UNION GAP — Once a customer enters Mill Creek Ste. A, a new marijuana retail outlet in town, it isn’t long before they’re greeted by a clerk.
The clerk will ask if this is their first visit to the store, followed by questions to discern what the customer is looking for.
The one-on-one consultation at Mill Creek Ste. A, a retail pot store behind Mill Creek Natural Foods, is not unlike a boutique clothing store, which is exactly what owner Mary Van de Graaf wants.
“I want to keep that small, intimate shopping experience,” she said.
Yakima Valley marijuana retailers have been fine-tuning their in-store experiences and marketing strategies in hopes of capturing and retaining customers early in the sure-to-grow market for the now-legal recreational drug.
Building a solid customer base is challenging for any new retailer, but these retailers have the additional hurdle of complying with a number of rules under Initiative 502 — which paved the way for the legal sale of recreational marijuana — that greatly limit how they can advertise and market to potential customers.
But Todd Ellison, CEO of Weed Media, a Colorado-based company that has provided marketing and advertising services to marijuana businesses, including those in Washington, said it is important for retailers to figure out how to build a consistent strategy within the rules.
Retailers also face a stigma about smoking marijuana, he said, so establishing a reputation as a business on the up-and-up is essential.
“We have to make ourselves look good to the rest of the world or they won’t take us seriously,” Ellison said.
Among the advertising rules is a prohibition on anything that would appeal to children, such as cartoon characters, as well as placement of ads where anyone under 21 might see them.
What that means exactly can be open for interpretation, which the state Liquor Control Board acknowledges.
“There is some ambiguity,” said Brian Smith, Liquor Control Board spokesman.
As a result, the board plans to release a document that tackles frequently asked questions on marketing, including sponsorship, in-store promotions and selling store-brand items.
Smith said the document may not answer every question retailers have but it is a first step.
“We can’t be the ultimate authority on every possible question, but we’re trying to provide guidance for many of our licensees who are trying to follow the rules,” he said.
For now, local retailers are doing their best to craft marketing strategies within the rules.
For Van de Graaf, that means limiting advertising to its website and Facebook page. She is putting more stock in developing an in-store experience that she hopes will drive word-of-mouth.
Both of her employees are knowledgeable about the different characteristics of the marijuana products. The small space at 4315 Main St. is intimate and discreet to help customers feel at ease.
The store gets some walk-in traffic from customers who are shopping at Mill Creek Natural Foods, which is housed in the same building. But Van de Graaf, who also owns the natural foods store, is careful not to commingle advertising between the two.
Still, to Van de Graaf’s surprise, the two customer bases are similar.
“You wouldn’t know the difference,” she said, noting that customers older than 40 have made up at least half of her customers at the marijuana store so far.
‘People pay a premium’
Altitude, a retail marijuana store in Prosser, is seeing a similar customer base.
“The people who come into the store are really the same people who come into the wineries,” co-owner Tim Thompson said. “They have a great amount of disposable income.”
At the center of Altitude’s in-store experience is what Thompson calls a “cannabis coach,” an employee who will sit with the customer and assess his or her previous experience with marijuana as well as which products will best work for that individual.
Due to the numerous and heavy taxes retailers have to pay, such as a 25 percent state excise tax and local and state sales taxes, retailers have to compete on service rather than price, Thompson said. “We’re basically trying to give them a quality product with quality service, and people pay a premium for that.”
Altitude, with the guidance of lawyers, has done some outside advertising, including radio ads.
But the laws are murky enough that a retailer could inadvertantly catch the attention of regulators, so it’s necessary to proceed with considerable caution, Thompson said.
Supply coming around
Another challenge in initial marketing efforts is having product to promote. In the first few weeks, suppliers could not keep up with retailer demand, resulting in some stores closing temporarily or reducing hours.
After one week, Mill Creek Ste. A had to close for 10 days for lack of supply.
But now Van de Graaf has established relationships with three main suppliers and several smaller ones, which should allow her store to remain open.
Station 420, another marijuana retailer in Union Gap, also had to close for several days.
Altitude in Prosser stayed open, but had to cut operations to four hours a day until earlier this month. The store is now open from 11 a.m. to 7 p.m. daily.
And the store will soon start stocking a key item that many customers have asked for — edibles, like chocolates laced with oils infused from a marijuana plant.
It’s an item that Thompson, the owner, believes can be a key offering. “They have the potential to be half our income.”
While marketing is important, retailers have to make sure their product offerings are up to par, said Ellison of Weed Media. The idea that legal marijuana and other related products will sell themselves is a myth, he said.
There is a base of connoisseurs who have come to expect a certain quality of marijuana. “Once they find (a retailer) that has consistent product, quality product all the time, they will stick to it,” he said.