Buoyed by an energetic consumer base and legislative developments, the CBD market is currently expanding at an unprecedented pace. At current growth rates, experts estimate that sales could top $ 29 billion by 2025. The 2018 Farm Bill which legalized hemp products containing below 0.3 % THC content (by dry weight) has allowed for an explosion of demand for CBD products of various formats and extracts. Today, informed customers can freely purchase gummies, oils, tinctures, flower and other forms of CBD. Although issues still exist with regards to regulation and product quality, consumer demand is gradually facilitating the emergence of this nascent sector. As part of the means of delivering CBD benefits to the buying public, firms have adopted the medium of CBD vending machines. Hitherto known to carry snack and drink refreshments, vending machines are being primed as important stations for the sale of CBD. Firms have identified that there is a potential for the use of cannabis product vending machines as a tool of market expansion in delivering hemp CBD to a wider audience. Of particular importance is the low overheads associated with operating these CBD vending machines. As a factor, such a lean cost profile coupled with the ability to place the machines across various locations, without accumulating equivalent manpower obligations, portends positively for the future utility of CBD vending machines in the servicing of consumer demand in the CBD space. In many ways such machines stand in as veritable dispensaries of CBD, albeit as automated units.
The changing landscape of the market has necessitated the need for innovation in delivering the benefits of CBD to the final user. Accordingly, Chow420, a Philadelphia-based CBD retail solutions firm, has taken on the challenge of putting together a novel package. The company sells in-house and third party brands, across different forms of CBD, on its eCommerce website and newly launched CBD vending machines, also known as ChowPods.
Available in commercial mall spaces at different locations in the northeast, the ChowPods allow for a convenient full-service shopping experience. There are currently 13 operational ChowPods, across 4 states ( NJ, VA, PA & MD), including the premier King of Prussia mall owned and managed by the Simon Property Group. Users can use the store locator button on the ChowPods platform to find machines in their vicinity.
In detail below are the current Chow420 locations.
Chow420 New Jersey locations:
Chow420 Pennsylvania locations:
Chow420 Maryland locations:
Chow420 Virginia locations:
Chow420 New York locations:
An imposing, compact build, these machines come in either all-white or deep purple skins. The ChowPod vending machines feature a 55 inch LED touchscreen for product graphic and information display. This feature allows customers to easily peruse inventory and make selections. Importantly, all products in the machines are covered by the Chow420 blockchain-powered “Know what you buy” security protocol that already protects products on the online platform. All products carried in the machines are vetted. The ChowPods have a holding capacity of over 400 products distributed over 50 shelf compartments. An elevator dispensary mechanism allows for safe handling of fragile products. The machines are equipped with a cooling refrigeration function to keep products at controlled temperatures and a cashless payment service. Chow420 has prioritized the automation of the machine to ensure that the entire process can be completed in a contactless fashion. Toward perceived social responsibility obligations, the company has endeavored to integrate the hygiene demands of our present COVID context into its operations by enforcing a completely contactless purchase process for customers.
Customers can navigate the touch screen of the ChowPod just like that of any smart device and select their desired products. Each selection yields a product-specific page that details cannabinoid content, item description, use-guideline and overall ingredient information. This page allows customers to verify information about product representation and decide if they are still willing to make the purchase. As a guarantee, Chow420 assures all users of its platforms that any listed product is verified against lab results which have been checked for compliance and conformity with content labeling. What customers gain from the ChowPods is a convenience and level of transparency not to be found in the conventional cannabis dispensaries that have persisted near them. The Chow420 project is to bring ease to the buying of CBD products for people, far and wide.
According to FDA advice, certain products, namely smokable flower and vaping oils, within the CBD space do require age verification due to age based restrictions. Towards compliance, ChowPods are equipped with an AI-driven biometric technology to satisfy this requirement. The age verification tool, by software company Civic, is used to automate ID checks in order to facilitate the process of user authorization for restricted products.
Interestingly, Chow420 also implements the operation of what the company tags the ChowPod RMC (Remote Monitoring and Communication) solution to complement an otherwise automation-heavy process. This is because, while Chow420 recognizes the utility and ease of automated services, the company also believes in the importance of personalized customer service, not just as a complementary addition to the ChowPod customer experience but as an indispensable part of it. Therefore, customers can be actively assisted by a remote agent at any stage of the purchase process and for any reason pertaining to the operation of the ChowPod vending machines.
The ChowPod CBD vending machines are designed to meet the immediate needs of customers. The machines carry a diverse range of CBD products across various formats. Customers can easily find CBD gummies, oils, tinctures, flower and capsules on ChowPods as they can online or at stores. These cannabis vending machines bring the benefit of accessibility to customers seeking a quick and functional shopping experience. The ChowPod offer includes another important point, the issue of trust. A 2017 PennMedicine study detailed that over 70% of products in the CBD market are mislabeled. This misrepresentation problem and the lack of clarity that prevails in the FDA regulation of CBD production and marketing, makes the CBD space a tumultuous one for customers. So the team at Chow420 devised a system to deal with the issue. Essentially, the solution is contingent on the recording of lab tests results on an immutable blockchain platform. By doing so, the Chow420 offers a foolproof security wall that ensures that all products listed on the site are backed by verified test results which can be accessed and viewed by any interested parties on an immutable platform.
Onboarding this solution to the ChowPods means that the assurance of safety holds for the products sold on the ChowPod machine network and allows Chow420 to utilize the ChowPod solution as a scalable base for the delivery of vetted CBD products to the wider market .
The ChowPods function similarly to a cell tower in the Chow420 business picture. As fully registered stores on Google and other directories, the machines are able to match queries for proximate CBD sales points. Prospective customer queries of “cbd dispensary near me” and others denoting similar requests for “ cbd stores, cannabis dispensaries” in local geographies where ChowPods are present are equally matched to our store listings by the Google algorithm. Consumers in the areas where the machines are located, are able to take advantage of both the Pods and the website, during after-hours, which offers 24-48 hour expedited delivery to fulfill their CBD needs. Therefore, the machines act as towers that broadcast relevance of the Chow420 brand across areas where they have been launched. This allows for a two pronged approach to marketing and revenue generation. In a sense, the ChowPods CBD dispensaries are analogous to cell towers in telecommunications. However, in this case, it is brand relevance that is being broadcasted.
Granted, the vending machine approach to CBD retail is becoming popular. However, several challenges remain. Foremost of the bunch is marketing. If you look closely, there have been reports of several companies going under and closing down. Optimistic forecasts notwithstanding, cannabis is a difficult business for new entrants. Firstly, it is almost impossible to freely market on the internet without constantly having to deal with administrative blocks that alternate almost daily. Offline marketing, on the other hand, can be a contemplative effort when considering the risks. Companies have to be able to effectively measure the impact of their investments in communications and meet short-term goals. The market is definitely growing, but entry and positioning is a process that should be carefully considered and designed by any prospective entrants. Without the proper visibility and communication strategy, companies can spend thousands of dollars to create a neat and qualitatively enticing offering that might find it hard to gain traction with its target audience.
After a slow start, the ChowPods seem to be picking up in traffic terms. The Chow420 team is adamant on its strategy that emphasizes the construction of a brand image that mirrors its mission and vision for the market. A vital feature of the company’s plans involves marketing the venture as a legitimate store first. One that delivers on its promise. “It is important that customers understand that this is a retail operation like any other. Our take on cannabis is not to be edgy. So when you look us up and see Google reviews, for example, you understand that we are working to serve you first. It’s just that, what we sell is CBD,” were the words of David Obasiolu, the CEO of Chow420. A rather hands-on entrepreneur.
The Cell tower model pursued by the company has yielded 100% growth in revenues (month-on-month) going from February to April. This impressive trend shows no sign of stopping as the company continues to double down on its strategy by doubling its current capacity. The expansion of ChowPod presence indicates an expected increase in relevance and market coverage. Hence, more revenue forecasted for the near future.
In conclusion, vending machines offer a potentially profitable channel for CBD retail. But it is left to companies to equip and define how this channel will constitute a veritable point of sale for their products and services. Companies that figure this out are most likely going to turn out to be profitable. It is towards this end that Chow420 aims to succeed in its mission; bringing safe and effective CBD to customers the right way.