Fresh Karma: Driving Growth with AI in a Competitive Cannabis Market

The Challenge: Navigating Missouri's Highly Competitive Cannabis Market

Fresh Karma is Kansas City's largest dispensary, operating in a rapidly evolving and highly competitive cannabis market. Since Missouri transitioned to a recreational cannabis market in 2023, the landscape has become increasingly crowded with numerous dispensaries, leading to significant pricing pressure and a need for differentiation. Additionally, the regulatory environment in Missouri is stringent, adding complexity to operations.

Amidst this competition, Fresh Karma needed to stand out, attract new customers, and retain their existing customer base in an environment where customer loyalty programs and diverse product offerings are common. They aimed to leverage technology to enhance customer engagement and drive sales in a market where differentiation is key to survival.

The Solution: Engaging Consumers with Fresh Karma’s Weed Wizard

In 2023, Fresh Karma onboarded Terpli’s AI Budtender, branding it as the "Weed Wizard." This tool was integrated seamlessly into their website as a white-labeled, fully branded widget. The Weed Wizard provided personalized product recommendations, educating customers while guiding their purchasing decisions.

To maximize the tool’s impact, Fresh Karma implemented A/B Testing for the Weed Wizard’s welcome messages in January 2024. This strategy significantly increased tool engagement. How significant? Enabling A/B Testing resulted in triple engagement on average which in turn drove an influx of online orders. In mid-June 2024, Fresh Karma introduced pop-up banners, which led to doubling results in both traffic and tool usage, with daily engagement rates rivaling those seen during 4/20!

The branding of the AI Budtender as the "Weed Wizard" was not only engaging but also fun for customers, contributing to its widespread acceptance and popularity.

The Results: Remarkable Engagement, Sales Growth, and Return on Investment

Over a six-month period, Fresh Karma achieved extraordinary results with the Weed Wizard tool. Customer engagement was robust, with a 19% year-to-date increase in Average Order Value (AOV). The introduction of pop-up banners in June led to a significant spike in user interaction and POS data reconciliation, further amplifying the tool's effectiveness.

In terms of financial performance, the Weed Wizard delivered outstanding results. With an investment totaling in the mid-four-figures, Fresh Karma realized an impressive 23x ROI. This impressive ROI not only reinforced Fresh Karma’s position as a leading dispensary in Kansas City but also demonstrated the power of integrating innovative technology into retail operations, driving both customer engagement and substantial financial growth.

Future Horizons: Expanding on Success in a Growing Market

Fresh Karma is poised to continue leveraging technology to maintain its competitive edge. The success of the Weed Wizard has paved the way for future innovations, potentially including further personalization tools and expanded customer loyalty programs.

As Missouri’s cannabis market continues to grow, Fresh Karma plans to deepen its customer engagement strategies, focusing on increasing brand loyalty and expanding its product offerings. These efforts will ensure that Fresh Karma remains a dominant player in an increasingly crowded market.