3 Questions With Mosaic’s Chief Strategy Officer Anibal Palma
Anibal Palma, Mosaic’s Chief Strategy Officer, comes to the company with extensive financial and leadership experience within the cannabis industry and broader investment sector–from cultivation to technology and renewable energy companies.
Today at Mosaic, he drives the company’s the corporate vision and strategic planning. Anibal also develops partnerships that strengthen its position as the go-to, all-in-one eCommerce and loyalty solution for both mom-and-pop dispensaries and large multi-state retail operators.
Here, we chat with Anibal about why he joined the Mosaic team, some of the biggest challenges and opportunities dispensaries face today, as well as what he enjoys most about working in the cannabis industry.
Q: What drew you to Mosaic as a company?
Anibal: The Mosaic application generates a lot of synergies, not only for the dispensary (our customer) but also for the end user (the dispensary’s customer).
Dispensaries utilizing Mosaic’s platform are already providing an excellent experience for their customers. Once we finalize our ecosystem, customers will be able to do everything from their phone: browse, order, request delivery, pay digitally, engage in gamification campaigns such as menu challenges, bundle offers, “double-point days”, as well as earn incremental points with each purchase. All these elements create a stronger customer-dispensary relationship.
Through personalized marketing campaigns and engagements, dispensaries can also harness the knowledge of their customers’ purchase preferences to create upsell and cross-sell opportunities.
That’s because customers are more likely to react to personalized offers compared to random offers. From the retailer’s point of view, this is one of the most important things because it helps with customer retention.
Due to the federal illegal status of cannabis, the industry is subject to stringent tax regulations, including the Internal Revenue Code Section 280E, which results in effective tax rates of more than 70% for plant-touching businesses. That means that dispensaries’ net income is extremely thin.
The bulk of dispensaries today are operating with a one-digit net income margin. So losing a customer becomes extremely expensive. Trying to recover that customer becomes more expensive. If you lose 10% of your customers, that could be the difference between staying open or going out of business completely.
If dispensaries are provided with the tools to retain their customers by making them “stickier”, they will not only be reducing the cost of acquiring customers, but they will also increase the length of the customer’s relationship. This will result in greater revenue that a dispensary can expect to generate from their customers throughout the entire relationship and give them a better chance of making it in today’s challenging economic environment.
You can also create new monetization opportunities by offering brands the ability to engage in targeted marketing. Assume you have a new vape brand, whose target audience is women aged 25-44. Together you can launch a campaign among your dispensary’s loyalty members, segmented by age, zip code, gender, etc., completely bespoke to the targeted market segment.
Brands will then have a bigger return on investment with tangible metrics to measure sales conversions.
You can also pitch the brand by saying, “You know what, this particular product category is building up too much inventory on our end. Let’s run a campaign to move that inventory because it’s costing you money, and it’s costing me money.” This could generate an incremental revenue stream for the dispensary by charging a percentage of the sales generated through the targeted campaign.
As you can see, when you start examining the different layers of opportunities, you can continue providing revenue streams to your partners and to your partner’s customers. It’s endless, and it all improves our customers’ experiences.
Q: What do you think are the biggest challenges dispensary operators face right now?
Anibal: Besides 280E, which we talked about–the other major challenge for retailers is the ability to differentiate themselves from the competition.
There are certain states where the number of licenses is unlimited. You apply for a license and boom, you open your store. Just like in any retail business, the most difficult thing is how you compete with your neighbor. In this particular industry, that is even more complicated because you cannot do traditional advertising, and this puts a big limit on your ability to create this differentiating factor.
That is one of the biggest challenges that I think we are solving with Mosaic because we offer our customers the opportunity to stand out with a stellar user experience and deeper and direct customer connections.
Q: What do you enjoy most about working in this industry?
Anibal: The beauty of this industry is that there are opportunities everywhere. If you’re able to think outside the box a little bit, you can come up with new solutions that will ease the pain points for dispensaries and for their customers purchasing and consuming cannabis.
What’s important to consider is how sustainable your particular solution will be over time. And when I say sustainable, I mean: Will it pass the test of the industry’s liberalization or legalization? It doesn’t make too much sense to invest in something that will only have a two- to three-year runway. That’s one of the things that motivates me and helps me put my financial skill set to use: making sure that all the solutions and tools that we are developing will be “sustainable”.
Cannabis is a little bit of a sandbox in the sense that you have very restricted boundaries, but within those boundaries you are competing with other newcomers just like you. The big boys don’t want to play in the sandbox yet, so that gives you a lot of freedom to create whatever you want to create with limited competition. It’s an exciting opportunity to take our narrowed guardrails and come up with good solutions.
To learn more about Mosaic’s all-in-one eCommerce and loyalty solution for cannabis dispensaries, book a free demo with our team here.
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