Cannabis Q&A: Mark Waldron, CEO Vibe Bioscience
Written by Jeff Klingman
California’s legal cannabis market is the biggest in the United States and, taken by itself, one of the biggest stand-alone pot markets in the world. Given that the chill, dreamy fantasia of the state has been used to successfully sell American consumers products as varied as board shorts and raisins, it’s no surprise that aspiring companies might lean heavily into the idea of California as their ticket to success in cannabis, too. One brand hoping to make a mark in the state, and eventually the world, are Sacramento’s Vibe Bioscience, a vertically integrated pot provider who put west coast weed culture at the heart of their growth strategy.
Vibe operates dispensaries in Stockton and Sacramento with product grown in owned and operated cultivation facilities nearby. While Vibe’s surf and sand branding may not be 100% native to their Central Californian home-base, the selling of SoCal iconography is part of a wider plan is to bring Vibe to California, and California cannabis to the rest of the country. “Our ‘Vibe by California’ brand and ethos resonates with consumers who love California’s cannabis culture,” says CEO Mark Waldron.
A secured deal to become the sole dispensary vendor at Coachillin’, a massive 160-acre Cannabis Industry Business Park being built outside of Palm Springs in another big boon for the company. With a huge cannabis industry footprint, built-in cultivation facilities, and on-site lifestyle consumption club, Vibe expect the park to become “a major tourist attraction” in the coming years. “The park is intended to bring all aspects of the cannabis experience together and creates a visit that people won’t encounter anywhere else,” says Waldron.
We talked to Waldron about Vibe’s strategy to build their dispensary business outside California’s largest markets, the growth of the newly secured legal delivery business in Sacramento, and how to sell Vibe by California to cannabis consumers inside, and outside, of the Golden State.
Vibe is currently operating dispensaries in Sacramento and Stockton, with plans to expand into Redding. Was it a strategic move to begin building the business outside of the state’s largest markets?
Vibe is very much focused on these regional California markets for expansion opportunities. Our initial strategy was to find dispensaries that were cash flow positive and self-funding for additional growth; Sacramento's economy is strong, and we are seeing steady sales growth at that retail location. Vibe’s Stockton store is 1 of only 3 licensed dispensaries in the city, and we are seeing organic sales growth year over year while bringing delivery online. We are selective in our acquisition approach, and while building revenue is important, ultimately the business needs to be sustainable and have room to grow. This is what will differentiate companies in the next couple years.
How common is it for a city like Sacramento to grant delivery licenses? Is it becoming standard procedure for dispensary businesses in California, or it still a relatively new wrinkle in the industry? How long did the application and approval process take?
California was the first state to legalize home delivery state-wide. This is a major advantage for Vibe, and while these new regulations allow for statewide delivery, the rules will continue to evolve and be refined. Delivery is becoming a new standard in the industry and Vibe wants to make sure we are maximizing the customer convenience experience. Delivery options are growing in Sacramento, and while the application process is still quite variable, one can expect the application process to take anywhere from 6-9 months.
Are there specific limits on delivery in California in terms of the amounts, potency, or delivery systems of products you are allowed to deliver, or are the regulations directly comparable to what’s allowed for in-store sales?
The limitation on delivery is the quantity a driver is allowed to carry and the maximum value of cannabis in the vehicle at a single time. The order per person is the same as the storefront, limited to 1 ounce. Our delivery trucks are tracked with GPS and there is an enclosed money drop system in the van to ensure payments are secure.
Do customers tend to buy more in bulk products in-store than via delivery order, or vice-versa?
The data for customer purchases for delivery is preliminary at this point, however we are assuming both medical and recreational users will have similar purchasing profiles. We see basket sizes currently in our retail locations ranging from $60-80 per order, while we see delivery trending at $80-$100 per order.
Do you see the delivery business as a bigger growth market than dispensary services in the next 5-10 years? How much of that business is medical marijuana aimed at people with decreased mobility?
Vibe absolutely does see delivery as a large segment of the business in the future. Much like we are seeing with Amazon or other quick-serve delivery services, people will pay for convenience and that is Vibe’s fulfillment goal. Delivery for medical patients is also a very large driver for the business, as these users rely on product for medical relief and may have mobility issues. Delivery is an essential element in customer loyalty and retention, and lends itself to recreational impulse purchases.
Vibe has stated a goal to become a “multi-state operator.“ Which state markets are you targeting for future growth?
Vibe remains extremely bullish on the California market. As we explore new markets it is important to consider the regulatory environment by which the market is governed. We want to build a brand in states with high population densities, but also those that create vertical integration opportunities for cannabis companies and have a commitment to eliminating constraints on growth and expansion. States that are of potential interest to Vibe include Massachusetts, Florida, Michigan, New York, New Jersey, Washington, and Colorado. Several of these states are still working on developing a fully recreational segment to the business and our intention is to find quality opportunities that drive revenue and cash flow.
Do you anticipate tailoring your brand identity to market specifically to each individual state, or do you think that “Vibe by California” could potentially be a brand that resonates outside of California?
“Vibe by California” evokes a unique lifestyle of fun, recreation, nature and cannabis culture— these are consumer wants that have a strong tie to California and its renowned culture and playfulness. Vibe has found this resonates strongly beyond California, and our expansion into other states will emphasize “Vibe by California” in our store designs and product branding.
The Vibe management team is made of executives that are primarily coming to the cannabis industry from other industries (retail and corporate brands, energy, finance, real estate, etc.). What qualities does Vibe consider vital, when recruiting team members from outside industries?
Our diverse backgrounds are a significant advantage of the Vibe team, as every new asset expansion or acquisition requires a dimension of retail, branding, finance and real estate expertise. From a corporate culture and ethos perspective, our recruiting team looks for people with passion, entrepreneurial spirit, extreme enthusiasm for cannabis, and a devotion to the consumer.
In your view, which factors will define the next 5 years of the cannabis industry in the United States?
Perhaps the largest factor will be the mainstreaming of cannabis acceptance and use throughout the country. This will be greatly influenced by consumers’ understanding of how cannabis could help improve their quality of life both recreationally and medicinally. In addition, as the federal government enacts laws and regulations permitting a federally legal cannabis industry, we’ll see accelerated growth in the cannabis industry driven by consumer demand and more robust capital markets.