There are a lot of things people miss coming out of the gate when opening a marijuana dispensary. It’s not easy to find solid statistics in an emerging industry, but one thing is certain: it’s hard to agree on how valuable most dispensaries are. On the surface level, one could be clearing a solid profit, more than your average retail store. Some dispensaries average more revenue per square foot than Whole Foods. New owners often look at impressive numbers and get excited, that is until the costs of maintaining operations begin to add up.
The cannabis industry is bursting with opportunity, but the devil (and his lettuce) is in the details. For example, there are more regulations involved in cannabis than in most other retail operations, and those regulations are costly. Despite these regulations, however, many dispensaries are quite successful.
But many dispensaries are not.
New industries are tough for the same reason they’re so desirable. Everything is still developing, which yields massive amounts of potential. When investing in an industry that’s still developing state by state, proper planning isn’t just helpful, it’s a necessity.
The decades of combined experience behind the ONE Cannabis team makes for an impressive resource for anyone looking to improve or invest. Each member rose through the ranks in different parts of the industry, and they observed common mistakes people made. From these experiences, we’ve identified six major areas vital to a successful dispensary.
As we’ve outlined before, the job markets in most legal states are set for a huge explosion. More people will be working with cannabis than ever before, and that means employers are going to take on more people from a wider background. Working at a dispensary isn’t like other retail jobs. Many customers and patients rely on proper strains and quality supply to relieve themselves of any number of conditions.
A major portion of cannabis sales are one-on-one interactions between an employee and a customer, so that interaction is the key to standing out from competition and creating repeat customers. Good workers take work. Finding them, and then ensuring they’re properly equipped to satisfy anyone who walks through the door can be difficult. Quality customer service is one of the most common similarities among the most successful dispensaries.
2) Presentation and Branding
If you look good, you feel good. If you feel good, you are good. That’s expert advice for your own life as well as your business. If employees are the gatekeepers of the sale, your appearance is the gate. That includes layout and decor of the interior as well as advertising. As far as the physical dispensary goes, most of the good ones opt for a minimalist spread that’s becoming the standard. It makes sense — cannabis doesn’t take up much space and it has to be the focal point of the store, so you give it less to compete with. In some ways, it’s a tough model to work with. How do you give your store a personal, memorable touch with so little wiggle room?
By making good use of the space you do have. Character comes from quality, not quantity. Good dispensaries know that, and thrive off the minimalist model.
It’s important for your cannabis dispensary to be attractive to customers, but you have to get them in there first. Your branding method online and in advertisements is what does that. Social media marketing varies by the size of the business, and so do the strategies that go with it. The rules are stricter for cannabis as well. Paid social is dicey to maneuver around at best, and that’s in addition to the normal rigors of captivating a scrolling audience.
The other side of the presentation coin. While you want customers to be enticed by the aesthetic, it’s vital to take precautions against theft. It’s a balancing act.
Degrees of legality range by state, and banks aren’t much for gray areas. It’s primarily a cash only business, and anyone who’s been around since the early days of legalization probably has a story about successful or attempted burglary. It’s less rampant than in the past, but good security is still a necessity and required by all legalized states.
There are ways to help security blend in. Window bars, for example, don’t have to make the room feel like a jail cell— they can incorporate designs that make them much more flattering. Protection doesn’t end on the inside either. Cash transfers and product delivery must be overseen as well. You won’t find any fruitful dispensaries that lack in safeguards.
4) Taxes and Regulation
These factors are likely the first that come to mind when considering the hurdles to fruition, but most don’t realize how much maneuvering it takes. It’s not just what you can and can’t do. Little things add up, like the fact that the size of your sales floor directly impacts the size of your 280e tax bill.
Also, different states have special conditions they tack on for miscellaneous reasons. In Colorado, two different licenses are required to sell recreational and medical cannabis, even if they’re sold in the same place. On top of that, dispensaries must charge for sales tax, cannabis tax, and state and local taxes.
Violation of any laws is the quickest way to get shut down, which is why it is so important to abide by the current regulations. This aspect of the industry is so vital, it is usually the first step in creating a quality business.
It’s not the most glamorous aspect of business, but it is the one that will keep things running smoothly. All transactions should be logged for legal reasons, but they can also provide insight into how to make your operation better. Not only can metrics tell you when you’ll be busy and which strains are selling, but they can pinpoint which part of the transaction needs improving.
In addition, metrics allow you to figure out the average sales size can help tailor special discounts to accommodate customers and drive traffic. This information is key to providing an in depth analysis of the overall health of your business.
6) Quality Vendors
A dispensary is nothing without good product. Customers expect a well-rounded selection of premium strains and products to satisfy their needs. To guarantee this, you need the right vendors. Joining the ONE Can team already offers exclusive access to some of the most award winning strains on the market as well as relationships with revered growers and suppliers of award winning edibles, concentrates, and other cannabis products. These perks come from years of crafting and refining our approach to providing excellent cannabis to customers.
Depending on the vendors in the area, it may be difficult to nail down which one best suits your needs. It’s a mutual relationship that goes beyond just cost, so it’s important to understand their goals and methods. Testing the product in a lab is generally a good indicator of a good vendor— it’s a simple way to prove their product’s worth. Stability, experience, and commitment are also elements to consider. Vendors with these qualities are the ones that will keep your shelves full and customers happy.