Marijuana Business Magazine November-December 2019

Partnership PIONEERS Isodiol and Asian-American Trade Associations Channel CASE STUDY T hink the marijuana retail landscape is diffuse and hard to navigate? The industry looks positively quaint compared to the monster footprint of convenience stores and gas stations. That’s why Canadian CBD manufacturer Isodiol International partnered with a trade association to help penetrate a sales channel with retail locations in nearly every U.S. neighborhood. But that channel has an extensive set of owners and distribution arrangements. Isodiol inked an agreement with the Asian- American Trade Associations Channel (AATAC), a network of independently owned gas stations, convenience stores and corner markets that boasts roughly 90,000 members. That’s compared with the 2,387 or so retail marijuana stores across the United States, according to Hemp Industry Daily estimates. Isodiol is paying the group an undisclosed amount to make it easier to connect with its members. In return, Isodiol hopes to see its CBD topical products on more shelves by the end of 2019 than it ever could have hoped for. Why pay for convenience-store connections? Volume, said Troy Nihart, Isodiol’s chief operating officer. “Just the sheer number of store locations they have access to for distribution points” made the deal too big to ignore, he told Marijuana Business Magazine. HOW IT CAME TO BE Isodiol’s convenience-store play started before the U.S. Congress legalized hemp products in 2018. A broker introduced Isodiol to a contact with the convenience-store association, which connects independent retailers with new products to carry. The association will not only promote Isodiol products to its members but can assist with in- store promotions and display. “They already have the distribution points through the association,” Nihart explained. Isodiol hasn’t said how much it cost to get the group to ease distribution, and AATAC representatives didn’t respond to requests to explain its business model. The partnership gives Isodiol unprecedented exposure. Convenience stores and gas stations average 650 customers per day, compared with about 169 customers a day in a recreational cannabis dispensary, according to estimates from the National Association of Convenience Stores and Marijuana Business Daily . DEALINGWITH CHALLENGES After full hemp legalization, Isodiol decided to slow down the convenience-store rollout because it saw states such as Indiana and Texas pass laws setting up additional requirements for retailing CBD. “We were simply slowing down to make sure that the state guidelines and everything were set in place,” Nihart said. “We wanted packaging and products and everything to be in line with what state guidelines were before we started sending products to distribution centers and then possibly having to recall the product.” Getting CBD topicals out of marijuana retail stores and smoke shops and into the conve- nience-store channel required more than just Canadian CBD company Isodiol taps convenience-store group to win shelf space in fast-moving but diffuse sales channel Shelf By Kristen Nichols SHUFFLE 84 Marijuana Business Magazine | November-December 2019