Convenience stores are positioned to introduce cannabis to a new wave of consumers with their unmatched retail footprint of 150,000 locations nationwide and accessibility to 90% of Americans within a 10-minute drive.
• Convenience stores have evolved from selling "gas, cokes, and smokes" to embracing new categories as tobacco sales decline
• Lower-dose (5mg) THC products outperform higher-dose options in convenience, indicating these stores attract cannabis newcomers
• The National Association of Convenience Stores now allows hemp-derived THC beverage companies to join as supplier partners
• Convenience retailers process more ID checks daily than the TSA, with strong age-verification technology to ensure compliance
• C-stores sell mostly single-serve beverages (over 60% of cold vault purchases), creating perfect entry points for cannabis trial
• Nielsen data tracking THC beverage sales in convenience shows 345% growth as the category establishes itself
• Brands succeeding in convenience demonstrate both brand leadership and category leadership with educational merchandising
• Legislative challenges remain with some states attempting to exclude convenience from hemp retail
• The convenience channel could become the largest retailer of hemp-derived cannabinoids with its established infrastructure
• Industry experts predict major convenience retailers will fully embrace THC products within the next six months
--
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Melissa VonderHaar (00:00):
We have never seen a category with the
potential like this before,because it's not just an alcohol
replacement or an intoxicating.
There are functional aspects ofthis and oh, by the way,
there's a million differentforms that you can use, whether
it's beverage, edibles, flour,vape, topicals.
I cannot wrap my head aroundhow big it could possibly be if
(00:20):
we do this right be if we dothis right.
Ben Larson (00:35):
Hey everybody, welcome to episode 88 of High
Spirits.
I'm Ben Larson and with me, asalways, is Anna Rae Grabstein.
We're recording Thursday, may15, 2025.
And we have an excitingconversation for you today.
We have Melissa Vonderhaar onthe show.
She's going to unpackeverything that the convenience
stores are doing and how they'relooking at the emerging THC
(00:56):
categories.
But before we get there, annaRae, hello from DC.
AnnaRae Grabstein (01:02):
Hello, thank you so much for being in DC and
standing up for the industrythis week.
Absolutely Homework andstarting a new workout routine.
I've got sore muscles.
I'm feeling strong.
Ben Larson (01:16):
Yes.
AnnaRae Grabstein (01:17):
I am not.
I'm not in DC pounding thepavement, so very grateful that
you are there pound in thepavement.
Ben Larson (01:24):
So very grateful that you are there.
How's it?
It's all right.
This is my favorite week of theyear.
I'm here with about 60 to 70 ofmy favorite people in the
cannabis industry and, yeah, weknow it's been a tough time in
the cannabis industry, sounderstandable that not everyone
can be here, but rest assuredthat we are here speaking on
behalf of the industry, and it'simportant.
(01:46):
I know a lot of people feel thatwe aren't seeing progress and
that the conversation is movingtoo.
The bipartisan nature of the ofthese different conversations
(02:06):
are shifting.
You know, we can have veryhealthy conversations with
republican committees and talkabout the need for safe banking
and all this kind of stuff, ofwhich I think we do have an
eighth iteration coming, comingdown the pike at some point this
year and, yeah, yeah, it's timeto charm um.
But even more important thanthat, there's there's just like
(02:29):
these persistent existentialthreats that we still face as an
industry, and whether you're onhemp or cannabis, I think it's
all signaling to to how a lot ofpoliticians and and communities
still view thc, and so the theno deductions for Cannabis
Businesses Act was introducedthis year, which would
essentially memorialize 280Epenalty, even with rescheduling
(02:53):
or the States Act or what haveyou.
And so you know, not only arewe fighting for progress, but
we're merely fighting to, to atleast maintain the status quo,
which is a little scary.
AnnaRae Grabstein (03:03):
This idea that maintaining the status quo
is a win is so unfortunate.
And I hear you and I appreciatethat folks like you and the
others that are showing up in DCto get our voices heard are
working to maintain the statusquo, but I just see this endless
disconnect between ourrepresentatives in Washington
(03:24):
and the realities of theAmerican constituency.
We know how the large majorityof Americans are in support of
legal cannabis access, and sowhy is it that these few small
voices seem to keep trying toset us back to reefer madness?
Ben Larson (03:48):
small voices seem to keep trying to set us back to
reefer madness yeah, these are.
These are the questions I can'tanswer, but I I guess I can
simply say that the the swamphas not been drained and there
there's plenty of swampinesschanging, but there's always
seems to be a new voice thatthat just wants to to shut it
all down and yeah, I did.
I mean.
Well, that's the other piece,right.
The persistent conversationsthat are necessary for just pure
(04:10):
educational purposes.
I think we had somewherebetween like 20 and 30% freshmen
Congress folk like in position,and so like these are new
conversations, not to mentionand I've said this on the show
before staffers.
They turn over every 18 months.
Those are the people that haveCongress's ear and are setting a
lot of the policy or drafting alot of the initial policy, and
(04:31):
so if they are not educated onthese things, many of them have
never even heard of 280E, and soit's just this persistent
conversation that has to be hadin order to see any progress to
be had in order to see anyprogress, and I'm not trying to
go back to the oldadministration, but one of the
things that I appreciated whenJavier Becerra was appointed as
(04:52):
the head of HHS under the Bidenadministration is that he's a
native Angeleno.
AnnaRae Grabstein (04:59):
He comes from Los Angeles and, as a result,
you don't come from Los Angelesand not understand cannabis to
some extent.
There's stores everywhere.
There has been medical cannabisdispensaries there since 1996,
when Prop 215 came on, and thenreally experienced like a lot of
complexity and progress and allkinds of different ways when
(05:21):
legalization hit.
And just knowing that there wassomeone in Washington that,
just by virtue of where theycame from, understood something
about the industry washeartening.
We know how many states nowhave legal programs with
regulated cannabis and nowthere's hemp in even more places
, and so I hear you that there'sthis massive turnover.
(05:44):
But more and more people havepersonal experiences just
because of where they live andthe things that they drive their
way to school or work or thegrocery store.
So, yeah, I think that theefforts to try to mainstay the
status quo are so critical, butlet's also see some progress.
I can't wait.
Ben Larson (06:06):
Yeah, well, to leave it on a high note, I will say
that you know?
A Sun Tzu quote, if I may, isthat in the midst of chaos
there's also opportunity, right,and we are in a fully read
administration which, ifanything, if we find the talking
point, we find the path forwardthat we might actually see
(06:30):
progress, and that might come inthe form of safe banking,
because generally people agreethat if we put people in banking
and provide access to the rails, that creates transparency and
a safer industry.
We also have the States Act,which preserves states' rights
(06:51):
and allows states to makedecisions for themselves and
prevents federal overreach.
These are talking points that Ithink both sides can get
aligned with and if they don'tget overcomplicated, maybe we'll
see progress.
AnnaRae Grabstein (07:03):
Nice, I like it.
Okay, leave us with some hope,and I am excited for this
conversation that we're going tohave today, because one thing
that Washington did provide in2018 with the Farm Bill was some
new channels for cannabinoidsto come to market, and, while
it's taken some time, we now seehemp-derived cannabinoids in
(07:25):
lots of traditional retailchannels, including convenience
stores, and we have somebodyhere today that's going to share
a lot more information with theaudience aboutar, who has spent
the past 15 years as ajournalist and a leading voice
(07:48):
in the emerging productcategories of mainstream retail,
including early in the vapingand tobacco spaces and now in
the cannabis space.
She began her journey as ajournalist on CSP's media
platform as the senior tobaccoeditor and now serves as the
director of marketing andindustry relations at IC
(08:09):
Innovations, where she createsmerchandising solutions and
services for emerging brands,especially those in THC.
Melissa is still a freelancejournalist, but now is also on
the board and the chair of theboard of CSP's newly formed
C-Store Cannabis Board, and isalso on the NACS Foundation
(08:33):
Advisory Committee, and that isthe National Association of
Convenience Stores, which is atrade association.
So lots of stuff to talk withMelissa about today.
Really excited to have you here, melissa.
Thanks for joining us.
Melissa VonderHaar (08:44):
It's wonderful to be here.
Thank you so much for having me.
Ben Larson (08:48):
And I'd like to point out that in talking with
Melissa, I have learned that notonly is she on the board of
this new committee because it'san opportunity, but she's
actually a big supporter ofcannabis and has long been a fan
.
Can we say that in public,Melissa?
Melissa VonderHaar (09:03):
Absolutely.
I am really trying to normalizeit.
We have this conversation withmy husband all the time about
should we let our kids we have aseven and a two and a half year
old should we be consumingcannabis in front of them?
And I live in New York.
It is a legal state and I wantto normalize it.
My parents would never hesitateto have an alcoholic beverage
(09:23):
in front of us growing up.
Now, granted, my dad worked forAnheuser-Busch, so you know I
learned how to pour a draft beerat five years old.
So that might not be the mostnormal, but we drink in front of
our children.
It is not a taboo thing to do.
So why would I hide cannabisuse?
I am a proud cannabis user.
Ben Larson (09:41):
Amen.
AnnaRae Grabstein (09:47):
Yeah Well, so let's just jump in.
You've been at the forefront ofthe convenience store space for
a long time and I'm curious ifyou could tell us how you've
seen perceptions shift aboutcannabinoids over time.
Melissa VonderHaar (09:55):
Yeah, it's really rewarding for me to watch
this happen.
I did my first cannabis storyfor convenience one year onto
the job at CSP.
That stands for C-StorePetroleum.
Nobody ever refers to it asthat, so if I get into acronyms,
I'm going to trust the two ofyou to ask me to clarify.
I started there coveringtobacco nicotine and that
(10:18):
started in 2011.
So when Colorado and Washingtonwent legal, colorado framed
their legalization efforts astreat marijuana like alcohol and
tobacco.
Now, growing up in theconvenience industry, as I said,
my dad worked forAnheuser-Busch.
He ran their small format sales.
So one of the first facts Iknew before I was 21 was that
(10:39):
7-Eleven sells more beer thanany retail or bar in the entire
world.
Convenience sells the most beerand by far the most tobacco.
So when I heard it framed thatway, I said we better be paying
attention to this, because ifit's going to be treated like
alcohol and tobacco, it's goingto end up in C-Store or it
should.
And I want to thank my boss atthe time, mitch Morrison, for
(11:02):
allowing this kind of naive29-year-old to write about weed
to a very, very, veryconservative industry.
And in fact, when I did thatstory, I could not get a single
retailer to go on the record.
So the story is all off therecord, quotes of retailers
saying, yeah, we think thiscould be a really good fit, but
I don't want to be the guy thatgoes to my CEO and suggest that
(11:26):
we sell dope like bunch ofboomers.
So that's the language that wasactually used.
And to watch the evolution ofthat happen to now.
You know, fast forward to lastweek at the CSP Cold Vault Forum
, which was filled with categorymanagers from all over the
country and the biggest takeawayall of them had was THC
(11:46):
beverages here.
And we are so excited and we'resampling it.
One retailer had a can of 10milligram soda at nine in the
morning.
So bravo to him for normalizingit even further.
To see the excitement and thewillingness to talk about it.
And you know, yes, that hastaken almost 15 years, but it's
(12:08):
really exciting.
So that's the evolution of thatjourney.
It's really rewarding to seejust how much both the
convenience industry wants toengage in this space and, on the
flip side, seeing that thecannabis industry wants to
engage in convenience.
I've been used to ringing thisbell of convenience.
(12:28):
Pay attention to cannabis.
Let me tell you all about it.
This year marks the first timethat I've really gotten to talk
to cannabis brands aboutconvenience.
Ben Larson (12:36):
What's really interesting is like the scale
that convenience has.
Right, because a lot of us inthe industry have talked about
liquor stores.
Where I think there's about 40to 50,000 liquor stores across
the nation, convenience is inexcess of 150,000, right?
So like what's that?
Three or four times as large?
(12:57):
What's also interesting, though, is, with C-Stores, that you
have a lot of independentoperators, and so what I think
would be helpful is to justunderstand how they function a
little bit differently than say,the liquor store channel, just
so we can understand that alittle bit better.
Melissa VonderHaar (13:12):
Sure, sure.
So you hit the nail on the headthere, ben.
It is over 150,000 C-stores.
That is three times.
Liquor.
Grocery is also about 45,000.
So it's you know, if you lookat the full retail landscape of
where this is being sold,c-store feasibly could represent
more than half.
That is just a huge, hugechannel.
(13:34):
You are correct, it is.
Of those 150,000 stores, 90,000plus are single store owners.
So you know, you hear aboutCircle K, 7-eleven, casey's and
yes, they have massivefootprints, but they actually
don't represent the majority ofthe industry.
And what's so interesting to meI was thinking about it the
(13:56):
other day the entrepreneurialspirit of those single store
owners is so aligned with whatI've seen with these THC
beverage brands, thc startups ingeneral.
They want to try new stuff.
They are the ones that are atthe forefront of these emerging
categories.
It's something that I havewatched happen.
I watched it happen with Vapor.
(14:17):
The independents were the firstones to bring that in and then
it rolls out to the big chains.
The other really interestingfact that I think people should
understand about convenience isthat even though they're
competitors, they really worktogether.
They go to an event like ColdVault last week.
They go to the NAX show.
(14:39):
That's the National Associationof Convenience Stores.
They throw a giant trade showin October.
Association of ConvenienceStores.
They throw a giant trade showin October.
They go to these events andthey work together.
Wawa and Sheets are two of thebiggest retailers in the
Northeast and they're both outof Pennsylvania.
They advise each other.
It's not the kind of oh, don'ttalk to me, you're a competitor.
(15:01):
They work together.
And that goes for the singlestore owners too.
There are many, many singlestore or independent owners that
are on the NACS board becausethey do these new categories,
but then they're talking to theCircle Ks, the 7-Elevens, the
KCs, the Wawas, the Sheets andreally advising them.
They are the ones that aregetting stuff moving.
(15:23):
So I know when I talk to a lotof brands, they want to get in
with the big guys, right?
That's the easiest way to fillthe doors and activate.
However, don't sleep on theindependents.
Getting in with the rightindependent who is going to
champion this category can makeall the difference in the world.
AnnaRae Grabstein (15:43):
Let's talk about that a little more, this
concept of championing newcategories.
You said that independentC-stores and C-stores in general
are often early adopters of newproducts and certainly we're
starting to see traction of THCbeverage.
I'm curious if you could talkabout what makes the convenience
(16:04):
model compatible withinnovation and trying new things
.
Is it that people arepurchasing individual units or
what is it?
Melissa VonderHaar (16:15):
Yeah.
So let me make the case why, ifyou are launching a new product
category, convenience is whatwill make the difference.
It is the activator.
They might not always be thefirst one to the table right.
Vape was first sold at mallkiosks.
That was the thing.
Smoke shops picked it up.
Sooner there were vape shops.
However, convenience is whattook it mainstream and I really
(16:38):
so firmly believe, and havebelieved for 15 years, that
convenience can unlock not justTHC beverage, not just hemp
products, but really introduce awhole new wave of people to
cannabis.
So it can really benefit notjust those of you in hemp but
those on the adult use model,because there are people that
(16:59):
have never, never, ever wantedto go into a dispensary for
whatever reason, but they gointo a convenience store all the
time.
So let me, let me drop somedata for everybody.
I shared the number 150,000.
That's a lot, but let me putthat in context.
Nearly 90% of Americans livewithin 10 minutes of a
convenience store.
(17:20):
Now I'm in New York.
That's not terribly impressive.
I expect to be in 10 minutes ofanything, but that includes
rural Utah, where you might be30 to 40 minutes from a hospital
.
The convenience store is inthose communities.
It's not just where you go toget fuel, it is your grocery
store, it is your liquor storeand it is your quick service
(17:41):
restaurant.
Casey's again, they are thethird largest retailer in the
country.
However, they are the fifthlargest pizza company.
They are up there with PizzaHut, domino's, and that's with
limited footprints.
With that in mind, aconvenience store that sells
fuel has 1,100 people goingthrough their store every day
(18:02):
and that's 80% of the channelsells fuel.
So just in terms of the amountof people going through there,
it is huge.
Not everybody goes to a grocerystore.
I do DoorDash or Fresh Directfor my groceries.
I rarely go into a grocerystore.
Not everybody goes into aliquor store, especially people
that are in recovery, especiallypeople that are not drinking.
(18:24):
Almost everybody drives, whichmeans almost everybody has to go
to a convenience store to getgas.
We sell 80% of the gas in theUnited States.
They also now have fuelchargers too, so they are
investing in EV.
So A you're getting theaudience, and it's a broad
audience, it's not just oneperson, it is, again, anybody
(18:45):
that drives is probably goinginto a convenience store and
they're Of that.
The singles are what is sold interms of beverage.
It is 60, it's over 60% of thecategory are singles.
It's twice as much as six packs.
And why that's so important foran emerging category it's not
(19:08):
just the visibility, it is.
You might not want to spend $15,$20 on a multi-pack of a THC
beverage when you've never hadTHC.
That is a big commitment.
You don't know if you're goingto like it.
However, a single, even amarked up single, you could sell
that for $6 or $7.
That happens with beer.
That is a great impulse andthey're already shopping and 60
(19:32):
plus percent of cold vaultshoppers purchase, make an
impulse purchase.
So, in terms of exposure to afull breadth of America
consumers and in terms of peoplethat are willing to purchase,
another interesting fact andthis is why cold is so important
in convenience, which isdefinitively different than
liquor, is that I just pulledthis data of beer 50% of beer
(19:58):
that is sold at convenience isconsumed within the hour.
It is a for me for now channel.
So cold is super, superimportant.
You know, realistically, yeah,somebody might grab that
beverage single, take it homeand drink it immediately.
Just in terms of activating,this is where you can do it.
Ben Larson (20:17):
So I'm going to quote one of my favorite
philosophers right With greatpower which this sounds like a
lot of power comes greatresponsibility.
I think one of the challenges,especially from the lens of the
cannabis industry, that we havebeen seeing with C-Stores is is
this willingness to innovateahead of be it regulations or
(20:37):
guidelines?
Now that CSP and others NACsare acknowledging the category
and stating it, does that givean opportunity to provide
guidelines as to what should besold in C-Stores and what
shouldn't be sold?
Because I think that's thebiggest criticism of the
emerging space.
Melissa VonderHaar (20:57):
Yeah, and that's you know.
I'm not going to look you inthe eye and say that every
single C-store owner is aresponsible actor.
You have 150,000, there aregoing to be some bad actors in
there.
That said, the people that aregoing to a NAX event, the people
that are going to a CSP eventor reading the magazine or
participating in the board, theyare absolutely going to look at
(21:21):
this, they will listen andrespect.
They want to be responsibleplayers because we as an
industry know if regulators wantto make an example, the easiest
way to do so is the conveniencechannel.
We have three times as manylocations.
So you know, we saw this happenin Alabama, where C-Store,
seemingly, is the only channelthat was locked out, and you
(21:43):
know, yes, part of that is thatthe channel needs to advocate
for itself, and we are.
I think there is an awarenessand a desire.
I think Alabama is going to bethe rallying cry of this
industry.
However, even you know, I wasspeaking to a retailer in
Louisiana.
In Louisiana, everywhere cansell liquor.
They have drive-throughdaiquiri.
So it was not the liquorchannel advocating and saying,
(22:05):
hey, this should be 21 and up,because convenience stores can
sell liquor in Louisiana.
It was that the regulators weregetting pressure to do
something, and by locking outconvenience, which is what they
did they said you need a hemplicense in order to sell hemp
and oh, by the way, if you sellfuel, you cannot have a hemp
license.
It was a very clear lockout ofconvenience.
Ben Larson (22:30):
It was tied to fuel, so interesting.
Melissa VonderHaar (22:33):
Yeah, it was what I was told and the reason
that I can see is politically itmakes a great headline to say,
hey, we locked out three fifthsof the market.
Over half of the market nowcannot sell hemp, and that's a
very simple, easy way to do it.
And because of the size andbecause, yes, there are some bad
(22:53):
actors, but I would argue thereare plenty of bad actors in
liquor.
There are plenty of bad actorsin liquor.
There are plenty of bad actorsin grocery.
I have seen them very firsthandin Brooklyn, new York.
Because there are bad actorsand because of the size, it is
the easiest channel to kind ofpick on and I've seen this
happen with tobacco and nicotineespecially.
With tobacco and nicotineespecially, there was a movement
(23:15):
in 2019 with the height of kindof the youth vaping usage where
the FDA was talkingspecifically about locking
convenience out of vapefederally.
No evidence Based on that.
There is absolutely no evidencethat convenience cannot
age-gate.
I will note that conveniencechecks more IDs on a daily basis
than TSA does, and I'll alsocall out NACS.
(23:36):
The National Associationcreated its own age-gating
software, trueage, and retailersthat are using this can
demonstrate that they have 100%compliance on carding.
It is a very simple, seamlesstechnology, and I would beg you
to show me an example of anotherindustry that created their own
(23:57):
age restriction software Forconvenience.
When you talk about responsiblepractices, it's so important to
this channel.
Why?
Because over 50% of theirin-store sales come from
age-gated categories.
Tobacco is the number onedriver of in-store sales.
Beer is up there, I think it'snumber three.
(24:19):
They're so important.
And so if they screw up onage-gating, if they get a
violation, if they lose theirright to sell, they have lost
their business.
They cannot afford to be laxabout this.
So, yes, there are bad actors.
Yes, I think a conversationneeds to be had about dosing and
(24:39):
about merchandising, and aboutmaking sure that you protect and
make sure that kids don't getaccess and make sure that, by
the way, a grown up knows thatthey're buying an intoxicating
product, because that's notalways clear.
AnnaRae Grabstein (24:53):
I think yeah, I want to jump in.
I think that what you'rebringing up with, this idea of
bad actors is something thatcomes up in all areas of the
cannabis industry and, just ingeneral, that bad actors
overshadow the large majority ofeveryone else in almost all
(25:13):
situations.
I don't think we need to spendtoo much time on it.
I think that you've reallydemonstrated that there is
largely age gating going onproperly, but you did bring up
that one of those age gatedproducts tobacco has been
driving most of the revenue atC-stores for a long time and we
know that there's decliningtobacco revenue across the globe
(25:35):
.
Ben Larson (25:37):
And unless it's in.
AnnaRae Grabstein (25:39):
Yeah, unless we're talking about the pouches.
But let's just be real here.
I think that C-stores also arelooking at how can they
diversify as they're havingdeclines in this historically
large category of tobacco, andhemp-derived cannabinoids are an
(26:01):
option that seems like it makesa lot of sense and at the same
time you also talked about that80% of C-stores sell fuel.
Hence, I think, the term gasstation weed that people are
throwing around and I'mwondering if you would respond
to that.
Gas station weed does not havea positive connotations in the
(26:23):
marketplace.
Melissa VonderHaar (26:25):
No, and this is not the first time we've
experienced this Gas station.
Sushi was another rallying cryfor a while.
Convenience historically, youare absolutely correct.
We talk about the holy trinityof convenience.
It's gas, cokes and smokes.
And smokes are absolutelydeclining.
Nobody is considering otherwise.
(26:47):
And yes, ben, you're right, zinand Modern, oral and, to an
extent, vapor, are helpingoffset that some, but it's still
.
It is a category that is indecline and regulations are
likely going to continue todrive that, as well as changing
attitudes and looking atwellness.
So convenience for the entiretyof when I've been there, and in
fact probably going back to whenmy father started in the 1980s,
(27:10):
they have recognized that theyneed to be less reliant on
cigarettes.
And in fact, the next state ofthe industry data, their big
data source, shows thatcigarettes used to be the top
driver of in-store sales andin-store profits.
Several years ago, pacbev tookover in-store profits and it is
within striking range ofin-store sales Every year.
(27:33):
I kind of do a mental bet withmyself of is this the year that
PacBev overtakes cigarettes?
So those categories are indecline.
We also know that beer is notdoing so great.
That's another core category.
And fuel we have more fuelefficient vehicles.
So trips as a whole are downfor convenience.
So, yeah, they need to moveaway from it.
(27:55):
And so that I'm going to bringthat back to the gas station
weed, I promise, because that isa trigger word for me and I
really never want to hear itagain.
Ben Larson (28:03):
This will be the last time I swear.
AnnaRae Grabstein (28:05):
Gas station weed.
Melissa VonderHaar (28:07):
If there is a takeaway I would like every
person interested in working inconvenience to know, is that get
gas station weed out of yourmouth, out of your vocabulary.
You say that in front of aretailer and it's going to be an
automatic.
I don't want to work with thatperson.
Gas station sushi big thing.
The industry has really pivotedto be food service forward.
(28:28):
It is now one of the top profitdrivers of stores, given that
not every store does foodservice.
But you look at Wawa.
They are known for hoagies.
That food is good.
I would rather stop there anyday than a McDonald's or a Taco
Bell.
When I'm on the road, Casey'sis doing pizza.
But it's also the independents.
You can go on YouTube and thereare YouTube channels dedicated
(28:49):
to independent retailers thatbring in a grandma to do her
fried chicken on a Sunday.
So we have been workingactively to get away from gas
station sushi and really beproud of the food service we're
doing.
And I know we can do it withcannabis as well.
And when you say gas stationweed, that's not just an insult
to convenience retailers, it'san insult to every brand that
(29:11):
sells inconvenience.
Would you say gas station Pepsi?
Would you say gas stationDoritos?
No, of course you wouldn't,because Doritos are Doritos,
Pepsi is Pepsi and a hempbeverage is a hemp beverage,
whether it's sold in convenienceor in a liquor store or in a
grocery store or DTC.
We don't single out other.
(29:32):
I don't say bullet riddenliquor store weed, Like I
wouldn't say that.
And I wouldn't say grocery weedor hemp shop weed, it's just
cannabis.
AnnaRae Grabstein (29:43):
Like it's just the flip side is that what
you're talking about isacceptance, and something that
proves acceptance more than theterm that you're talking about
is that Nielsen, the largestbrand data aggregator in the
world, is now covering thecategory, and I'd love it for
(30:03):
you to tell the audience moreabout what Nielsen is doing and
the data that they are sharing.
So far, yeah.
Melissa VonderHaar (30:10):
So I am going to shout out Jason
Zielinski with Nielsen, who lastweek gave a preview at CSP Cold
Vault to kind of the data thatthey are tracking specific to
hemp beverage at convenience,and he was the first to
acknowledge this is the veryearliest data set.
They are actively looking formore brands to get into their
(30:31):
database.
So I will share contactinformation on how to get in
touch with Jason on my LinkedIn.
But if you're not in theirdatabase, you should get in it
because that will help get realconcrete data.
So this is early on.
They should have full datalater this summer is what I'm
being told, but he gave us apreview and it was really
(30:51):
promising To me.
No, it's not hugely surprisingthat we're seeing 345% growth at
convenience.
This is the first time they'retracking it and I've again
watched this happen with vape.
You have these triple digityears because the category is
going from nothing.
To an extent you're stillseeing that within in modern
oral.
When you're going from nothing,the growth isn't so much
(31:13):
necessarily.
What I'm looking at what didstand out to me is their data on
dosages and what is selling atconvenience.
I think you're both well awareanybody that's looked at
LinkedIn recently.
There is this internal debate inthe hemp industry of what is
low dose and is this too low?
We should be doing more, andthat it seems to be that what
(31:37):
we're seeing at liquor, or atleast anecdotally, is that the
higher doses are all that isselling In convenience.
By far and away the largestdose category that was selling
was five milligrams.
Nielsen showed that at 35% ofconvenience sales are in that
five milligram range and thatwas, as opposed to 9% in the six
(32:00):
to nine range, 9% in the 10milligram range.
So it is outselling.
Now I'll put the caveat of thisis early data, so it could be
that 80% of what they'retracking is in Minnesota where
there's the five milligram cap.
We will wait and see.
And the other thing that gaveme pause is that tied with five
milligrams was 35% of whatNielsen was seeing was all other
(32:23):
aka THC beverage that didn'tlabel the dosage.
Ben Larson (32:28):
So we'll see where and this was specifically
beverage that they were callingout- this was specifically
beverage.
Melissa VonderHaar (32:34):
It was calling out.
This was specifically beverage,it was a beverage event.
So I'll be curious to see ifthey are tracking other formats.
I know a few places are.
I'll call out ManagementScience Associates, msa.
They track distributor shipmentdata, so it's a little bit
different.
They actually haven't beentracking form factor I believe
they have switched but they weretracking by cannabinoid and
(32:58):
they have also seen great growthin Delta 9 of late.
Ben Larson (33:03):
What do you think is driving this difference?
Because, as you mentioned, likeon LinkedIn, we do hear from
the liquor store owners.
John Halper from Top 10 Liquorshas been really vocal.
I've talked to leadership atTotal Wine and Specs and yeahx
and yeah, far and away 10milligram products are flying
off the shelves and I'madvocating to make sure we
(33:23):
maintain the on-ramp.
But it's great to hear thatthis on-ramp is actually really
viable in the convenience stores.
And was there a hypothesis thatyou had that this would
actually be true?
Or you know what's yourperspective on the difference of
the consumer?
Melissa VonderHaar (33:34):
Yeah, you know, I've had a lot of
conversations with DianaEberlein about you know, as
we're lobbying at the statelevel and liquor is saying this
should only be sold at 21 and uplocations, is there a
compromise to be had where maybethere is a higher cap for
liquor and a lower cap forconvenience?
And while on principle I don'tthink there's evidence that
(33:57):
suggests that convenience isill-equipped to sell higher
dosage and also, by the way, Ithink it misrepresents what THC
is, to suggest that it's thesame as tequila or vodka or
bourbon it's not so on principle.
I'm not thrilled about that.
Bourbon it's not so onprinciple.
(34:17):
I'm not thrilled about that.
But to me, a convenience storeis going to be a lot of new
consumers, so I would rather seethose lower doses there,
specifically because somebodythat's new to the category.
They shouldn't be having a 10milligram beverage as their
first entrance and a lot ofpeople aren't aware, and so I
have long held a personal theorythat if it is 10 milligrams and
(34:37):
up that are selling, then thoseare experienced cannabis users.
It's either experiencedcannabis users or it's somebody
that is about to perhaps nothave the best introduction into
the category, and that's okay Ifliquor wants to have the
experienced cannabis users.
I'm fine with that.
If dispensaries want to havethe experienced cannabis users,
(34:59):
that's great, that's where theybelong.
But convenience you are goingto get the new consumers.
And so by seeing fivemilligrams do well and in fact
they were doing okay with thetwo to threes as well I don't
remember the exact figure, butit was higher than the tens
that's great To me.
That says we are getting newconsumers, which is my whole
argument for convenience.
This is what can unlock andnormalize a new category.
(35:23):
We saw it happen with energydrinks, we saw it happen with
vapor, we saw it happen withmodern oral and, if we are given
the opportunity, we are goingto see it happen with cannabis.
And again, as I said at thebeginning, that is good news for
the liquor stores that arecarrying it, because the
convenience store shoppers willgo to a liquor store to get a
six pack or a 12 pack or aspirit bottle, especially if
(35:45):
they can't get it at theirconvenience store.
They may decide hey, I reallylike cannabis, I'd like to see
what more is out there.
Let me go to my dispensary.
That, by the way, I never wouldhave done before, but now that
I know that this is not this bigscary reefer madness thing.
This is actually quite wonderfuland, by the way, a great
alcohol alternative.
(36:05):
Let's go explore what I can doat a dispensary.
It makes me optimistic and I'llsay yes.
The other explanation could bethat convenience operators in
that database may only beoffering fives or they may only
be able to offer fives.
There are a lot of reasons forthe data.
I am not saying that what'shappening in liquor is
(36:26):
necessarily not accurate or, youknow, definitively only
experienced cannabis users.
But this gives makes me reallyoptimistic of the theory that
convenience is where newconsumers can get into this.
AnnaRae Grabstein (36:41):
So, as you're talking about these legislative
debates in terms of differentregulations for different
channels, I would like for youto paint the picture of the
landscape for the tradeassociations and the policy
groups both that you're involvedin that are working in
convenience and help theaudience to understand what the
(37:01):
policy agenda is that theseorganizations specifically are
advocating for, as it relates toconvenience's participation in
the channel.
Melissa VonderHaar (37:11):
Yeah.
So I will start with theNational Association of
Convenience Stores, NACS.
And let me be clear I do notwork for NACS and I don't work
for CSP.
I do a lot of work with themand I have't work for CSP.
I do a lot of work with themand I have talked with them both
about what I'm going to sayhere.
So these statements are blessed.
National Association ofConvenience Stores has long
taken a position on virtuallyevery category that if it is
(37:35):
legal convenience should beallowed to sell it, and they
even have a statement on thisabout marijuana.
That if it is legal convenienceshould be allowed to sell it,
and they even have a statementon this about marijuana.
That if it is legal, regulatorsshould not be picking winners
and losers in the retailchannels, especially when there
is zero evidence that aconvenience store is less
equipped to sell an age-gatedproduct than any other channel.
(37:57):
Now, what has updated with NACS?
And I will note they are afederal organization so they do
not lobby at the state level.
They do work with state levelgroups, but they will not take a
position on most stateregulations.
However, they have recently,very, very recently, changed
(38:17):
their stance in terms of who canjoin as a NACS supplier partner
and who can do booths at theirtrade show in October, and I am
very happy to announce that they, as of March, THC beverage,
specifically, specifically, hempderived THC beverage.
Those companies are allowed tojoin NACS as supplier partners
(38:40):
and they are allowed to havebooths at the show.
They are not allowed to sample.
That said, for 2025, NACS istotally sold out on booth space
and they also have some policiesthat they have to consider.
You know, as they are going toembark on this THC journey, they
are an organization again,federal organization industry
(39:02):
advocacy organization, sothey're very sensitive to having
products that are not legal atthe show and I can tell you it's
been a big problem.
It is a huge trade show andthere are people that say I'm
going to do cigars and then theyhave illegal flavored vapes.
Or there are people that aresaying, oh, I'm doing beverages
and oh, hey, look, they havesome THC beverages that really
(39:22):
aren't supposed to be there.
So they are in the process ofkind of determining what the
policies are going to be, but,that said, a THC beverage
company, as of today, can joinas a supplier member, which gets
them engaged with the industryand also puts them first on the
list to learn about those newbooth policies.
So that is super exciting.
(39:43):
And I can say that there arepeople within the NACS
organization that are doing somegreat, great advocacy at the
state and local level.
So that is wonderful.
It's just not officially partof NACS CSP.
They are a media company.
They do media and events.
There is a little bit of adifference, However.
They came up with the idea ofdoing this C-Store Cannabis
(40:06):
Board.
They already do one fortechnology.
They do one for advancingwomen's causes, so they really
do get involved in importantindustry areas in creating these
boards that are really abouttaking things to the next level.
And when they approached meabout chairing the board, I said
I love this, I'm super excitedto do it, but regulatory
(40:27):
advocacy has to be at theforefront because we are not
organized yet and I think thereare still retailers that are a
little nervous about coming outfull force for cannabis because
we are the channel thathistorically gets our wrists
slapped.
So there's been some nerves.
That said, I can tell you beingwith retailers last week after
(40:48):
Alabama passed their bill,there's a rallying cry.
People seem to understand thatwe cannot rely on brands and
distributors to protect ourright to be in this channel, on
brands and distributors, toprotect our right to be in this
channel.
And even if you are not in ityet, you need to protect your
rights.
I said I grew up a brewery brat, so Pennsylvania beer is
something I'm very familiar with.
(41:09):
Mainstream retail was lockedout of Pennsylvania beer sales
for a hundred years afterprohibition and they're still
untangling it and I do not wantTHC beverage or THC as a whole
to become Pennsylvania beer.
We have to work to keep thoselaws from getting passed and
carving out winners and loserson the retail space.
So, while CSP will not besending lobbyists to the state
(41:32):
and local level, we are going torely on our board members on
the retailer and the brand sideto alert us to when something is
going on so that we can get thelocal groups up there and
explaining why we are veryqualified to sell age-gated
products.
Ben Larson (41:49):
Melissa, you're highlighting a lot of the
complexities of constantlyshifting stands of legislation
as these categories emerge.
I really appreciate yourperspectives on this.
One of the conversations thatkeeps popping up is the
influence of alcohol and thethree-tier system.
I'd love to hear yourperspective on the three-tier
system and how that perspectivemight differ from that of the
(42:12):
liquor store channels.
It's been a very sensitiveconversation on LinkedIn, as
you've probably seen.
Melissa VonderHaar (42:18):
Yes, yes, I have observed, and I'm sure I'll
get some flack because, yeah,the three-tier system is a way
to protect people and one of mybiggest concerns with this
category.
I was 29 when I startedcovering Vapor and it was very
similar in so much as, hey, thisis this whole new thing that
(42:39):
has not existed before, that hasthe opportunity to be a harm
reduction tool for smokers andit has this opportunity to
totally change our whole tobacconicotine landscape and it's
super, super exciting.
And it was very similar to whatI'm seeing with THC beverage,
just in so much as hundreds andhundreds of brands out there,
(43:01):
you have no idea who's going tobe the winners and losers of it.
It's all moving at this veryfast pace and then, oh hey, at a
certain point it gets popularenough that kids are using it.
And what happened with vape?
It's an example of whatshouldn't happen in a CPG
category.
The growth here versus othercountries is different and it's
(43:23):
in part because it got out ofcontrol.
There wasn't responsibleplayers happening right away and
that really stymied thecategory.
We are still kind of clawingour way out of it.
There's still a lot of illegalproduct on the market.
There are still a lot of brandsthat are waiting for approval
from the FDA, and it was becauseof this product on the market.
There are still a lot of brandsthat are waiting for approval
from the FDA, and it was becauseof this course correction that
(43:43):
happened.
And whether it's through thethree-tier system or something
else, I don't want to see thathappen to THC.
The stakes are too high because, as awesome as the potential of
vape was, we have never seen acategory with the potential like
this before, because it's notjust an alcohol replacement or
an intoxicating.
There are functional aspects ofthis and oh, by the way,
(44:05):
there's a million differentforms that you can use, whether
it's beverage, edibles, flour,vape, topicals.
I cannot wrap my head aroundhow big it could possibly be if
we do this right.
And so for me, yes, I amsupportive of three-tier as a
way to do this responsibly andshow that we're doing it.
That doesn't mean I outrightoppose D2C.
(44:27):
It doesn't mean that I outrightoppose doing something more
similar to tobacco, which is notrequired to go through the
three-tier system.
But the reality is, if you'regoing to be in convenience with
90,000 single-store operators,you're not going to sell direct
to all of them, the easiest wayfor you to service those 90,000
(44:47):
independents is to go through atrusted distributor, whether
it's an alcohol distributor orother CPG distributor.
When I look at that fightthat's going on, it seems to be
a very right now thinking fight.
It's not looking at whatnormalization of this category
looks like.
AnnaRae Grabstein (45:05):
Bringing up distribution is a great segue
into how brands are settingthemselves up to win in C-stores
and I know, as part of your dayjob outside of the thought
leadership and the industryadvocacy that you're doing and
that we're talking about you dowork on merchandising and
displays and things in storesfor brands and I'd love it if
(45:29):
you could help us talk throughand understand what are some of
the wins that you've seen inC-Stores with brands and how you
think brands can be settingthemselves up to succeed in the
C-Store space.
Melissa VonderHaar (45:43):
Yeah.
So I am super, super excited.
For the first time in my careerI can say that THC is part of
my day job.
Usually it's been this extralittle passion project of mine
doing the freelance journalismand the education work.
That said, after CanadaCon,after kind of the progress going
on with CSP and NACS andmeeting with Cannabis, brand
(46:08):
after brand after brand, we kindof looked at our core business
model and said you know what?
Yes, we have these greatmerchandising displays, my IC
Store Innovations.
We specialize in small formatmerchandising displays
specifically for a conveniencestore channel that, by the way,
can size up for liquor andgrocery.
(46:29):
But kind of working on thepremise of it's easy to take
something small and make itbigger, it's much, much more
difficult to take those giantbeautiful floor displays that
I've seen at Top 10 Liquor, thatI've seen at Total Wine, and
try to cram that into not just aCircle K but like a Murphy's.
Those are kiosks.
They really don't have spacefor that.
Yes, our core business isalways going to be those
(46:51):
displays.
However, we realized withemerging brands, with emerging
categories, there's points thatyou are scaling up at a rate
that your team can't handle.
So, say you go from doing apilot at a major C store and
then they expand it and suddenlyyou're going from 500 locations
to 6,000.
(47:11):
You might not have the time tovet and hire a trade marketing
team to vet and hire aprocurement person to vet and
hire a new warehouse to handleall of this.
Our team has all of thosecapabilities and so my new role
on the day-to-day is for abusiness unit that we are
calling TradeWorks.
That is really complete trademarketing solutions and it is
(47:35):
looking at how does a brandapproach convenience.
And one of the big things thatwe really feel strongly about is
because this is a new categorythe brands that come in not just
showing brand leadership butcategory leadership and saying,
yes, we want to bring a displaythat doesn't just call out our
brand but does some education ondosing, on the minors, on how
(47:59):
beverage is different thansmoking or vaping or what five
milligrams is equivalent, to thebrands that are really taking a
category leadership.
In addition to brand leadershipand understanding the small
format space which, by the way,space is at a premium in a
convenience store.
It's thousands and thousands ofSKUs, so just getting on the
(48:21):
shelf in a cold vault it's onlya part of the battle, because if
you are in the bottom shelfcorner in a category that they
don't expect to see, they're notgoing to see you.
The average convenience storeshopper at the cold vault spends
15 seconds.
So, yes, we have merchandisingdisplays that can help you get
more prominent placement, butalso we are encouraging brands
(48:42):
to think about how do you builda category home and showing the
retailer that you are investedin these different categories?
Ben Larson (48:47):
boom and sometimes bust and you have the data, you
(49:08):
have the consumer insights.
If we're having the sameconversation a year from now,
what's your prediction over thenext 12 months as far as how
this category continues to growand expand?
Melissa VonderHaar (49:17):
Yeah, I think we're at the point of
precipice here where you'reabout to go from hearing
mumblings of independents and afew smaller brands or brands
that are doing it but aren'tallowed to talk about it or
don't want to talk about it.
I think, not even the next 12, Ithink in the next six months,
we're about to see thefloodgates open up and where you
(49:40):
will see major retailersinvesting in this space.
And I think, so long as we canget our act together and
advocate and make sure that weare not getting locked out of
states, but that we areadvocating, saying we want the
regulations, give us theguardrails so that we can do
this responsibly and let us bean ally in it, so that we can do
(50:03):
this responsibly and let us bean ally in it, I think it's
going to blow the doors offthings and it is going to get
new consumers into this categoryand you are going to see this
have a home in convenience and Ipredict that, if allowed, it's
not just going to be in the coldvault.
I think edibles, even vape, hasa home on the back bar, as
convenience retailers arelooking to drive more people
into their stores and build thebaskets.
(50:24):
This is a huge opportunity foreveryone.
AnnaRae Grabstein (50:28):
Wow.
What shift in terms of theworld that we lived in five
years ago compared to where yousee this all going.
I'm excited to see what happensnext.
Melissa, what is the best wayfor our listeners to stay in
touch and keep up with you ifthey're interested in anything
they heard today or want to juststay up to date on your latest?
Melissa VonderHaar (50:51):
Yeah, so I am super active on LinkedIn.
You are absolutely welcome toengage with me there, but also
email me.
My email is melissa atictradeworkscom.
AnnaRae Grabstein (51:03):
Awesome, and it is time for our last call.
So, melissa, what is your finalmessage for our listeners?
Advice, call to action.
Closing thought.
Melissa VonderHaar (51:12):
I gave this a little thought and I think
I've referenced a few times.
I'm second generationconvenience supplier.
I grew up with a dad in thebeer industry and, as we have
talked to new brands or evenbrands that are just new to
convenience full disclosure Iwas an arts major, so I know
zero about economics, but I doknow something about the four Ps
(51:33):
of profit, pricing, whatever,and I kind of tuned out the rest
.
However, in a recentconversation my dad cited that
with convenience there's a fifthP and it's the people.
The people are so important tothis industry and you really do
build relationships.
So for brands that are lookingto get involved in convenience,
I urge you to invest in people,whether it's getting people on
(51:56):
your team that have experiencewith convenience and can
therefore open some doors foryou, whether it's attending
events like Cold Vault, like theNACS show.
There are ways for you to getinvolved.
There's a million ways and theCSP board.
We are taking brand seats.
They are paid and we areprobably going to have more
(52:16):
applicants than we can deal with, but they will be doing a
cannabis specific event.
I can tell you that theretailers that were at Cold
Vault last week there were threebrands, thc brands that were
there.
Those retailers are going toremember that those brands
showed up, so I so encouragepeople to invest in people for
the convenience space.
Ben Larson (52:37):
Love it.
Invest in the people.
Melissa Vonderhaar, thank youso much.
This was an incrediblyinsightful conversation.
Thank you, thank you, thank you.
Melissa VonderHaar (52:46):
Thank you.
Ben Larson (52:47):
All right, anna Rae, what do you think?
My spirits are higher.
AnnaRae Grabstein (52:52):
It's wild just to think about all of the
places that cannabis could besold in the future, and to hear
that there are 150,000convenience stores that would
love to participate in thischannel is a little bit
mind-blowing.
It's a lot to think about.
Ben Larson (53:09):
Yeah, absolutely.
What do you guys think?
Thank you for engaging duringour live recording.
Thank you for liking,subscribing, sharing, doing all
the things with the podcast onApple, itunes or Spotify or
wherever you like to listen toyour podcasts.
Thank you to our teams atVirtosa and Wolfmeyer.
Thank you to our producer, ericRossetti.
(53:31):
Couldn't do this without youguys.
Thank you for allowing me to beout here in DC this week doing
the important work with NCIA.
If you're not a part of NCIA,really consider joining and
joining me next time in DC.
Thank you to everyone that issupporting and doing the work at
home and continuing to pushthis industry forward.
If you've enjoyed this episode,please share it, tell your
(53:53):
friends and follow us anywhereyou'd like to listen.
Until next time, folks staycurious, stay informed and keep
your spirits high.
That's the show.
We have never seen a category with the
potential like this before,because it's not just an alcohol
replacement or an intoxicating.
There are functional aspects ofthis and oh, by the way,
there's a million differentforms that you can use, whether
it's beverage, edibles, flour,vape, topicals.
I cannot wrap my head aroundhow big it could possibly be if
(00:20):
we do this right be if we dothis right.
Ben Larson (00:35):
Hey everybody, welcome to episode 88 of High
Spirits.
I'm Ben Larson and with me, asalways, is Anna Rae Grabstein.
We're recording Thursday, may15, 2025.
And we have an excitingconversation for you today.
We have Melissa Vonderhaar onthe show.
She's going to unpackeverything that the convenience
stores are doing and how they'relooking at the emerging THC
(00:56):
categories.
But before we get there, annaRae, hello from DC.
AnnaRae Grabstein (01:02):
Hello, thank you so much for being in DC and
standing up for the industrythis week.
Absolutely Homework andstarting a new workout routine.
I've got sore muscles.
I'm feeling strong.
Ben Larson (01:16):
Yes.
AnnaRae Grabstein (01:17):
I am not.
I'm not in DC pounding thepavement, so very grateful that
you are there pound in thepavement.
Ben Larson (01:24):
So very grateful that you are there.
How's it?
It's all right.
This is my favorite week of theyear.
I'm here with about 60 to 70 ofmy favorite people in the
cannabis industry and, yeah, weknow it's been a tough time in
the cannabis industry, sounderstandable that not everyone
can be here, but rest assuredthat we are here speaking on
behalf of the industry, and it'simportant.
(01:46):
I know a lot of people feel thatwe aren't seeing progress and
that the conversation is movingtoo.
The bipartisan nature of the ofthese different conversations
(02:06):
are shifting.
You know, we can have veryhealthy conversations with
republican committees and talkabout the need for safe banking
and all this kind of stuff, ofwhich I think we do have an
eighth iteration coming, comingdown the pike at some point this
year and, yeah, yeah, it's timeto charm um.
But even more important thanthat, there's there's just like
(02:29):
these persistent existentialthreats that we still face as an
industry, and whether you're onhemp or cannabis, I think it's
all signaling to to how a lot ofpoliticians and and communities
still view thc, and so the theno deductions for Cannabis
Businesses Act was introducedthis year, which would
essentially memorialize 280Epenalty, even with rescheduling
(02:53):
or the States Act or what haveyou.
And so you know, not only arewe fighting for progress, but
we're merely fighting to, to atleast maintain the status quo,
which is a little scary.
AnnaRae Grabstein (03:03):
This idea that maintaining the status quo
is a win is so unfortunate.
And I hear you and I appreciatethat folks like you and the
others that are showing up in DCto get our voices heard are
working to maintain the statusquo, but I just see this endless
disconnect between ourrepresentatives in Washington
(03:24):
and the realities of theAmerican constituency.
We know how the large majorityof Americans are in support of
legal cannabis access, and sowhy is it that these few small
voices seem to keep trying toset us back to reefer madness?
Ben Larson (03:48):
small voices seem to keep trying to set us back to
reefer madness yeah, these are.
These are the questions I can'tanswer, but I I guess I can
simply say that the the swamphas not been drained and there
there's plenty of swampinesschanging, but there's always
seems to be a new voice thatthat just wants to to shut it
all down and yeah, I did.
I mean.
Well, that's the other piece,right.
The persistent conversationsthat are necessary for just pure
(04:10):
educational purposes.
I think we had somewherebetween like 20 and 30% freshmen
Congress folk like in position,and so like these are new
conversations, not to mentionand I've said this on the show
before staffers.
They turn over every 18 months.
Those are the people that haveCongress's ear and are setting a
lot of the policy or drafting alot of the initial policy, and
(04:31):
so if they are not educated onthese things, many of them have
never even heard of 280E, and soit's just this persistent
conversation that has to be hadin order to see any progress to
be had in order to see anyprogress, and I'm not trying to
go back to the oldadministration, but one of the
things that I appreciated whenJavier Becerra was appointed as
(04:52):
the head of HHS under the Bidenadministration is that he's a
native Angeleno.
AnnaRae Grabstein (04:59):
He comes from Los Angeles and, as a result,
you don't come from Los Angelesand not understand cannabis to
some extent.
There's stores everywhere.
There has been medical cannabisdispensaries there since 1996,
when Prop 215 came on, and thenreally experienced like a lot of
complexity and progress and allkinds of different ways when
(05:21):
legalization hit.
And just knowing that there wassomeone in Washington that,
just by virtue of where theycame from, understood something
about the industry washeartening.
We know how many states nowhave legal programs with
regulated cannabis and nowthere's hemp in even more places
, and so I hear you that there'sthis massive turnover.
(05:44):
But more and more people havepersonal experiences just
because of where they live andthe things that they drive their
way to school or work or thegrocery store.
So, yeah, I think that theefforts to try to mainstay the
status quo are so critical, butlet's also see some progress.
I can't wait.
Ben Larson (06:06):
Yeah, well, to leave it on a high note, I will say
that you know?
A Sun Tzu quote, if I may, isthat in the midst of chaos
there's also opportunity, right,and we are in a fully read
administration which, ifanything, if we find the talking
point, we find the path forwardthat we might actually see
(06:30):
progress, and that might come inthe form of safe banking,
because generally people agreethat if we put people in banking
and provide access to the rails, that creates transparency and
a safer industry.
We also have the States Act,which preserves states' rights
(06:51):
and allows states to makedecisions for themselves and
prevents federal overreach.
These are talking points that Ithink both sides can get
aligned with and if they don'tget overcomplicated, maybe we'll
see progress.
AnnaRae Grabstein (07:03):
Nice, I like it.
Okay, leave us with some hope,and I am excited for this
conversation that we're going tohave today, because one thing
that Washington did provide in2018 with the Farm Bill was some
new channels for cannabinoidsto come to market, and, while
it's taken some time, we now seehemp-derived cannabinoids in
(07:25):
lots of traditional retailchannels, including convenience
stores, and we have somebodyhere today that's going to share
a lot more information with theaudience aboutar, who has spent
the past 15 years as ajournalist and a leading voice
(07:48):
in the emerging productcategories of mainstream retail,
including early in the vapingand tobacco spaces and now in
the cannabis space.
She began her journey as ajournalist on CSP's media
platform as the senior tobaccoeditor and now serves as the
director of marketing andindustry relations at IC
(08:09):
Innovations, where she createsmerchandising solutions and
services for emerging brands,especially those in THC.
Melissa is still a freelancejournalist, but now is also on
the board and the chair of theboard of CSP's newly formed
C-Store Cannabis Board, and isalso on the NACS Foundation
(08:33):
Advisory Committee, and that isthe National Association of
Convenience Stores, which is atrade association.
So lots of stuff to talk withMelissa about today.
Really excited to have you here, melissa.
Thanks for joining us.
Melissa VonderHaar (08:44):
It's wonderful to be here.
Thank you so much for having me.
Ben Larson (08:48):
And I'd like to point out that in talking with
Melissa, I have learned that notonly is she on the board of
this new committee because it'san opportunity, but she's
actually a big supporter ofcannabis and has long been a fan
.
Can we say that in public,Melissa?
Melissa VonderHaar (09:03):
Absolutely.
I am really trying to normalizeit.
We have this conversation withmy husband all the time about
should we let our kids we have aseven and a two and a half year
old should we be consumingcannabis in front of them?
And I live in New York.
It is a legal state and I wantto normalize it.
My parents would never hesitateto have an alcoholic beverage
(09:23):
in front of us growing up.
Now, granted, my dad worked forAnheuser-Busch, so you know I
learned how to pour a draft beerat five years old.
So that might not be the mostnormal, but we drink in front of
our children.
It is not a taboo thing to do.
So why would I hide cannabisuse?
I am a proud cannabis user.
Ben Larson (09:41):
Amen.
AnnaRae Grabstein (09:47):
Yeah Well, so let's just jump in.
You've been at the forefront ofthe convenience store space for
a long time and I'm curious ifyou could tell us how you've
seen perceptions shift aboutcannabinoids over time.
Melissa VonderHaar (09:55):
Yeah, it's really rewarding for me to watch
this happen.
I did my first cannabis storyfor convenience one year onto
the job at CSP.
That stands for C-StorePetroleum.
Nobody ever refers to it asthat, so if I get into acronyms,
I'm going to trust the two ofyou to ask me to clarify.
I started there coveringtobacco nicotine and that
(10:18):
started in 2011.
So when Colorado and Washingtonwent legal, colorado framed
their legalization efforts astreat marijuana like alcohol and
tobacco.
Now, growing up in theconvenience industry, as I said,
my dad worked forAnheuser-Busch.
He ran their small format sales.
So one of the first facts Iknew before I was 21 was that
(10:39):
7-Eleven sells more beer thanany retail or bar in the entire
world.
Convenience sells the most beerand by far the most tobacco.
So when I heard it framed thatway, I said we better be paying
attention to this, because ifit's going to be treated like
alcohol and tobacco, it's goingto end up in C-Store or it
should.
And I want to thank my boss atthe time, mitch Morrison, for
(11:02):
allowing this kind of naive29-year-old to write about weed
to a very, very, veryconservative industry.
And in fact, when I did thatstory, I could not get a single
retailer to go on the record.
So the story is all off therecord, quotes of retailers
saying, yeah, we think thiscould be a really good fit, but
I don't want to be the guy thatgoes to my CEO and suggest that
(11:26):
we sell dope like bunch ofboomers.
So that's the language that wasactually used.
And to watch the evolution ofthat happen to now.
You know, fast forward to lastweek at the CSP Cold Vault Forum
, which was filled with categorymanagers from all over the
country and the biggest takeawayall of them had was THC
(11:46):
beverages here.
And we are so excited and we'resampling it.
One retailer had a can of 10milligram soda at nine in the
morning.
So bravo to him for normalizingit even further.
To see the excitement and thewillingness to talk about it.
And you know, yes, that hastaken almost 15 years, but it's
(12:08):
really exciting.
So that's the evolution of thatjourney.
It's really rewarding to seejust how much both the
convenience industry wants toengage in this space and, on the
flip side, seeing that thecannabis industry wants to
engage in convenience.
I've been used to ringing thisbell of convenience.
(12:28):
Pay attention to cannabis.
Let me tell you all about it.
This year marks the first timethat I've really gotten to talk
to cannabis brands aboutconvenience.
Ben Larson (12:36):
What's really interesting is like the scale
that convenience has.
Right, because a lot of us inthe industry have talked about
liquor stores.
Where I think there's about 40to 50,000 liquor stores across
the nation, convenience is inexcess of 150,000, right?
So like what's that?
Three or four times as large?
(12:57):
What's also interesting, though, is, with C-Stores, that you
have a lot of independentoperators, and so what I think
would be helpful is to justunderstand how they function a
little bit differently than say,the liquor store channel, just
so we can understand that alittle bit better.
Melissa VonderHaar (13:12):
Sure, sure.
So you hit the nail on the headthere, ben.
It is over 150,000 C-stores.
That is three times.
Liquor.
Grocery is also about 45,000.
So it's you know, if you lookat the full retail landscape of
where this is being sold,c-store feasibly could represent
more than half.
That is just a huge, hugechannel.
(13:34):
You are correct, it is.
Of those 150,000 stores, 90,000plus are single store owners.
So you know, you hear aboutCircle K, 7-eleven, casey's and
yes, they have massivefootprints, but they actually
don't represent the majority ofthe industry.
And what's so interesting to meI was thinking about it the
(13:56):
other day the entrepreneurialspirit of those single store
owners is so aligned with whatI've seen with these THC
beverage brands, thc startups ingeneral.
They want to try new stuff.
They are the ones that are atthe forefront of these emerging
categories.
It's something that I havewatched happen.
I watched it happen with Vapor.
(14:17):
The independents were the firstones to bring that in and then
it rolls out to the big chains.
The other really interestingfact that I think people should
understand about convenience isthat even though they're
competitors, they really worktogether.
They go to an event like ColdVault last week.
They go to the NAX show.
(14:39):
That's the National Associationof Convenience Stores.
They throw a giant trade showin October.
Association of ConvenienceStores.
They throw a giant trade showin October.
They go to these events andthey work together.
Wawa and Sheets are two of thebiggest retailers in the
Northeast and they're both outof Pennsylvania.
They advise each other.
It's not the kind of oh, don'ttalk to me, you're a competitor.
(15:01):
They work together.
And that goes for the singlestore owners too.
There are many, many singlestore or independent owners that
are on the NACS board becausethey do these new categories,
but then they're talking to theCircle Ks, the 7-Elevens, the
KCs, the Wawas, the Sheets andreally advising them.
They are the ones that aregetting stuff moving.
(15:23):
So I know when I talk to a lotof brands, they want to get in
with the big guys, right?
That's the easiest way to fillthe doors and activate.
However, don't sleep on theindependents.
Getting in with the rightindependent who is going to
champion this category can makeall the difference in the world.
AnnaRae Grabstein (15:43):
Let's talk about that a little more, this
concept of championing newcategories.
You said that independentC-stores and C-stores in general
are often early adopters of newproducts and certainly we're
starting to see traction of THCbeverage.
I'm curious if you could talkabout what makes the convenience
(16:04):
model compatible withinnovation and trying new things
.
Is it that people arepurchasing individual units or
what is it?
Melissa VonderHaar (16:15):
Yeah.
So let me make the case why, ifyou are launching a new product
category, convenience is whatwill make the difference.
It is the activator.
They might not always be thefirst one to the table right.
Vape was first sold at mallkiosks.
That was the thing.
Smoke shops picked it up.
Sooner there were vape shops.
However, convenience is whattook it mainstream and I really
(16:38):
so firmly believe, and havebelieved for 15 years, that
convenience can unlock not justTHC beverage, not just hemp
products, but really introduce awhole new wave of people to
cannabis.
So it can really benefit notjust those of you in hemp but
those on the adult use model,because there are people that
(16:59):
have never, never, ever wantedto go into a dispensary for
whatever reason, but they gointo a convenience store all the
time.
So let me, let me drop somedata for everybody.
I shared the number 150,000.
That's a lot, but let me putthat in context.
Nearly 90% of Americans livewithin 10 minutes of a
convenience store.
(17:20):
Now I'm in New York.
That's not terribly impressive.
I expect to be in 10 minutes ofanything, but that includes
rural Utah, where you might be30 to 40 minutes from a hospital
.
The convenience store is inthose communities.
It's not just where you go toget fuel, it is your grocery
store, it is your liquor storeand it is your quick service
(17:41):
restaurant.
Casey's again, they are thethird largest retailer in the
country.
However, they are the fifthlargest pizza company.
They are up there with PizzaHut, domino's, and that's with
limited footprints.
With that in mind, aconvenience store that sells
fuel has 1,100 people goingthrough their store every day
(18:02):
and that's 80% of the channelsells fuel.
So just in terms of the amountof people going through there,
it is huge.
Not everybody goes to a grocerystore.
I do DoorDash or Fresh Directfor my groceries.
I rarely go into a grocerystore.
Not everybody goes into aliquor store, especially people
that are in recovery, especiallypeople that are not drinking.
(18:24):
Almost everybody drives, whichmeans almost everybody has to go
to a convenience store to getgas.
We sell 80% of the gas in theUnited States.
They also now have fuelchargers too, so they are
investing in EV.
So A you're getting theaudience, and it's a broad
audience, it's not just oneperson, it is, again, anybody
(18:45):
that drives is probably goinginto a convenience store and
they're Of that.
The singles are what is sold interms of beverage.
It is 60, it's over 60% of thecategory are singles.
It's twice as much as six packs.
And why that's so important foran emerging category it's not
(19:08):
just the visibility, it is.
You might not want to spend $15,$20 on a multi-pack of a THC
beverage when you've never hadTHC.
That is a big commitment.
You don't know if you're goingto like it.
However, a single, even amarked up single, you could sell
that for $6 or $7.
That happens with beer.
That is a great impulse andthey're already shopping and 60
(19:32):
plus percent of cold vaultshoppers purchase, make an
impulse purchase.
So, in terms of exposure to afull breadth of America
consumers and in terms of peoplethat are willing to purchase,
another interesting fact andthis is why cold is so important
in convenience, which isdefinitively different than
liquor, is that I just pulledthis data of beer 50% of beer
(19:58):
that is sold at convenience isconsumed within the hour.
It is a for me for now channel.
So cold is super, superimportant.
You know, realistically, yeah,somebody might grab that
beverage single, take it homeand drink it immediately.
Just in terms of activating,this is where you can do it.
Ben Larson (20:17):
So I'm going to quote one of my favorite
philosophers right With greatpower which this sounds like a
lot of power comes greatresponsibility.
I think one of the challenges,especially from the lens of the
cannabis industry, that we havebeen seeing with C-Stores is is
this willingness to innovateahead of be it regulations or
(20:37):
guidelines?
Now that CSP and others NACsare acknowledging the category
and stating it, does that givean opportunity to provide
guidelines as to what should besold in C-Stores and what
shouldn't be sold?
Because I think that's thebiggest criticism of the
emerging space.
Melissa VonderHaar (20:57):
Yeah, and that's you know.
I'm not going to look you inthe eye and say that every
single C-store owner is aresponsible actor.
You have 150,000, there aregoing to be some bad actors in
there.
That said, the people that aregoing to a NAX event, the people
that are going to a CSP eventor reading the magazine or
participating in the board, theyare absolutely going to look at
(21:21):
this, they will listen andrespect.
They want to be responsibleplayers because we as an
industry know if regulators wantto make an example, the easiest
way to do so is the conveniencechannel.
We have three times as manylocations.
So you know, we saw this happenin Alabama, where C-Store,
seemingly, is the only channelthat was locked out, and you
(21:43):
know, yes, part of that is thatthe channel needs to advocate
for itself, and we are.
I think there is an awarenessand a desire.
I think Alabama is going to bethe rallying cry of this
industry.
However, even you know, I wasspeaking to a retailer in
Louisiana.
In Louisiana, everywhere cansell liquor.
They have drive-throughdaiquiri.
So it was not the liquorchannel advocating and saying,
(22:05):
hey, this should be 21 and up,because convenience stores can
sell liquor in Louisiana.
It was that the regulators weregetting pressure to do
something, and by locking outconvenience, which is what they
did they said you need a hemplicense in order to sell hemp
and oh, by the way, if you sellfuel, you cannot have a hemp
license.
It was a very clear lockout ofconvenience.
Ben Larson (22:30):
It was tied to fuel, so interesting.
Melissa VonderHaar (22:33):
Yeah, it was what I was told and the reason
that I can see is politically itmakes a great headline to say,
hey, we locked out three fifthsof the market.
Over half of the market nowcannot sell hemp, and that's a
very simple, easy way to do it.
And because of the size andbecause, yes, there are some bad
(22:53):
actors, but I would argue thereare plenty of bad actors in
liquor.
There are plenty of bad actorsin liquor.
There are plenty of bad actorsin grocery.
I have seen them very firsthandin Brooklyn, new York.
Because there are bad actorsand because of the size, it is
the easiest channel to kind ofpick on and I've seen this
happen with tobacco and nicotineespecially.
With tobacco and nicotineespecially, there was a movement
(23:15):
in 2019 with the height of kindof the youth vaping usage where
the FDA was talkingspecifically about locking
convenience out of vapefederally.
No evidence Based on that.
There is absolutely no evidencethat convenience cannot
age-gate.
I will note that conveniencechecks more IDs on a daily basis
than TSA does, and I'll alsocall out NACS.
(23:36):
The National Associationcreated its own age-gating
software, trueage, and retailersthat are using this can
demonstrate that they have 100%compliance on carding.
It is a very simple, seamlesstechnology, and I would beg you
to show me an example of anotherindustry that created their own
(23:57):
age restriction software Forconvenience.
When you talk about responsiblepractices, it's so important to
this channel.
Why?
Because over 50% of theirin-store sales come from
age-gated categories.
Tobacco is the number onedriver of in-store sales.
Beer is up there, I think it'snumber three.
(24:19):
They're so important.
And so if they screw up onage-gating, if they get a
violation, if they lose theirright to sell, they have lost
their business.
They cannot afford to be laxabout this.
So, yes, there are bad actors.
Yes, I think a conversationneeds to be had about dosing and
(24:39):
about merchandising, and aboutmaking sure that you protect and
make sure that kids don't getaccess and make sure that, by
the way, a grown up knows thatthey're buying an intoxicating
product, because that's notalways clear.
AnnaRae Grabstein (24:53):
I think yeah, I want to jump in.
I think that what you'rebringing up with, this idea of
bad actors is something thatcomes up in all areas of the
cannabis industry and, just ingeneral, that bad actors
overshadow the large majority ofeveryone else in almost all
(25:13):
situations.
I don't think we need to spendtoo much time on it.
I think that you've reallydemonstrated that there is
largely age gating going onproperly, but you did bring up
that one of those age gatedproducts tobacco has been
driving most of the revenue atC-stores for a long time and we
know that there's decliningtobacco revenue across the globe
(25:35):
.
Ben Larson (25:37):
And unless it's in.
AnnaRae Grabstein (25:39):
Yeah, unless we're talking about the pouches.
But let's just be real here.
I think that C-stores also arelooking at how can they
diversify as they're havingdeclines in this historically
large category of tobacco, andhemp-derived cannabinoids are an
(26:01):
option that seems like it makesa lot of sense and at the same
time you also talked about that80% of C-stores sell fuel.
Hence, I think, the term gasstation weed that people are
throwing around and I'mwondering if you would respond
to that.
Gas station weed does not havea positive connotations in the
(26:23):
marketplace.
Melissa VonderHaar (26:25):
No, and this is not the first time we've
experienced this Gas station.
Sushi was another rallying cryfor a while.
Convenience historically, youare absolutely correct.
We talk about the holy trinityof convenience.
It's gas, cokes and smokes.
And smokes are absolutelydeclining.
Nobody is considering otherwise.
(26:47):
And yes, ben, you're right, zinand Modern, oral and, to an
extent, vapor, are helpingoffset that some, but it's still
.
It is a category that is indecline and regulations are
likely going to continue todrive that, as well as changing
attitudes and looking atwellness.
So convenience for the entiretyof when I've been there, and in
fact probably going back to whenmy father started in the 1980s,
(27:10):
they have recognized that theyneed to be less reliant on
cigarettes.
And in fact, the next state ofthe industry data, their big
data source, shows thatcigarettes used to be the top
driver of in-store sales andin-store profits.
Several years ago, pacbev tookover in-store profits and it is
within striking range ofin-store sales Every year.
(27:33):
I kind of do a mental bet withmyself of is this the year that
PacBev overtakes cigarettes?
So those categories are indecline.
We also know that beer is notdoing so great.
That's another core category.
And fuel we have more fuelefficient vehicles.
So trips as a whole are downfor convenience.
So, yeah, they need to moveaway from it.
(27:55):
And so that I'm going to bringthat back to the gas station
weed, I promise, because that isa trigger word for me and I
really never want to hear itagain.
Ben Larson (28:03):
This will be the last time I swear.
AnnaRae Grabstein (28:05):
Gas station weed.
Melissa VonderHaar (28:07):
If there is a takeaway I would like every
person interested in working inconvenience to know, is that get
gas station weed out of yourmouth, out of your vocabulary.
You say that in front of aretailer and it's going to be an
automatic.
I don't want to work with thatperson.
Gas station sushi big thing.
The industry has really pivotedto be food service forward.
(28:28):
It is now one of the top profitdrivers of stores, given that
not every store does foodservice.
But you look at Wawa.
They are known for hoagies.
That food is good.
I would rather stop there anyday than a McDonald's or a Taco
Bell.
When I'm on the road, Casey'sis doing pizza.
But it's also the independents.
You can go on YouTube and thereare YouTube channels dedicated
(28:49):
to independent retailers thatbring in a grandma to do her
fried chicken on a Sunday.
So we have been workingactively to get away from gas
station sushi and really beproud of the food service we're
doing.
And I know we can do it withcannabis as well.
And when you say gas stationweed, that's not just an insult
to convenience retailers, it'san insult to every brand that
(29:11):
sells inconvenience.
Would you say gas station Pepsi?
Would you say gas stationDoritos?
No, of course you wouldn't,because Doritos are Doritos,
Pepsi is Pepsi and a hempbeverage is a hemp beverage,
whether it's sold in convenienceor in a liquor store or in a
grocery store or DTC.
We don't single out other.
(29:32):
I don't say bullet riddenliquor store weed, Like I
wouldn't say that.
And I wouldn't say grocery weedor hemp shop weed, it's just
cannabis.
AnnaRae Grabstein (29:43):
Like it's just the flip side is that what
you're talking about isacceptance, and something that
proves acceptance more than theterm that you're talking about
is that Nielsen, the largestbrand data aggregator in the
world, is now covering thecategory, and I'd love it for
(30:03):
you to tell the audience moreabout what Nielsen is doing and
the data that they are sharing.
So far, yeah.
Melissa VonderHaar (30:10):
So I am going to shout out Jason
Zielinski with Nielsen, who lastweek gave a preview at CSP Cold
Vault to kind of the data thatthey are tracking specific to
hemp beverage at convenience,and he was the first to
acknowledge this is the veryearliest data set.
They are actively looking formore brands to get into their
(30:31):
database.
So I will share contactinformation on how to get in
touch with Jason on my LinkedIn.
But if you're not in theirdatabase, you should get in it
because that will help get realconcrete data.
So this is early on.
They should have full datalater this summer is what I'm
being told, but he gave us apreview and it was really
(30:51):
promising To me.
No, it's not hugely surprisingthat we're seeing 345% growth at
convenience.
This is the first time they'retracking it and I've again
watched this happen with vape.
You have these triple digityears because the category is
going from nothing.
To an extent you're stillseeing that within in modern
oral.
When you're going from nothing,the growth isn't so much
(31:13):
necessarily.
What I'm looking at what didstand out to me is their data on
dosages and what is selling atconvenience.
I think you're both well awareanybody that's looked at
LinkedIn recently.
There is this internal debate inthe hemp industry of what is
low dose and is this too low?
We should be doing more, andthat it seems to be that what
(31:37):
we're seeing at liquor, or atleast anecdotally, is that the
higher doses are all that isselling In convenience.
By far and away the largestdose category that was selling
was five milligrams.
Nielsen showed that at 35% ofconvenience sales are in that
five milligram range and thatwas, as opposed to 9% in the six
(32:00):
to nine range, 9% in the 10milligram range.
So it is outselling.
Now I'll put the caveat of thisis early data, so it could be
that 80% of what they'retracking is in Minnesota where
there's the five milligram cap.
We will wait and see.
And the other thing that gaveme pause is that tied with five
milligrams was 35% of whatNielsen was seeing was all other
(32:23):
aka THC beverage that didn'tlabel the dosage.
Ben Larson (32:28):
So we'll see where and this was specifically
beverage that they were callingout- this was specifically
beverage.
Melissa VonderHaar (32:34):
It was calling out.
This was specifically beverage,it was a beverage event.
So I'll be curious to see ifthey are tracking other formats.
I know a few places are.
I'll call out ManagementScience Associates, msa.
They track distributor shipmentdata, so it's a little bit
different.
They actually haven't beentracking form factor I believe
they have switched but they weretracking by cannabinoid and
(32:58):
they have also seen great growthin Delta 9 of late.
Ben Larson (33:03):
What do you think is driving this difference?
Because, as you mentioned, likeon LinkedIn, we do hear from
the liquor store owners.
John Halper from Top 10 Liquorshas been really vocal.
I've talked to leadership atTotal Wine and Specs and yeahx
and yeah, far and away 10milligram products are flying
off the shelves and I'madvocating to make sure we
(33:23):
maintain the on-ramp.
But it's great to hear thatthis on-ramp is actually really
viable in the convenience stores.
And was there a hypothesis thatyou had that this would
actually be true?
Or you know what's yourperspective on the difference of
the consumer?
Melissa VonderHaar (33:34):
Yeah, you know, I've had a lot of
conversations with DianaEberlein about you know, as
we're lobbying at the statelevel and liquor is saying this
should only be sold at 21 and uplocations, is there a
compromise to be had where maybethere is a higher cap for
liquor and a lower cap forconvenience?
And while on principle I don'tthink there's evidence that
(33:57):
suggests that convenience isill-equipped to sell higher
dosage and also, by the way, Ithink it misrepresents what THC
is, to suggest that it's thesame as tequila or vodka or
bourbon it's not so on principle.
I'm not thrilled about that.
Bourbon it's not so onprinciple.
(34:17):
I'm not thrilled about that.
But to me, a convenience storeis going to be a lot of new
consumers, so I would rather seethose lower doses there,
specifically because somebodythat's new to the category.
They shouldn't be having a 10milligram beverage as their
first entrance and a lot ofpeople aren't aware, and so I
have long held a personal theorythat if it is 10 milligrams and
(34:37):
up that are selling, then thoseare experienced cannabis users.
It's either experiencedcannabis users or it's somebody
that is about to perhaps nothave the best introduction into
the category, and that's okay Ifliquor wants to have the
experienced cannabis users.
I'm fine with that.
If dispensaries want to havethe experienced cannabis users,
(34:59):
that's great, that's where theybelong.
But convenience you are goingto get the new consumers.
And so by seeing fivemilligrams do well and in fact
they were doing okay with thetwo to threes as well I don't
remember the exact figure, butit was higher than the tens
that's great To me.
That says we are getting newconsumers, which is my whole
argument for convenience.
This is what can unlock andnormalize a new category.
(35:23):
We saw it happen with energydrinks, we saw it happen with
vapor, we saw it happen withmodern oral and, if we are given
the opportunity, we are goingto see it happen with cannabis.
And again, as I said at thebeginning, that is good news for
the liquor stores that arecarrying it, because the
convenience store shoppers willgo to a liquor store to get a
six pack or a 12 pack or aspirit bottle, especially if
(35:45):
they can't get it at theirconvenience store.
They may decide hey, I reallylike cannabis, I'd like to see
what more is out there.
Let me go to my dispensary.
That, by the way, I never wouldhave done before, but now that
I know that this is not this bigscary reefer madness thing.
This is actually quite wonderfuland, by the way, a great
alcohol alternative.
(36:05):
Let's go explore what I can doat a dispensary.
It makes me optimistic and I'llsay yes.
The other explanation could bethat convenience operators in
that database may only beoffering fives or they may only
be able to offer fives.
There are a lot of reasons forthe data.
I am not saying that what'shappening in liquor is
(36:26):
necessarily not accurate or, youknow, definitively only
experienced cannabis users.
But this gives makes me reallyoptimistic of the theory that
convenience is where newconsumers can get into this.
AnnaRae Grabstein (36:41):
So, as you're talking about these legislative
debates in terms of differentregulations for different
channels, I would like for youto paint the picture of the
landscape for the tradeassociations and the policy
groups both that you're involvedin that are working in
convenience and help theaudience to understand what the
(37:01):
policy agenda is that theseorganizations specifically are
advocating for, as it relates toconvenience's participation in
the channel.
Melissa VonderHaar (37:11):
Yeah.
So I will start with theNational Association of
Convenience Stores, NACS.
And let me be clear I do notwork for NACS and I don't work
for CSP.
I do a lot of work with themand I have't work for CSP.
I do a lot of work with themand I have talked with them both
about what I'm going to sayhere.
So these statements are blessed.
National Association ofConvenience Stores has long
taken a position on virtuallyevery category that if it is
(37:35):
legal convenience should beallowed to sell it, and they
even have a statement on thisabout marijuana.
That if it is legal convenienceshould be allowed to sell it,
and they even have a statementon this about marijuana.
That if it is legal, regulatorsshould not be picking winners
and losers in the retailchannels, especially when there
is zero evidence that aconvenience store is less
equipped to sell an age-gatedproduct than any other channel.
(37:57):
Now, what has updated with NACS?
And I will note they are afederal organization so they do
not lobby at the state level.
They do work with state levelgroups, but they will not take a
position on most stateregulations.
However, they have recently,very, very recently, changed
(38:17):
their stance in terms of who canjoin as a NACS supplier partner
and who can do booths at theirtrade show in October, and I am
very happy to announce that they, as of March, THC beverage,
specifically, specifically, hempderived THC beverage.
Those companies are allowed tojoin NACS as supplier partners
(38:40):
and they are allowed to havebooths at the show.
They are not allowed to sample.
That said, for 2025, NACS istotally sold out on booth space
and they also have some policiesthat they have to consider.
You know, as they are going toembark on this THC journey, they
are an organization again,federal organization industry
(39:02):
advocacy organization, sothey're very sensitive to having
products that are not legal atthe show and I can tell you it's
been a big problem.
It is a huge trade show andthere are people that say I'm
going to do cigars and then theyhave illegal flavored vapes.
Or there are people that aresaying, oh, I'm doing beverages
and oh, hey, look, they havesome THC beverages that really
(39:22):
aren't supposed to be there.
So they are in the process ofkind of determining what the
policies are going to be, but,that said, a THC beverage
company, as of today, can joinas a supplier member, which gets
them engaged with the industryand also puts them first on the
list to learn about those newbooth policies.
So that is super exciting.
(39:43):
And I can say that there arepeople within the NACS
organization that are doing somegreat, great advocacy at the
state and local level.
So that is wonderful.
It's just not officially partof NACS CSP.
They are a media company.
They do media and events.
There is a little bit of adifference, However.
They came up with the idea ofdoing this C-Store Cannabis
(40:06):
Board.
They already do one fortechnology.
They do one for advancingwomen's causes, so they really
do get involved in importantindustry areas in creating these
boards that are really abouttaking things to the next level.
And when they approached meabout chairing the board, I said
I love this, I'm super excitedto do it, but regulatory
(40:27):
advocacy has to be at theforefront because we are not
organized yet and I think thereare still retailers that are a
little nervous about coming outfull force for cannabis because
we are the channel thathistorically gets our wrists
slapped.
So there's been some nerves.
That said, I can tell you beingwith retailers last week after
(40:48):
Alabama passed their bill,there's a rallying cry.
People seem to understand thatwe cannot rely on brands and
distributors to protect ourright to be in this channel, on
brands and distributors, toprotect our right to be in this
channel.
And even if you are not in ityet, you need to protect your
rights.
I said I grew up a brewery brat, so Pennsylvania beer is
something I'm very familiar with.
(41:09):
Mainstream retail was lockedout of Pennsylvania beer sales
for a hundred years afterprohibition and they're still
untangling it and I do not wantTHC beverage or THC as a whole
to become Pennsylvania beer.
We have to work to keep thoselaws from getting passed and
carving out winners and loserson the retail space.
So, while CSP will not besending lobbyists to the state
(41:32):
and local level, we are going torely on our board members on
the retailer and the brand sideto alert us to when something is
going on so that we can get thelocal groups up there and
explaining why we are veryqualified to sell age-gated
products.
Ben Larson (41:49):
Melissa, you're highlighting a lot of the
complexities of constantlyshifting stands of legislation
as these categories emerge.
I really appreciate yourperspectives on this.
One of the conversations thatkeeps popping up is the
influence of alcohol and thethree-tier system.
I'd love to hear yourperspective on the three-tier
system and how that perspectivemight differ from that of the
(42:12):
liquor store channels.
It's been a very sensitiveconversation on LinkedIn, as
you've probably seen.
Melissa VonderHaar (42:18):
Yes, yes, I have observed, and I'm sure I'll
get some flack because, yeah,the three-tier system is a way
to protect people and one of mybiggest concerns with this
category.
I was 29 when I startedcovering Vapor and it was very
similar in so much as, hey, thisis this whole new thing that
(42:39):
has not existed before, that hasthe opportunity to be a harm
reduction tool for smokers andit has this opportunity to
totally change our whole tobacconicotine landscape and it's
super, super exciting.
And it was very similar to whatI'm seeing with THC beverage,
just in so much as hundreds andhundreds of brands out there,
(43:01):
you have no idea who's going tobe the winners and losers of it.
It's all moving at this veryfast pace and then, oh hey, at a
certain point it gets popularenough that kids are using it.
And what happened with vape?
It's an example of whatshouldn't happen in a CPG
category.
The growth here versus othercountries is different and it's
(43:23):
in part because it got out ofcontrol.
There wasn't responsibleplayers happening right away and
that really stymied thecategory.
We are still kind of clawingour way out of it.
There's still a lot of illegalproduct on the market.
There are still a lot of brandsthat are waiting for approval
from the FDA, and it was becauseof this product on the market.
There are still a lot of brandsthat are waiting for approval
from the FDA, and it was becauseof this course correction that
(43:43):
happened.
And whether it's through thethree-tier system or something
else, I don't want to see thathappen to THC.
The stakes are too high because, as awesome as the potential of
vape was, we have never seen acategory with the potential like
this before, because it's notjust an alcohol replacement or
an intoxicating.
There are functional aspects ofthis and oh, by the way,
(44:05):
there's a million differentforms that you can use, whether
it's beverage, edibles, flour,vape, topicals.
I cannot wrap my head aroundhow big it could possibly be if
we do this right.
And so for me, yes, I amsupportive of three-tier as a
way to do this responsibly andshow that we're doing it.
That doesn't mean I outrightoppose D2C.
(44:27):
It doesn't mean that I outrightoppose doing something more
similar to tobacco, which is notrequired to go through the
three-tier system.
But the reality is, if you'regoing to be in convenience with
90,000 single-store operators,you're not going to sell direct
to all of them, the easiest wayfor you to service those 90,000
(44:47):
independents is to go through atrusted distributor, whether
it's an alcohol distributor orother CPG distributor.
When I look at that fightthat's going on, it seems to be
a very right now thinking fight.
It's not looking at whatnormalization of this category
looks like.
AnnaRae Grabstein (45:05):
Bringing up distribution is a great segue
into how brands are settingthemselves up to win in C-stores
and I know, as part of your dayjob outside of the thought
leadership and the industryadvocacy that you're doing and
that we're talking about you dowork on merchandising and
displays and things in storesfor brands and I'd love it if
(45:29):
you could help us talk throughand understand what are some of
the wins that you've seen inC-Stores with brands and how you
think brands can be settingthemselves up to succeed in the
C-Store space.
Melissa VonderHaar (45:43):
Yeah.
So I am super, super excited.
For the first time in my careerI can say that THC is part of
my day job.
Usually it's been this extralittle passion project of mine
doing the freelance journalismand the education work.
That said, after CanadaCon,after kind of the progress going
on with CSP and NACS andmeeting with Cannabis, brand
(46:08):
after brand after brand, we kindof looked at our core business
model and said you know what?
Yes, we have these greatmerchandising displays, my IC
Store Innovations.
We specialize in small formatmerchandising displays
specifically for a conveniencestore channel that, by the way,
can size up for liquor andgrocery.
(46:29):
But kind of working on thepremise of it's easy to take
something small and make itbigger, it's much, much more
difficult to take those giantbeautiful floor displays that
I've seen at Top 10 Liquor, thatI've seen at Total Wine, and
try to cram that into not just aCircle K but like a Murphy's.
Those are kiosks.
They really don't have spacefor that.
Yes, our core business isalways going to be those
(46:51):
displays.
However, we realized withemerging brands, with emerging
categories, there's points thatyou are scaling up at a rate
that your team can't handle.
So, say you go from doing apilot at a major C store and
then they expand it and suddenlyyou're going from 500 locations
to 6,000.
(47:11):
You might not have the time tovet and hire a trade marketing
team to vet and hire aprocurement person to vet and
hire a new warehouse to handleall of this.
Our team has all of thosecapabilities and so my new role
on the day-to-day is for abusiness unit that we are
calling TradeWorks.
That is really complete trademarketing solutions and it is
(47:35):
looking at how does a brandapproach convenience.
And one of the big things thatwe really feel strongly about is
because this is a new categorythe brands that come in not just
showing brand leadership butcategory leadership and saying,
yes, we want to bring a displaythat doesn't just call out our
brand but does some education ondosing, on the minors, on how
(47:59):
beverage is different thansmoking or vaping or what five
milligrams is equivalent, to thebrands that are really taking a
category leadership.
In addition to brand leadershipand understanding the small
format space which, by the way,space is at a premium in a
convenience store.
It's thousands and thousands ofSKUs, so just getting on the
(48:21):
shelf in a cold vault it's onlya part of the battle, because if
you are in the bottom shelfcorner in a category that they
don't expect to see, they're notgoing to see you.
The average convenience storeshopper at the cold vault spends
15 seconds.
So, yes, we have merchandisingdisplays that can help you get
more prominent placement, butalso we are encouraging brands
(48:42):
to think about how do you builda category home and showing the
retailer that you are investedin these different categories?
Ben Larson (48:47):
boom and sometimes bust and you have the data, you
(49:08):
have the consumer insights.
If we're having the sameconversation a year from now,
what's your prediction over thenext 12 months as far as how
this category continues to growand expand?
Melissa VonderHaar (49:17):
Yeah, I think we're at the point of
precipice here where you'reabout to go from hearing
mumblings of independents and afew smaller brands or brands
that are doing it but aren'tallowed to talk about it or
don't want to talk about it.
I think, not even the next 12, Ithink in the next six months,
we're about to see thefloodgates open up and where you
(49:40):
will see major retailersinvesting in this space.
And I think, so long as we canget our act together and
advocate and make sure that weare not getting locked out of
states, but that we areadvocating, saying we want the
regulations, give us theguardrails so that we can do
this responsibly and let us bean ally in it, so that we can do
(50:03):
this responsibly and let us bean ally in it, I think it's
going to blow the doors offthings and it is going to get
new consumers into this categoryand you are going to see this
have a home in convenience and Ipredict that, if allowed, it's
not just going to be in the coldvault.
I think edibles, even vape, hasa home on the back bar, as
convenience retailers arelooking to drive more people
into their stores and build thebaskets.
(50:24):
This is a huge opportunity foreveryone.
AnnaRae Grabstein (50:28):
Wow.
What shift in terms of theworld that we lived in five
years ago compared to where yousee this all going.
I'm excited to see what happensnext.
Melissa, what is the best wayfor our listeners to stay in
touch and keep up with you ifthey're interested in anything
they heard today or want to juststay up to date on your latest?
Melissa VonderHaar (50:51):
Yeah, so I am super active on LinkedIn.
You are absolutely welcome toengage with me there, but also
email me.
My email is melissa atictradeworkscom.
AnnaRae Grabstein (51:03):
Awesome, and it is time for our last call.
So, melissa, what is your finalmessage for our listeners?
Advice, call to action.
Closing thought.
Melissa VonderHaar (51:12):
I gave this a little thought and I think
I've referenced a few times.
I'm second generationconvenience supplier.
I grew up with a dad in thebeer industry and, as we have
talked to new brands or evenbrands that are just new to
convenience full disclosure Iwas an arts major, so I know
zero about economics, but I doknow something about the four Ps
(51:33):
of profit, pricing, whatever,and I kind of tuned out the rest
.
However, in a recentconversation my dad cited that
with convenience there's a fifthP and it's the people.
The people are so important tothis industry and you really do
build relationships.
So for brands that are lookingto get involved in convenience,
I urge you to invest in people,whether it's getting people on
(51:56):
your team that have experiencewith convenience and can
therefore open some doors foryou, whether it's attending
events like Cold Vault, like theNACS show.
There are ways for you to getinvolved.
There's a million ways and theCSP board.
We are taking brand seats.
They are paid and we areprobably going to have more
(52:16):
applicants than we can deal with, but they will be doing a
cannabis specific event.
I can tell you that theretailers that were at Cold
Vault last week there were threebrands, thc brands that were
there.
Those retailers are going toremember that those brands
showed up, so I so encouragepeople to invest in people for
the convenience space.
Ben Larson (52:37):
Love it.
Invest in the people.
Melissa Vonderhaar, thank youso much.
This was an incrediblyinsightful conversation.
Thank you, thank you, thank you.
Melissa VonderHaar (52:46):
Thank you.
Ben Larson (52:47):
All right, anna Rae, what do you think?
My spirits are higher.
AnnaRae Grabstein (52:52):
It's wild just to think about all of the
places that cannabis could besold in the future, and to hear
that there are 150,000convenience stores that would
love to participate in thischannel is a little bit
mind-blowing.
It's a lot to think about.
Ben Larson (53:09):
Yeah, absolutely.
What do you guys think?
Thank you for engaging duringour live recording.
Thank you for liking,subscribing, sharing, doing all
the things with the podcast onApple, itunes or Spotify or
wherever you like to listen toyour podcasts.
Thank you to our teams atVirtosa and Wolfmeyer.
Thank you to our producer, ericRossetti.
(53:31):
Couldn't do this without youguys.
Thank you for allowing me to beout here in DC this week doing
the important work with NCIA.
If you're not a part of NCIA,really consider joining and
joining me next time in DC.
Thank you to everyone that issupporting and doing the work at
home and continuing to pushthis industry forward.
If you've enjoyed this episode,please share it, tell your
(53:53):
friends and follow us anywhereyou'd like to listen.
Until next time, folks staycurious, stay informed and keep
your spirits high.
That's the show.
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