Since the legalization in Canada of recreational cannabis, the cannabis industry in North America has grown significantly. Currently, the use of medical cannabis is allowed in 37 US States, and 21 allow recreational use. There are many opportunities for cannabis businesses to grow as the industry matures. However, not all cannabis businesses will succeed. It is possible to open a successful dispensary, but some businesses fail due to not following the success secrets outlined in Cova’s whitepaper about why some cannabis retailers are unsuccessful. In order to grow and thrive in this highly competitive market, you must use the six strategies that successful cannabis retailers have used.
Use Cannabis Retail Data
Data analytics is used by successful cannabis retailers to make informed business decisions. Inventory metrics are tracked, such as the top-selling products and categories, the profit per item, inventory ageing, inventory turnover and shrinkage. These metrics allow them to buy the right merchandise, optimize their operations and reduce capital in cannabis inventory.
Cannabis retailers can use AI-powered data analysis to collect customer data including product preferences, online search histories, shopping patterns and spending habits and create more effective marketing and engagement strategies in order to increase sales.
Build strong relationships
It is crucial to success that you build good relationships with your customers and the community. It is important to educate the community on safeguards at your dispensary, and how you are keeping cannabis out of reach of children. To build brand loyalty and improve the customer experience, your budtenders need to listen to their customers and communicate well.
It is important to treat employees well. Retention of employees promotes product knowledge and strengthens customer relationships. Profit-sharing programs at your dispensary may also encourage employees to put more effort into the business.
Manage Finances Efficiently
A cannabis retail business that is successful will have a good financial management system. Budgeting for unforeseeable circumstances is important, as well as avoiding common pitfalls such a failing to research the market or regulatory changes. Successful retailers are able to anticipate the market and adjust strategically, rather than simply following their competitors or heavily discounting products.
Modern technology helps you make smart business and financial choices. With the best dispensary software, you can see your sales, costs and profit trends in a single glance. You can integrate your cannabis point of sale with an accounting tool like QuickBooks online or ERP software if you want a comprehensive financial overview.
Optimize dispensary operations
In the cannabis industry, operational efficiency is crucial. Retailers who are successful invest in technology that simplifies their operational processes and maintains compliance with the regulations. They also avoid common failures such as power interruptions, internet outages and system crashes.
A POS with an offline mode will prevent sales from being stopped when the internet goes down, and it will sync up inventory information once the internet comes back on. Automating seed-to-sale trackers eliminates human errors and can catch compliance issues that could lead to license loss. Invest in advanced technology to maintain a consistent experience for your customers across all sales channels.
Create great customer experiences
The success of cannabis retailers depends on providing excellent customer service. Successful retailers listen to and educate their customers on the products. Customers are also kept safe, particularly in areas with high crime rates, when retailers implement appropriate security measures.
Dispensaries offer their customers more and more convenience when it comes to buying cannabis online as consumer behavior changes. Cashless dispensary payment will also increase your revenue as consumers are used to using contactless payments. They don’t carry cash anymore.
Develop a strong brand vision
A clear business plan, and a brand vision are essential to the success of any cannabis retail business. It is important to avoid common pitfalls, and adapt to changes in the industry or regulations. Successful retailers master dispensary operations and navigate market fluctuations to achieve their goals, and support their community.
The cannabis retail industry presents significant opportunities to entrepreneurs who are willing to navigate through the risks and challenges of strict regulations. Download Cova’s “Why Some Cannabis retailers Fail and the Secrets of those Who Succeed” e-book to learn how to apply retail principles to your dispensary.
Gary Cohen is CEO of Cova. Cova is the most trusted cannabis POS in North America. Gary Cohen has met with over 2000 dispensary owners from coast-to-coast and uses his expert knowledge to help cannabis retailers get a license to operate, to pass inspections, to launch a new store, to assess tech tools, to scale operations. Gary conducts seminars on retail technologies, compliance, business operation, and cannabis banking laws, at industry events such as NCIA, CannaCon and MJBizCon.
The National Cannabis Industry Association published the first version of the post Members Blog: Six Key Strategies for Success in Cannabis Retail.
