Inside CANNEX, USC’s cannabis dispensary

Mosaic-patterned windows, hanging bar lights and wooden shelves lined with colorful packages: Behind an unassuming door in the Clinical Sciences Building at Health Sciences Campus, what comes into view defies expectations of a traditional laboratory. This is the Cannabis Annex, also known as CANNEX, a mock cannabis dispensary developed by the Prevention, Early Intervention, and Addictions Recovery Lab at USC.

Built in what used to be office spaces, the CANNEX mimics a boutique-style cannabis dispensary, including price tags, product displays, decorative plants and a bar counter. The items lining its shelves — a kaleidoscopic mix of bags, boxes and jars — are empty containers that once held cannabis goods from brands that are popular in Los Angeles dispensaries. 

Completed in January 2025, the CANNEX simulates a retail experience where research participants browse and select the most appealing products. Adam Leventhal, director of the USC Institute for Addiction Science, said IAS was in support of the project and the CANNEX allows researchers to determine and experiment with factors, such as price, graphic design or warning labels, that may lead consumers to purchase certain cannabis products. 

The goal, Leventhal said, is to use the data to create policies in cannabis packaging that guide safe use and purchase of less harmful products, such as setting warning labels for high-potency cannabis products with a higher risk of cannabis use disorder. 

Eric Pedersen, lab director of the PEARL and associate professor of psychiatry and behavioral sciences, said the space was initially conceptualized as a bar, complete with stools, tables and a counter. He said the space could be utilized for observational studies related to alcohol consumption. 

Over time, the idea evolved into a mock cannabis dispensary, with shelves and cannabis packaging replacing liquor bottles. Pedersen said it took a year for the research team to stock everything in the CANNEX. The research team visited local cannabis dispensaries and gathered advice from budtenders to get inspiration for the CANNEX’s design. 

The research team wanted to create a welcoming and authentic environment when setting up the CANNEX, said Ireland Shute, project manager at the PEARL.

“We put all of the vapes together. We put all of the edibles in one section. Tinctures, topicals — more medical products [are] here in the middle,” Shute said. “We were advised to put more expensive products higher up on the shelves, intermixed with more high-potency products as well, just to emulate how companies would do it in a real dispensary.”

Pedersen said the research team developed the CANNEX because they wanted a space where they could control every detail of cannabis packaging. 

“We can change the prices. We can change the names … We can put a picture of a cartoon on one of these things and say, ‘If you have people that are underage and come in here, are they more willing to touch a product or be drawn to a product that has a cartoon on it?’” Pedersen said.

Leventhal said the adaptability of the simulated CANNEX is useful for research. Products can gain and lose warning labels in between trials, and researchers can examine the impact those labels had on purchasing behavior. Researchers hope that the resulting data will provide strong, realistic conclusions that apply to the cannabis product policy improvements in the real world.

The CANNEX could encourage people to partake in substance-related research by offering privacy, Shute said. Conducting studies in the CANNEX would also prevent disrupting sales of licensed cannabis, she said.

Shute said the research team has already concluded a pilot study focusing on the cannabis retail experience, and they are currently writing a research paper on it. In the study, 20 budtenders were asked to “sell” products with certain attributes based on different consumer profiles they face. Additionally, the researchers invited 60 young adults participating as consumers and observed their purchasing choices.

“We had them come in. We gave them 20 minutes and 100 theoretical dollars. They picked out their products, and then we interviewed them about why they purchased what they did,” Shute said.

However, CANNEX still faces limitations in its goal to replicate an actual cannabis retail experience, like the constant need to keep the shelves looking relevant. 

“Unless you’re getting new packaging, it feels like every single day your stock might not be what’s representative of the current products on the market,” Shute said.

Researchers at the CANNEX have yet to obtain a Schedule I research registration from the Drug Enforcement Administration. The registration would allow them to conduct research with cannabis products over the 0.3% threshold of delta-9 THC, one of the main active compounds found in the cannabis plant, according to the National Institute on Drug Abuse. This means that the CANNEX can’t use actual flower or edible products yet.

Because the CANNEX doesn’t stock actual cannabis products, Pedersen said researchers can’t perfectly simulate the retail experience because there are no physical products for research participants to interact with other than empty pre-rolls — ready-made joints. 

“When people buy flower [products], they like to look at [it], and they’ll buy it because it has certain colors. And they also like to smell it,” Pedersen said. “We can’t do that.”

Despite current restrictions that prohibit the lab from providing any real products, Pedersen said that getting actual products for the CANNEX would be one of the “ultimate goals.”  He said the research team has already talked to a contact at the Food and Drug Administration about getting the CANNEX licensed to administer actual products.

Leventhal said the CANNEX and its ability to provide cannabis-related research data are important as California struggles to determine what packaging policies will help keep the public safe and knowledgeable about cannabis products. 

For example, since California legalized cannabis for adult recreational use in 2016, the state has seen an increase in child cannabis poisonings by 469%, according to a report published on the California State Auditor website. In a study published this June, a team of UC San Francisco researchers found that these poisonings were primarily linked to packaging that looks similar to candy brands that seem more appealing to children.

“[Cannabis policy] is an evolving landscape, so we’re just really enthusiastic about the opportunity to provide some of the key essential data that would inform that and really protect the public,” Leventhal said.

Looking ahead, Pedersen said the CANNEX is open for USC students and researchers to use for their projects. Shute said there have only been graduate students who have conducted research at the CANNEX so far, but undergraduate students can also use the facility if they submit a project proposal through the Institute for Addiction Science.

Beyond researchers, Pedersen noted the research team plans to continue to work with brands and dispensaries to conduct more cannabis-related research.

“We built a lot of relationships with brands, with budtenders who have really good experiences, being very open about sharing products with us, about sharing their experiences,” Pedersen said. “I just think there’s a lot more we can do in the cannabis space in terms of research.”