Tweed took Canada’s medical marijuana industry by storm last week when it announced that it will be opening an online store where Tweed, Mettrum, and Bedrocan customers can directly buy from all three brands in a one-stop shopping experience. While a Tweed press release stipulates that Tweed Main Street will only sell products from Canopy’s three licensed producers, an email sent to Mettrum patients notes that the store hopes to add “a few other licensed producers over time.”
In my view, Tweed Main Street is going to be big for a number of reasons.
For one, licensed producers across the spectrum will face a lower barrier to entry in getting their products to Canada’s medical cannabis patient market. These days, in order to get their product to market, LPs have to invest significantly in call centre infrastructure, patient acquisition strategies, and other costs in obtaining, retaining and selling to a patient base. Sure, wholesaling already exists: Alberta-based Aurora Cannabis re-sells wholesale cannabis to its patients through its Aurora Certified program (and it was recently revealed that one of its wholesalers was Organigram). Still, the sheer volume of patients who are concentrated in the Tweed, Mettrum, and Bedrocan membership numbers means that independent licensed producers will now have a new level of potential wholesaling with Tweed Main Street.
In addition, unlike current wholesaling partnerships where the wholesaler’s brand is hidden from the consumer (at least when sold through Aurora’s Certified program), Tweed Main Street appears to aim to be fully transparent. Licensed producers that sell cannabis through Tweed Main Street will have a dedicated LP page where their product and story is put out for the public to interact with. For licensed producer wholesalers, this reduces the cost needed to establish brand equity, while enabling them to access thousands upon thousands of patients.
The cost savings that these LP wholesalers will begin to retain can be re-invested into extensive safety testing of their cannabis. With recent recalls from multiple LPs related to unapproved pesticide use and mislabelling of THC percentages, extensive product testing is becoming very important.
Will other Licensed Producers follow suit and create their own stores to rival Tweed Main Street? Canopy is by far the largest holder of patient memberships through its three LP brands. But in my view Aphria might be poised to create a similar online marketplace of their own. With the imminent release of Tokyo Smoke products and investment in ventures across Canada and the US, Aphria would be well-positioned to open its own branded marketplace platform.
For licensed producers who have indicated their intention to wholesale their cannabis, including The Green Organic Dutchman and Supreme Pharma’s 7 Acres, Tweed’s Main Street is sure to be welcome news. The websites for Tweed, Mettrum, and Bedrocan will be taken offline for approximately one week starting on April 7th, with the new amalgamated Tweed Main Street experience set to launch on April 13th 2017.
Featured image via Tweed Main Street.