As more brands enter the marijuana merchandise market, competitors for retail shelf space in key adult-use markets such as Colorado and Washington state is intensifying.
While the variety of new brands – and, consequently, the quantity of latest merchandise – continues to rise, progress within the variety of retail shops has not stored tempo, in response to the 2020 version of the Marijuana Business Factbook.
This has fostered a pay-to-play mentality amongst marijuana retailers, with many now charging brands a charge to occupy shelf space.
Known as slotting charges, the follow requires brands to pay anyplace from $500 to $15,000 a month for premium space on cannabis retailers’ cabinets.
The use of slotting feels coincided with the rise in reputation of vape merchandise, which was a main contributor to the retail shelf space crunch.
The variety of brands within the vape class rose sharply from 2017 to 2019, growing 49% in Colorado and 38% in Washington state.
Though the 2019 vaping well being disaster dealt the class a blow, vape gross sales numbers are largely again to regular.
Slotting charges, in the meantime, are comparatively widespread within the conventional retail surroundings, rising within the 1980s as a approach for retailers to prioritize shelf space for top-performing objects amid a surge within the variety of merchandise producers had been bringing to market.
Some argue slotting charges damage smaller brands that may’t afford the extra expense.
But it’s one more instance of the cannabis trade embracing established practices discovered within the mainstream shopper packaged items space and is probably going right here to remain.
Eli McVey could be reached at [email protected]