Power Players

Power Players: Headset’s Jocelyn Sheltraw

By Alex Halperin Mar 30, 2020
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Alex Halperin is the founder, editor and publisher of WeedWeek. Before he started covering marijuana legalization in 2014 he reported on topics such as fracking, health care, technology a...
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Alex Halperin is the founder, editor and publisher of WeedWeek. Before he started covering marijuana legalization in 2014 he reported on topics such as fracking, health care, technology and finance. His work has appeared in The Guardian, Slate, Fast Company, Quartz, the Washington Post, Mother Jones, The New Yorker and many other publications. His first book, The Cannabis Dictionary, was published in March. He lives in Los Angeles.
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As head of strategy at data firm Headset, Jocelyn Sheltraw can see changes in consumption patterns faster than just about anyone. And that’s never been more important than right now.

We talked about why women are hoarding more weed, why this may be the moment for cannabis-infused beverages and whether state supply chains can hold up.

This interview has been edited for length and clarity.

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WeedWeek:

First, can you give us a general idea of Headset’s business, what you do and how you make money?

Jocelyn Sheltraw:

Let me give you an overview of our ecosystem, as we call it. You can think of Headset as a data company that is providing software for different parts of the industry. We do this is through three different technology platforms.

JS:

The first piece of our ecosystem is for retailers. We provide them with a platform they use on top of their point of sale system. Headset is connected via an API connection to 24 different point of sale systems throughout North America. The reason that a retailer would want to use this platform, is it ingests all of their point of sale data in real time and it turns it into actionable reports on things like inventory levels, vendors and staff performance.  And Headset gets access to all that point of sale data.

JS:

The second piece of software that we provide is for brands. This product is called Bridge, and what it does is it allows the retailer to share the real time sell through rates for their brands so their sales teams know what accounts to call on. They can plan based off market demand. It connects the retailer and the brand to ensure the retailer doesn’t have an out-of-stock event.

JS:

The third platform is called Insight. It’s probably what you see most in the media, because this is how we’re reporting on all these analytics and all these trends that we’re seeing. This is where any producer can log in see in real time what is trending in each of the markets Headset reports on: California, Colorado, Washington, Nevada, Alberta, Canada, and then British Columbia. We’re getting very close to turning on Oregon and then we’re getting close to turning on a bunch of markets on the east coast.

JS:

The retail platform is free to retailers. That is a value exchange. They’re contributing their data, we give them this platform for free. We make our money through our Insight platform, selling all of the advanced data to the market, as well as the Bridge platform.

WW:

What are you seeing in terms of how consumption patterns are changing with the crisis?

JS:

We have been monitoring this very closely and publish some of our findings on a blog.  You can log in every day and see some of the changes that are happening. On March 13th when [shelter in place orders] began to become a reality, sales started to explode. Retailers were having sales days that were comparable to 4/20. It happened very quickly.

JS:

Depending on when the shelter in place went to effect, we would sometimes see these big spikes and then it would even out. For example, Colorado deemed cannabis essential. But Denver didn’t and then it  reversed the decision about six hours later. During that time period people were rushing out to make sure that they could get all those products. And then once the state had gone into that shelter in place, we started to see some of the after effects, it started to even out.

JS:

Beverages and edibles were seeing the strongest sales growth. One of the things that we’ve seen from some of our retail partners is [consumers seem less inclined to use] inhalables. The strongest growth was in the, the beverage and edibles categories, probably because you don’t have to touch your face when you’re consuming them, they’re not shareable items.

WW:

Do you really think that’s why?

JS:

This is one of the thoughts from our analytics team, because you don’t have to touch the product. You could open the package and pop it in. Some retailers are also having their sales staff suggest perhaps not consuming as many inhalables because that’s going to be more harsh on your lungs, potentially. [Editor’s note: Some public health authorities have suggested smokers and vape users are at greater risk of suffering a severe illness from the coronavirus.)

WW:

That makes sense.

JS:

We’ve noticed a couple other interesting things. Our team has been looking at what the competitive landscape looks like. That means, ‘What are the portion of sales in a market that go to the top 10 brands?’

We’re seeing that a lot of sales are going to the bigger brands. This is something for brands to think about, really getting out there and telling your story. Consumers clearly care about who they trust right now.

JS:

We also saw some differences in gender. On the weekend of March 13th both genders had significant increases in spending, but women more than doubled the sales growth of men. Probably the reason is that men already had products stocked up; women were less likely to have more product on hand and they felt a sense of urgency.

WW:

Do you have any thoughts on whether the spike represents a hoarding instinct or shifts in consumption patterns, and perhaps more people consuming cannabis?

Jocelyn:

We don’t have enough data on this yet, but will be keeping a close eye on it.

WW:

What else are you watching for?

JS:

We’re going to be watching for shifts in patterns. Are consumers choosing different types of products? And which brands are consumers leaning towards? Again, one of the really interesting things to look at is brand concentration.

For example, in California an [inaudible] well-known brand saw sales for their gummies jump 150% compared to a normal day. Same thing with Lagunitas Hi-Fi Hops, which for me is really interesting to watch. Beverages are one of those really hot topics in cannabis where people are either really excited about the potential, or very bearish.

JS:

In traditional =consumer packaged goods industries, we see a lot of times that when we’re analyzing consumer patterns in baskets: for example, people might buy shampoo and conditioner together. Now we’re starting to see this pairing of cannabis beverages and pre-rolls in that same basket.

JS:

This leads us to ask if the beverage and pre-roll combination is something people are starting to move towards. We’re also looking at the differences in demographic purchasing behaviors. We’ve certainly seen a spike in millennials purchasing.

WW:

What can you deduce from your data about the situation for producers, especially in a state like California, where business conditions were already difficult?

JS:

One of the things that I’m really thinking about is, ‘What does the supply chain look like? Do we continue to have enough supply in stores? Is there going to be any shortages on products?’ I want to look at what those products that are going to be most affected.

Pre-Covid 19, we saw that retailers had about 4.7 weeks of inventory on hand, and now we’re seeing about 3.3 weeks. Nevada is really interesting, because with its tourism economy, they normally have more inventory on hand and now they have even more than that, about nine weeks, because they lost 80% of their foot traffic essentially overnight.

WW:

From what you’re seeing, do any state supply chains look to be in trouble?

JS:

Not that I’m seeing yet. Massachusetts has not deemed [REC] essential, so there potentially could be some supply chain impacts there.

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Alex Halperin
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