Steve Flaks, VP of Sales, BioTrackTHC
When it comes to operating a dispensary in up-and-coming cannabis markets, there’s no guaranteed formula for continued success. In fact, the longer you’re able to stay in business, the harder it can potentially be to sustain success as competition heats up. Fortunately, the industry is slowly getting to a place where we can examine other states and take the successful pieces of each business and use them for our own; however, with unique rules and regulations in each state, it’s rare that it’s perfectly applicable, especially across state lines.
So what can you do to make sure you’re poised for success in this unpredictable, highly competitive industry? Here are four tried-and-true practices that you can apply to your dispensary in any state.
1. Social Marketing Strategy.
In most states, advertising and marketing are extremely limited in the majority of public facing venues. States like California have enacted laws that prohibit the majority of common advertising mediums, so cannabis businesses need to get creative in order to establish a brand presence and rise above the competition.
Social media is your most affordable option, but even then it can come with consequences if you don’t abide by your respective platforms policies and guidelines. Build a strategy that resonates with your local community; it doesn’t have to be directly about selling cannabis, just give people a reason to relate to your brand and they’ll become loyal customers.
2. Strict, Continuously Improving SOPs.
The hardest thing about getting licensed is that it affects every single thing you do in your business. You can’t change anything without fully understanding how it affects compliance, bottom line and operational efficiency, so adhering to a strict set of Standard Operating Procedures that you’re constantly improving upon will create optimal business practices that you can sustain and scale.
3. Sound Infrastructure for Technology.
This is a cost that you have to sink in order to scale and optimize your success. Invest up front in things like security, integrated hardware, flexible cannabis software with compliant track and trace for seed to sale, and if you really want to succeed in the long term, you need a way to utilize your business’s data.
If you opt to go with the bare minimum and then rules and regulations change, it could ultimately cost you more money when you’re forced to upgrade or implement compliant technology after you’ve already established comfortable workflows. Invest in your technology right in the beginning so you don’t have to worry about it later, then when everyone’s scrambling to get technology systems into place, you’re already improving upon yours and tracking data you can turn into real business results.
4. Recruit and Retain Talent.
High turnover is one of the biggest issues in existing state’s cannabis markets. Every new employee is going to cost you 10x more to train than keeping the ones you have. Find people who are committed to this business and who are willing to work hard, then make sure you give them a reason to stick around. All employees want is to be treated well and to be taken care of, so show them you care.
It’s important to build a culture that attracts talented people and keeps them around or you’ll spend valuable business hours training new employees and making sure they know how to operate your highly complex, highly regulated and highly volatile business, where simple mistakes from untrained personnel could cause noncompliance and hefty fines.
We’re nearly five years into Colorado’s adult-use cannabis sales and we see a market where 33% of dispensaries are now part of a chain and that number will only increase. When you look at California, it has provided opportunities for businesses of all sizes to succeed, but those safeguards aren’t going to last since the state will open the door for unrestricted growth after five short years.
Every state is heading in the direction of business’s natural order, where those who succeed will slowly overtake those who are stagnant; it’s just a question of how much time you have to create a brand that people want to be loyal to, both customers and employees, before the market gets saturated.