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Known as slotting fees, the practice requires brands to pay anywhere from $500 to $15,000 a month for premium space on cannabis retailers’ shelves.
This story originally appeared on MJBizDaily
As more brands enter the marijuana products marketplace, competition for retail shelf space in key adult-use markets such as Colorado and Washington state is intensifying.
While the number of new brands – and, consequently, the amount of new products – continues to rise, growth in the number of retail stores has not kept pace, according to the 2020 edition of the Marijuana Business Factbook.
This has fostered a pay-to-play mentality among marijuana retailers, with some now charging brands a fee to occupy shelf space in states such as California and Nevada.
Known as slotting fees, the practice requires brands to pay anywhere from $500 to $15,000 a month for premium space on cannabis retailers’ shelves.
The use of slotting feels coincided with the rise in popularity of vape products, which was a major contributor to the retail shelf space crunch.
The number of brands in the vape category rose sharply from 2017 to 2019, increasing 49% in Colorado and 38% in Washington state. (For this story, Colorado and Washington are used as examples of brand-versus-outlet growth – and not necessarily as states where slotting fees come into play.)
Published: July 08, 2020
The post As More Brands Enter Cannabis, Retailers Charge ‘Pay-to-Play’ Fees For Shelf Space appeared first on L.A. Cannabis News.
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