,but you know I, I, I sat in a
(45:31):
conference and there was a CEOof another data company who
basically told everyone at theconference that the you know
that, that you know they're,they've done all this analysis
and segment all the customersand and 80 percent of every
product is bought on promotion.
And so, because of that, youknow we are not doing a good
enough job to to meet the needsof the promotionally deal
(45:55):
sensitive consumer.
And it, like it just killed, itkilled me to hear Candidly, I'm
like, I'm like this, this isn't.
We need to be driving smarterdecisions as an industry right
now.
And and like segmenting because, like, like it, you know the
fact that 80 percent of sales,like, even if you believe that
(46:16):
number, 80 percent of productsare bought on promotion cannabis
.
That is because we as anindustry are behaving in that
way.
That is not a normal.
That's not normal consumerbehavior because, guess what,
you know, there were a bunch ofpeople that walk in that store
and they were happy to pay fullprice for your brand because
you've got an awesome brand.
But they're happy to take thediscount if you're going to give
(46:38):
it to them, Right.
So so I might as well take thediscount, but you just lost.
You know we call itcannibalization.
Like, I ran a promotion and theidea is that I want to get a
whole bunch more sales becauseof the promotion, not just
incentivize my existingcustomers who are already going
to buy my product anyway, right.
(46:58):
And so you have to ensure thatthe lift I'm getting is greater
than the cannibalization.
And and I and I, and right nowas an, as an industry, we've got
to acknowledge that there,there are plenty of people out
there that are happy to pay 40,50, a hundred dollars, you know,
for it, for an eighth of flower, if it's the right stuff, that
it's meaningful and it's, youknow, and and it it does, you
(47:24):
know it makes me feel a certainway, or it makes you know, it
just makes me feel good aboutmyself, and and there are a lot
of things that can you know.
You know it's the I've usedthis analogy a bunch.
But like you can get a candleat you know, you can get a
candle at Walmart for a buck.
You can go get the same candleat Bed Bath Beyond for $10.
Or you can get the same candlethat basically smells like
(47:45):
Disneyland on Etsy for $50.
It's the same candle but I willbuy that $50.
There's a bunch of people outthere happy to buy that $50
candle that creates a feeling inme and has an emotional
attachment to you know, feelinglike Disneyland and this candle,
(48:06):
and I'm going to spend that 50bucks and I'm going to tell my
friends about how amazing thismade me feel.
And guess what?
You know, you just made a wholebunch of money on and that's
brand equity, right, that'screating brand equity.
And that's the same candle andthere's no reason.
There's no reason we cannot dothe same in this industry.
AnnaRae Grabstein (48:26):
Yes, cheers to that.
And there's so many examplesoutside of cannabis of where
perception of quality love andlove of a brand has has driven
premium pricing, and thecannabis industry, for better or
for worse, has really degradeda lot of that.
(48:46):
And and people are justshopping on discounts because
they're so used to it.
They've been trained that way.
We need to untrain the consumerwell, so, as we're getting
closer to the hour, um, I'mcurious, as we start to to wrap
this conversation as a as aself-proclaimed data nerd what
are some of your favoritebenchmarks that you look at when
(49:07):
you open up the platform thatyou keep going back to again and
again?
Kris Walker (49:11):
I learned a while ago that this concept of leading
indicators versus trailingindicators so, being specific
about it, like sales, dollarsales or unit sales, that's a
trailing indicator.
That has already happened.
What you want to be measuringare the leading indicators of
(49:33):
sales, the things that you cancontrol that will give you those
sales results.
So we know the number onedriver of sales is distribution,
and you know.
So.
Points of distribution how manydispensaries am I in and how
many SKUs do I have in each oneof those dispensaries?
That is a point of distributionand you know, if you can get
(49:55):
the points of distribution,you're going to eventually get
the sales right.
And so you want to track leadingindicators right.
You want to be managing to aprice point or a price gap.
So you know, in the CPG worldit's often called DSMP,
distribution, shelving or shareof shelf, merchandising and
pricing right.
(50:15):
So those are your four leadingindicators that if you go to any
like head of sales in the CPGworld, they'll often, like, have
a printout behind them on theirdesk with their DSMP KPIs that
they know if they deliver onthat they're gonna get their
sales results, they're gonna gettheir bonuses, their teams are
gonna be happy and all is good.
And so I do really try to focuson those leading indicators
(50:40):
anytime you can.
AnnaRae Grabstein (50:40):
I love that Cool.
Well, so, looking ahead, I knowthat hoodie is continuing to
roll out some new stuff.
Why don't you tell us whathoodie is up to in in 2025?
Kris Walker (50:54):
Awesome thing, yeah , the the, the major excitement
where we are.
We've been very fortunate.
We've got a.
We've got a lot of hoodieevangelists out there.
I think we're working with 13of the top 20 brands in the
market right now, which is moreand more each day.
We've been very blessed andfortunate with the support we've
had from this industry and, tothat end, we're excited about
(51:21):
launching a new service calledHoodie Connect, and Hoodie
Connect is going to allow adispensary, a retailer and a
brand to be able to collaboratedirectly with each other, you
know, on KPIs and on measuresthat will allow them to both be
more successful.
So imagine a retailer no longerhaving to like take a hundred
phone calls from a hundreddifferent vendors to say how did
(51:41):
I do this week?
Come on, Jane, tell me how Idid.
And now, and the retailers thathave been approved, you know
we'll be able to actually justsee the results directly.
They can set KPIs, you know,around.
You know we're going to agreethat we need to hit at least,
you know, five units, five unitsper week on this product and we
(52:02):
need to hit a certain margintarget within 90 days.
We can establish that and theneveryone's very transparent with
what they need to do to achievethat, and if a brand doesn't
achieve it, they see it and theycan come back to the retailer
to say you know what it didn'twork out?
I'm right below it, but I thinkif we ran this extra promotion
or if I did some sampling withyou or we did some in-store
training, we're going to getthere, and so it just allows a
(52:25):
lot stronger collaboration.
And then, obviously, on theordering side, it gives the
brands the opportunity to comeup with recommended purchase
orders for the retailer, basedoff of how they're seeing their
products performing in marketand how products are performing
in the industry as a whole.
So, hey, I think this otherproduct that we're seeing sell a
(52:47):
lot of stuff in dispensariesjust like you in Illinois, I
think would add this amount ofvalue to you.
So why don't we try a case ofthat instead of this other one
that's lower performing thistime around and just helping to
facilitate that buying andpurchasing transaction?
So keep a lookout for HoodieConnect.
It's going to be launching herein the next couple of weeks.
You're going to see a lot moreabout this.
(53:08):
We're very excited to bepartnering with some of the
biggest and most exciting brandsand MSOs and retailers in the
space with this.
So more to come.
AnnaRae Grabstein (53:20):
It's great to hear about companies that are
continuing to innovate withinthis compressed market
environment.
We need to keep moving forwardand having that growth mindset
to be able to do things better.
So I love it.
So thank you for sharing that.
My last question before we moveto the last call is just if you
were going to give a tip forbrands to take just one step
(53:41):
this year towards better data,how would you suggest that they
get started?
What would be the first step tobecoming more data-driven?
Kris Walker (53:52):
You're only giving me one.
You're making it tough.
You can give a couple if youwant.
I'm going to say so as anindividual or brand.
One of the most the best thingsyou can do is is to basically
basically showcase the valuethat a data driven insights
(54:12):
contributed to my business.
Right, and you know, becauseone of the one of the challenges
you have in any organization ischange, right?
Well, we've been doing it thisway for a while.
It's been, it's been fine.
One of the challenges you havein any organization is change,
right?
Well, we've been doing it thisway for a while.
It's been fine.
Like I don't need to use thisstuff.
I got a good relationship withPaul.
He's going to buy stuff from me.
It's fine, you know.
But if I could say, hey, we didthis one thing differently.
(54:38):
We used data and look, you know, paul still bought stuff from
me, but his average order sizeis now $2,000 more than it used
to be because he's now seeingthis data, so capturing that
insight and then sharing it andcommunicating it.
If you talk to any of mycustomer success guys at Hoodie,
they are awesome at saying, hey, tell me your wins and share
(55:00):
your story, and half of it.
It's not for us candidly,because we want them thinking
about it and documenting it.
So they're telling other peoplein their organization to say,
hey, if up in the morningbrushing my teeth, taking my
(55:23):
shower and looking at the datatoday, so I could define what I
need to spend my next severalhours doing.
If we can get to that point asan industry, we're going to be
making a lot more profit, a lotmore money.
AnnaRae Grabstein (55:36):
Thank you so much.
Well, chris, you've shared somuch great stuff with us today
and it's time for our last call.
So, chris, what's shared somuch great stuff with us today
and it's time for our last call.
So, chris, what's your finalmessage for our listeners?
Advice, call to action, closingthought to leave them with.
Kris Walker (55:49):
Come out and see us at hoodieanalyticscom, if you
haven't already.
We'd love to talk to you.
We are in the business to helpbrands make better decisions and
operators make better decisionsusing data, because if you're
making better decisions, you'regoing to make more money, you're
going to be more profitable andeveryone wins, and we'd love to
(56:09):
talk to you about how we cansupport your business in doing
just that.
AnnaRae Grabstein (56:13):
Nice, I love it.
Well, thank you so much forjoining us today.
We really appreciated yourinsight and I think that there's
been some great takeaways forfolks, so have a great one,
chris.
Good luck with everything.
Be Connect yeah.
Kris Walker (56:26):
Thanks for having me.
AnnaRae Grabstein (56:27):
All right, folks.
Well, that's the episode.
How would I do without Ben?
Thank you for everyone thatengaged with us in the comments
on LinkedIn.
Please continue to engage withus.
If you liked this episode, dropus a review on Apple or Spotify
or wherever you listen topodcasts.
It really helps listeners findour content, and thank you to
(56:48):
our support from our teams atVertosa and Wolfmeyer and to our
producer, Eric Rossetti.
Subscribe, share high spiritswith your colleagues, friends
and family and, as always, folksstay curious, stay informed and
, most importantly, keep yourspirits high.
That's a wrap.
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