AmazonHerbal Vaporizer Hardware and Ancillary Products
With respect to the sale of herbal vaporizer hardware and ancillary products, the Company faces competition from other online e-tailers of vaporizers and ancillary devices, as well as other platforms, such as Amazon, that now permit the sale of such products via third party sellers. Further, the market is experiencing a process of commoditization resulting in margins being further eroded. The Company identified these trends early on, and took action to protect itself from disruption by adding the newly opened distribution channels, such as Amazon, to increase the total addressable market for these products. In order to maintain its market position, the Company relies on strong organic search results, web infrastructure and e-mail distribution lists in certain geographies, such as Australia, where Australian Vaporizers is a market leader. In Europe, the Company consolidated its digital platforms to reduce costs. The Company was also one of the first companies to launch herbal vaporizer hardware and ancillary product sales on Amazon, where the Company continues to see month-to-month sales growth. In Canada, the Company leveraged its market position in the Medical Channel and has commenced the consolidation of the Company’s herbal vaporizer hardware and ancillary product e-commerce sites, into www.Cannmart.com, to offer a one-stop-shopping experience to its customers. Globally, a key part of the Company’s competitive advantage is the investment it has made to date in its technology platform, and leveraging modern marketing methodologies. The marketing capabilities deliver a cost-effective customer acquisition mechanism, which allows the Company to identify and attract the right demographics to its websites. Additionally, the Company is able to deliver a fast, consistent and highquality user experience, that allows it to convert visitors to buying customers at a higher rate, and importantly retain those customers, increasing customer lifetime value. In addition to the above, in Canada the Company leverages its telemedicine platform, NamasteMD, to offer medical customers a holistic end to end experience, from obtaining a medical document through purchasing cannabis and accessories. Having such a degree of control over the customer experience enables the Company to reduce friction, improve the customer experience, and retain customers for longer. More information of the software that enables this is provided in the “Intangible properties” section below.