California’s first month of adult use sales is in the books. At Caliva, we witnessed an incredible turnout that was met by our dynamic service from our team. We’ve already seen changes to regulations, and sure are more to come. That being said, we came prepared and are ready to meet changing demand from customers and regulations alike.
After a long time waiting, January finally came. Here’s how it went for Caliva:
Traffic Was Through the Roof
Legalization brought an expected massive uptick in foot traffic. New recreational customers lined up outside on the first day and continued to do so throughout the month. Many customers were older customers. They remarked to Budtenders and staff their amazement at legal marijuana after living their whole lives under prohibition.
The excitement of customers could be felt all around the sales table. Older customers were often blown away by the product offerings at Caliva. Going beyond flower, many were introduced to products like edibles, vapes and so much more for the first time.
The legalization buzz caused traffic to increase prior to legalization as well. Medical patients planned for the swell in traffic by stocking up in December. “We were super busy,” notes Caliva General Manager Erika Henika. “Even in the second half of December, we saw increased business from the year prior.” So far, much of Caliva’s returning medical patients haven’t come back to refill their supplies. Though, that should change in the coming days and weeks.
Taxes and additional costs prove to be a pain point for customers. New customers understand the additional taxes that include a 15% excise tax, as well as San Jose’s 10% business tax and 9.25% local sales tax. For returning patients, sticker shock has set in for some. “Because of the taxes, some products have doubled in price overnight,” Henika notes. She also said that regulations requiring changes to packaging also increased prices.
Despite a rise in cost out of Caliva’s hands, the rest of January proved to be an exciting and positive month filled with lessons and milestones for the team.
Massive First Month Sales and Potential Trends
First month sales were through the roof at Caliva. Sales about tripled in January compared to the year before. Caliva Purchasing Specialist Omar Ortiz noted an especially hard time keeping edibles in stock during the first three weeks of adult use sales. Meanwhile, Henika pointed out that the demand for low-dose edibles was of particular interest. In fact, despite stocking up heavily on products that adhered to pre-legalization regulations, Caliva sold through all of its pre-January supplies except for flower.
Ortiz went on to add that some surprising stats emerged in January. They include a jump in sales for prerolled and vape products. “This has me thinking that new customers like the convenience of not having to do much to medicate.” This could mean that a preference over joints and glass pieces could be forming, though it’s too early to tell at this time.
The next few months will undoubtedly be telling for Caliva and its customers. As the clientele becomes furthered educated, sales trends can start to form. “I think as customers become familiar with products, we will start seeing what brands stand out,” Ortiz explains.
With the first month in the books, Caliva is already well into assessing its next steps so it can best serve its growing customer base.
An Evolving Operation
An incredible first month was expected at Caliva. Essential preparation from the entire staff helped make the adjustments needed minimal at most. Erika Henika explains how the company took proactive measures in the months leading up to January 1. The team needed to be scaled while meeting Caliva’s high standards of customer service. Having the required processes in place helped make the recruitment a smoother transition.
While staffing and training proved itself to be rather uncomplicated, Caliva experienced pain points in other areas. One key area is the new role of educator that it must take on when dealing with some vendors. In other cases, a vendor may interpret the regulation differently and Caliva must decipher the meaning with them to act in accordance with the laws.
Regardless of the degree of the pain point, the entire operation changes when business triples in a month. In addition to staffing, Henika noted that “Every aspect of your business has changed overnight and you have to adapt.” That includes finding time for increased staff training as well as finding space for three times the product supply and its new packaging.
However, Caliva continues to adapt to the changes. While they can at times be daunting, the team remains like their customers: excited. With a proactive plan in place, the team understood change would come. “I don’t think we have to change focuses. It wasn’t a surprise what was going to happen. We knew it was going to be chaotic and crazy, and it has been,” Henika pointed out. Despite knowing the changes would come, some events could only be reacted to after recreational marijuana sales began. “For a lot of [adjustments], you couldn’t do much in December. You had to wait for the crazy to come and see what that meant for you. Now we’re adjusting and it comes down to adapting processes to this business that just tripled.”
An Incredible Journey Ahead
January proved to be the overwhelming success Caliva and California pegged it to be. Now, as the dust settles and the data is compiled, the company continues to adjust and adapt to the demand of the business.
Today, we’re excited to serve a growing base of customers of all ages. The excitement on faces as they enter the dispensary is infectious. Our Budtenders and entire staff aim to meet customer energy so each one leaves with a lasting, high-quality customer experience. Even as certain regulations and taxes could dampen a spirit, we aim to show them the benefits of adult use marijuana. The future is bright and the adjustments are already in place. More will come and we can’t wait to meet them as well as many more customers in the weeks, months and years to come.
– By Andrew Ward