Nugg Club: Cannabis Subscription Boxes Hit The Market For 2020

Cannabis Subscription Boxes Hit the Market

Subscription boxes are all the rage in recent years with hundreds of industries joining in on the monthly delivery craze. Thousands of companies have turned retail into a SaaS-model, delivering monthly boxes of everything from makeup and clothing to dirt of the month and scavenger hunt tools. Now, cannabis is about to join the ranks of BarkBox, ipsy and StitchFix.

Nugg Club, which is now available in Los Angeles and Orange County, is owned by parent company NuggMD, the nation’s leading cannabis-focused telemedicine platform. The box will deliver full-sized, highly-curated and personalized cannabis products directly to the consumer’s doorstep.

The new Nugg Club cannabis subscription is participating in a market that grew 890% from April 2014 to 2018, and continues to grow. Around 54% of online shoppers say they are members of a subscription box service. Subscription service customers are more likely to be younger millennials living in college towns or “hipster” areas, two common characteristics of cannabis consumers. According to Headset, millennials alone contribute to roughly 52% of all cannabis sales in the United States.

This type of service adheres directly to aspects of human psychology – a desire for services that are convenient and bring unique products and experiences into our lives. The simple act of opening a delivery ignites the euphoria and excitement of discovering something new. The consumer doesn’t always know what they are going to find, but it’s always a novel product, and that alone is a huge factor in the success of subscription services. That’s probably part of the reason over half of the subscription market is “subscribe for curation” where consumers are surprised by a variety of different items.

Nugg Club fulfills those needs with its team of certified cannabis curators that analyze hundreds of thousands of product reviews to identify the best brands and products offering the most value to consumers. They keep a keen eye for brands with social causes and social responsibility at their core, as well as new brands or product lines to push forward to consumers. These newly-launched products will sometimes be found in the Nugg Club delivery before they even appear on shelves.

Each box will cost $99 and contain five to seven products valued at just about $250, according to the company. That price is a lot more expensive than ipsy or BirchBox – but is in line with what most millennials spend at a dispensary. According to Headset, the average basket in California is $68.70 for a little over 2 items per basket. Through Nugg Club, the customer is effectively receiving five to seven products for the price of 3. Like other subscription services, the boxes are highly personalized. Customers can select the type of product(s) and strain(s) they want to receive in their box with each month’s selection improving based on their feedback. Not the biggest fan of a particular vape flavor? Leave a comment and never see it again. Still have full products a month after the initial box? Deliveries are available every one, two or three months.

Customers can cancel deliveries at any time, whether they’ve received just one box or twenty. Subscribers tend to stick with a typical brand as long as they receive “tangible benefits, such as lower costs or increased personalization,” according to McKinsey & Company. In fact, 28% of those McKinsey surveyed said that personalized experiences was the main reason they continued the service.

But consumers are also quick to cancel when a box doesn’t provide a superior service. Anything from poor product quality, dissatisfaction with the assortment or a lack of perceived value can cause consumers to cancel. Another issue is matching supply and demand, where a customer runs out too quickly or finds products piling up. Nugg Club’s add-on service comes in handy here for when subscribers need that extra shipment of their favorite product.

As the box goes to launch, Nugg Club is being mindful that we are in the midst of a pandemic. In response to recent studies that report an uptick in depression, anxiety and PTSD symptoms among healthcare professionals treating COVID-19 patients, Nugg Club is offering a limited quantity of $1 boxes to qualifying workers.

This is an exciting step for NuggMD and the cannabis industry as cannabis becomes more mainstream and accepted in today’s culture. With people stressed out but still practicing social distancing and craving personalized shopping experiences, Nugg Club may be the box of weed we all need right now.