Have you ever walked into a dispensary, asked a budtender for advice and left wondering if they had any idea what you were talking about or needed? In an exclusive interview with Benzinga Cannabis, Martez Knox, founder and CEO of BakedBot AI, shared info on AI-driven bots are changing customer experiences and B2B transactions by making sure you get the right product every time.
BakedBot AI launched in January 2023, but Knox's journey with AI began earlier when he worked in marketing automation and lead generation.
Frustration with the budtender's lack of knowledge sparked the idea to leverage AI for more personalized cannabis recommendations.
“The idea hit me when I realized that the budtender had no clue what would work best for me as a customer,” Knox said. With advanced AI tools, his systems are boosting efficiency, sales and customer retention for dispensaries.
Knox identified several pain points in the cannabis industry, particularly the challenge of reaching customers through marketing channels.
"Bigger carriers like Verizon and T-Mobile often block messages containing certain words, making it difficult for dispensaries to connect with customers," Martez noted, adding that BakedBot AI addresses that issue. How? By using AI-powered autonomous agents that streamline customer engagement while improving outreach without relying on expensive marketing agencies.
One of BakedBot's flagship products, Smokey, the AI budtender, plays a crucial role in personalizing customer experience.
Smokey uses customers’ purchase histories and other data points to recommend strains based on individual preferences, from terpene profiles to personal preferences.
“We're keeping their customers happy, lowering acquisition costs, and increasing lifetime value (LTV),” Knox explained, underscoring how AI-driven personalization enhances customer loyalty and reduces business costs.
Beyond personalization, Knox emphasized that BakedBot AI is designed to streamline daily operations for dispensaries, helping reduce losses and optimize workflow. Companies have found that after implementing AI tools, they can automate tasks such as price tracking against local competitors.
“We've saved marketers hours by automating the process of gathering competitor data,” Knox explained, highlighting how AI-powered tools enable businesses to maintain competitive pricing strategies without the need for manual input.
BakedBot's AI also help dispensaries optimize 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.
These tools not only prevent losses from overstocking slow-moving products but also help maximize profitability by focusing on top-selling items.
One of the key advantages of BakedBot AI is its ability to create detailed buyer archetypes. “AI is great at finding patterns in big data,” he said. “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.” This ability to build buyer archetypes ensures that dispensaries can tailor their marketing and product offerings more effectively.
“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.”
Knox explained that BakedBot AI integrates both big data and local knowledge to create a comprehensive solution for dispensaries. “Dispensaries themselves can upload their data about local trends, customer preferences, and word of mouth into the system,” he said.
Knox says there is great potential in AI's ability to drive lead generation. “Lead generation is all about getting customers into your funnel.” BakedBot's headless menu solution allows dispensaries to optimize product visibility on Google, driving organic traffic without relying on external platforms.
He was clear on the importance of dispensaries owning their customer data. “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 said. “We provide dispensaries with the tools to gather that data directly from their websites.
“AI is all about recognizing patterns,” Knox explained. “When you look at large language models, 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 comes into play by enabling systems to find these patterns and learn from them, improving predictions over time.”
He added that with AI, “it’s more like advanced predictive analytics, helping businesses make decisions based on vast amounts of data that constantly refine as new information comes in.”
"We offer a freemium model," Knox said, noting that small operators can access a limited version of Smokey for free. This model includes basic AI-driven features, such as the budtender tool and a headless menu solution.
For more complex needs, such as advanced automation and in-depth analytics, dispensaries can upgrade to paid plans starting 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 said he’s confident the company will further disrupt cannabis retail. "We expect to be out of beta in a month or two," he said, hinting at future developments that could further enhance the dispensary experience.
BakedBot AI will be at the Benzinga Cannabis Capital Conference in Chicago on October 8-9, 2024. Investors can check out how their AI tools drive critical improvements in margins, cost of goods, and shelf optimization through predictive analytics.
With over 2,000 attendees and 200 investors expected, it’s a prime opportunity to see how AI can maximize profits in cannabis retail.