• jeffrey harris

What Makes a Successful Dispensary

In 1992, the history of cannabis changed forever when the first American medical cannabis dispensary was founded in San Francisco. At first, expansion of the industry was slow, but in the past few years cannabis has become the fastest growing industry in the nation.


Today there are 33 states which allow the use of medical cannabis, and 11 allowing recreational use, as well as the District of Columbia. All across the United States, there are hundreds of retail shops where cannabis culture is growing every day. This is no more evident than by the incredible expansion of multi-state operators.


Needless to say, as that industry evolves, the market is becoming increasingly competitive. 

So what is it that makes a dispensary successful and able to compete in this newly crowded marketplace?


1. aesthetically pleasing and efficient retail space

One thing most successful dispensaries have in common is the optimal use of their retail space, including aesthetics and workflow.


First, make sure that your store layout makes sense. 53% retail shoppers said disorganization was a primary reason for not returning to a store. You want it to be easy for staff and customers to find products, check-in, and cash out. Take a strategic approach to display merchandise, and give customers easy access to budtenders.


Next, add some personality to your brand. While practical use is crucial, getting creative with your interior design can make a real impact on your customers. Decorating is part of what defines your store, and there is a wide range of looks to go for. You can try a more modern industrial style, or something more warm and casual. Put some feng shui into your floor plan. For a little inspiration, check out this article from our partners over at COVA.


Regardless of how you decide to decorate or design your shop, make sure it is clean for your customers. 

  • 95% of consumers say exterior appearance is important when selecting a store

  • 32% of customers say a dirty store was the primary reason for not returning to a store

Do not let a bad look keep your business from being successful. 


2. a well-trained staff of helpful budtenders

A business is only as good as the people you fill it with. It takes a village, after all. Keep in mind, 70% of Americans say they will spend more at business that has good customer service. Therefore, a major priority for every successful dispensary is creating a culture of excellent customer service. 


It begins with hiring the right budtenders for your business. It isn’t enough to just hire someone who thinks their years of “independent product research” makes them more qualified. You want individuals who share your values, and who know how to treat people. Personality and perspective are important.


From there, dispensaries should train their staff to be the customers’ best buds (yup, we said it). That means understanding the products, people and most importantly, regulations. Make sure to thoroughly train your staff in the most crucial areas, such as:

  • Customer information

  • Purchasing limits

  • Packaging labels

  • Product potency

  • Using point-of-sale system

  • Understanding your loyalty rewards program

Cross-training your employees is also beneficial. The more knowledge they have of your dispensary, the more helpful they can be to your customers. 


3. choosing a dependable and effective POS software

There are plenty of point-of-sale (POS) systems out there, so make sure to do your research and choose a POS software that is right for your needs.


Some important features to watch for when shopping around for a POS software include:

Inventory tracking

  • Accessibility

  • User-friendly platform

  • Online ordering

  • Pricing

  • Real-time reporting Cannabis compliance assistance

  • Integration options

Having a point-of-sale system that is easy to use and helps budtenders improve the customer service experience. Access to detailed reports helps you stay on top of your costs, track inventory tracking, and decide which products to place at the forefront of your dispensary’s marketing strategy . All of these are elements of your POS system that can make other items on this list much easier to accomplish. 


Additionally, a POS system that supports integrations with additional dispensary technology can help build a more comprehensive customer experience with the inclusion of a loyalty rewards program. More on that in the next section...


4. establishing a dispensary loyalty rewards program

One of the best opportunities you have to ensure you’re dispensary is successful is creating and implementing a loyalty rewards program. Not only do these programs allow you to retain customers through a system of personalized rewards, but they also encourage desired purchasing behaviors while collecting crucial data points on consumers that make targeted marketing easier and more effective.


A case study of our dispensary clients shows that loyalty members make up around 10% of total customers, but accounted for nearly 75% of total spending in 12 months! What this tells us is that providing incentives to loyalty program members is an effective way to boost sales and increase customer spending over time.


As a dispensary owner, you have options on how you want to create your loyalty program. You can offer a variety of incentives, such as:

  • Exclusive discounts on products

  • Free giftsIn-store contests

  • Store brand merchandise

  • VIP experiences

Design a loyalty program that fits best with your dispensary’s business model and brand identity. Then use it as the engine powering your marketing strategy. For example, you determine whether you want to implement a visit-based or a spend-based system. Either one is far better than none, but our experience shows us that spend-based systems are far more efficient, because this approach provides a more proportionate scale for rewarding the most loyal customers.


At the end of the day, a dispensary loyalty program makes your customers happy and keeps them coming back. It builds your dispensary reputation and helps you build stronger relationships with your customers. Especially when incorporated a text message marketing platform.


5. communicating with customers about specials, deals, and promotions

Communication is key in modern marketing strategy. Customers, especially those in the cannabis consumer demographic, expect it. What is the point in having great deals and exclusive promotions if customers don’t know about them?


A successful dispensary utilizes the most effective method available to stay connected with their customers - text message marketing.


Texting remains the most popular form of communication for American adults under 50. Text messages have a 99% open rate, and 90% of texts are opened within 3 minutes of being received. This makes it a far superior form of marketing when compared to emails or push notifications.


Of course, different states have different advertising laws for SMS marketing, with the Telephone Consumer Protection Act (TCPA) and the Federal Communications Commission (FCC) regulating the space. Therefore, working with a text marketing software that is experienced and compliant with cannabis marketing laws is critical.      


When using SMS and MMS text marketing, your dispensary has a direct line to engage with it’s most valuable customers, keeping them up-to-date on important information such as:

  • Deals and promotions

  • Special events

  • Changes in store hours

  • New inventory

With springbig, our cannabis text marketing software lets your dispensary to target your audience based on data-points collected through your POS system. So you can send unique messages based on interests, purchase history, and a wide range of other filters to make the most out of your campaigns. 


Coupled with our loyalty rewards platform, cannabis text marketing is the most influential tool a dispensary can have. 


6. a passion for cannabis

A lot of people who want to get into the cannabis business, and for good reason. It is proving to be an industry with some of the most amazing potential for growth. While being valued at 11.9 billion in 2018, experts expect that the US legal cannabis market will reach $66.3 billion by the end of 2025. As more states show support for passing cannabis legislation and a growing rate of Americans call for legalization, the cannabis market continues to blossom.


But if you’re only in it for the money, it can be a real uphill battle. We believe that the most successful dispensaries will be built on a passion for cannabis, especially in the current climate.


Despite mounting popularity, cannabis retail still faces many hurdles. Being realistic, there are a lot of hassles and hoops to jump through, and it can be frustrating and disheartening for those who aren’t committed to the future of the industry. Just getting a license can be like running a gauntlet. Sure, plenty of big businesses will manage to get into the space and profit. However, for small business owners and start-ups, it takes ingenuity, determination, innovation, and passion. Caring about the people who come into your dispensary, and about their needs and preferences when it comes to cannabis.


We believe in helping those who have a passion for cannabis offer the best possible experience to their customers. That is why we’ve created the leading CRM and loyalty marketing platform specifically for the cannabis industry. We want your dispensary to be successful because connecting passionate retailers and their customers is the best way to cultivate a more connected cannabis community. 


Want to see how we can help you accomplish this, Schedule a demo and let us show you!

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