Last week, Bank of America confirmed what many people feared may be looming: a recession. Their forecast for a mild recession by Q4 2022 may bring about fears of the pandemic-induced market crash of March 2020 or the housing bubble bust in 2008, but they were clear that a recession in 2022 will not be anywhere near that magnitude. They instead laid the blame at the feet of inflation's 40-year high and ongoing supply chain issues, both of which will improve over time.
Nonetheless, this will be one of the most significant economic hurdles the cannabis industry as a whole has faced since the 2018 Farm Bill legalized CBD. Cannabis companies operating in nearly every sector of the market will be in uncharted territory.
We sat down for an honest conversation with Bart Schaneman, an editor with MJBizDaily to get additional perspective on an article he wrote about marijuana and recession. Bart offered his expert insight into how some businesses are relying on loyal customers to see them through, why transparency with the press is important during good and not-so-good economic times and elaborated on why this economic downturn is the first of its kind for cannabis.
You can listen to the whole 30-minute conversation on the Move the Stairs™ podcast with Bart here. Or, get right to it with Bart's top three Move the Stairs™ takeaways:
Move the Stairs Moment 1: When the economy is down, customer loyalty is your best friend
When Bart was researching for his article, he pointed out a trend that he noticed. Marijuana businesses that offered loyalty programs before the Covid pandemic continued to see local customers in those programs support their business throughout the pandemic. Do you have an established program aimed to reward your returning customers? You should!
Move the Stairs Moment 2: Don't be afraid to tell your story, even if it hurts
The cannabis field is competitive but if your business is hurting because of an economic downturn, chances are your competitors are too. Telling your story even when times are tough can benefit both your business and the industry as a whole. As Bart said, "A rising tide lifts all boats."
Move the Stairs Moment 3: This downturn will hurt, it's not a Covid-19 (2020) scenario
In 2020, people couldn't or wouldn't travel for a period of time due to Covid-19. Cannabis dispensaries were deemed essential businesses and stayed open. Some people turned to those products to manage stress, anxiety, insomnia, and other issues. Not in 2022. Bart says this time is different and brands that have worked to build trust with their consumers will likely be okay because customers will continue to shop at their preferred dispensary but aren't likely to venture far from the familiar.
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