Have you ever walked into a dispensary, asked for strain recommendations, and left feeling like the budtender didn’t quite understand your needs? AI technology may soon change that experience entirely. In an exclusive interview with Benzinga Cannabis, Martez Knox, founder and CEO of BakedBot AI, discussed how AI-driven bots are revolutionizing customer experiences and B2B transactions, ensuring that customers get the right cannabis product every time.

BakedBot AI, which launched in January 2023, was born out of Knox’s frustration with the inconsistent knowledge of budtenders and the missed opportunities for personalized product recommendations. Having previously worked in marketing automation and lead generation, Knox saw AI as the solution to a problem that many cannabis customers face.

“The idea hit me when I realized that the budtender had no clue what would work best for me as a customer,” Knox said. Today, his AI systems are boosting efficiency, increasing sales, and improving customer retention for dispensaries across the U.S.

Solving Dispensary Pain Points with AI

Knox identified several pain points within the cannabis industry, especially related to marketing and customer outreach. “Bigger carriers like Verizon and T-Mobile often block messages containing certain words, making it difficult for dispensaries to connect with customers,” he explained. BakedBot AI addresses this challenge by using AI-powered autonomous agents to streamline customer engagement and reduce reliance on expensive marketing agencies.

One of BakedBot’s flagship products is Smokey, the AI-powered virtual budtender, which plays a crucial role in personalizing the customer experience. Smokey uses a customer’s purchase history, preferences, and data points like terpene profiles and desired effects to recommend specific strains.

“We’re keeping customers happy, lowering acquisition costs, and increasing lifetime value (LTV),” Knox said. This level of AI-driven personalization not only fosters customer loyalty but also helps businesses reduce costs.

Beyond enhancing the customer experience, BakedBot AI helps dispensaries manage daily operations more effectively. For example, the AI can automate tasks like competitor price tracking and product management. “We’ve saved marketers hours by automating the process of gathering competitor data,” Knox noted, highlighting how AI enables businesses to maintain competitive pricing without manual input.

Optimizing Sales and Inventory

In addition to improving customer recommendations, BakedBot AI’s tools help dispensaries optimize their shelf space by analyzing sales trends and customer preferences. “We help owners determine which products should be discounted and which should remain at full price, based on real-time market data and customer demand,” Knox said.

By leveraging AI to analyze these trends, dispensaries can avoid overstocking slow-moving products while maximizing profits on top-selling items. This not only prevents financial losses but also enhances the overall efficiency of the business.

Creating Buyer Archetypes with AI

A standout feature of BakedBot AI is its ability to create detailed buyer archetypes using predictive analytics. “AI is great at finding patterns in big data,” Knox explained. “We look at thousands of data points to predict customer behavior, whether it’s a college student on a budget or a more established adult seeking specific effects.” By building these buyer archetypes, dispensaries can tailor their marketing strategies and product offerings more effectively.

Knox gave an example: “If a customer likes OG Kush with a high percentage of certain cannabinoids and terpenes, there’s a good chance they’ll enjoy a similar strain.” This ability to predict customer preferences ensures dispensaries can offer more personalized experiences, leading to higher customer satisfaction.

Integrating Local Knowledge into AI Systems

Knox emphasized that BakedBot AI not only utilizes big data but also integrates local knowledge into its systems. “Dispensaries can upload their data about local trends, customer preferences, and word of mouth into the system,” he explained. This blend of big data and localized insights enables BakedBot AI to provide dispensaries with recommendations tailored to their specific regions.

Lead Generation and Data Ownership

One of the most promising aspects of AI in cannabis retail is its potential for lead generation. “Lead generation is all about getting customers into your funnel,” Knox said. BakedBot AI offers a headless menu solution that allows dispensaries to optimize product visibility on Google, driving organic traffic without the need for external platforms.

Knox also emphasized the importance of data ownership. “Dispensaries need their web presence to generate first-party data. If your dispensary is using the biggest marketplaces out there, you’re not getting access to first-party data,” he explained. BakedBot AI equips dispensaries with tools to collect customer data directly from their websites, helping businesses build a stronger foundation for future marketing efforts.

“AI is all about recognizing patterns,” Knox said. “It’s essentially predictive analytics at work—identifying which words and phrases are most likely to follow others based on huge data sets.” Machine learning enhances these predictive abilities by enabling systems to refine their algorithms over time, continually improving their accuracy.

Freemium Model for Small Operators

BakedBot AI offers a freemium model to ensure that businesses of all sizes can access its technology. Small operators can use a limited version of Smokey for free, which includes basic AI-driven features such as the budtender tool and headless menu solution.

For dispensaries with more advanced needs, including in-depth analytics and greater automation capabilities, paid plans start at $50 per month. “This pricing model makes AI tools affordable for smaller operators while providing larger operations with the flexibility to scale up,” Knox explained.

Future of AI in Cannabis Retail

As BakedBot AI continues to evolve, Knox is confident that his company will further disrupt the cannabis retail space. “We expect to be out of beta in a month or two,” he said, hinting at new developments that could further enhance the dispensary experience.

BakedBot AI will showcase its technology at the Benzinga Cannabis Capital Conference in Chicago on October 8-9, 2024. With over 2,000 attendees and 200 investors expected, the event is an ideal platform for highlighting how AI-driven tools can boost profitability in the cannabis industry through better margins, optimized shelf space, and data-driven decision-making.

As AI becomes more ingrained in the cannabis industry, tools like BakedBot AI are expected to play a central role in shaping the future of cannabis retail.