3 Assumptions About Opening a Cannabis Dispensary in Canada

1. Finding and Keeping Dispensary Staff Is Harder Than It Looks

Maybe it was easy on the first day of legalization, but today’s marketplace is different. The Great Resignation, accelerated by COVID-19, has hit the cannabis sector as hard as any other service industry. There is an ongoing shortage of people applying, especially for the front-line roles that cannabis POS systems support.

In more mature markets, like California and British Columbia, competition is fierce among dispensaries and retailers. As a result, potential employees now have options and can compare notes between your store and the one around the corner.

Retain Budtenders With More Than Pay Raises

Offering competitive wages, professional opportunities, and benefits is just the start. Once you hire employees, the challenge is to keep them by operating a supportive, enriched, and understanding environment.

Marijuana Ventures suggests planning beyond haphazard pay raises. As author Terry Smith suggests, “Be sure your company’s compensation philosophy is clear and understood by all. (That starts with you.) And make sure accountability is in place so that those current employees are not shorted when new people are hired.”

We’d also recommend sending your budtenders to local networking and educational events. If you support the growth of your employees within the industry, you’ll have greater staff satisfaction and better retention — and a team better equipped to use cannabis retail analytics tools for dispensary growth.

2. Cannabis Retailers Still Need a Marketing Strategy

In many growing markets, there is still the assumption that you’ll attract customers by simply being open and licensed. After all, everyone wants access to legal weed, and you are the one selling it.

But, it’s not so easy anymore. With several thousand retailers now operating from Nova Scotia to British Columbia, consumers have options. Increasingly, you have to do much more than exist. You have to invest in marketing your brand.

Cannabis retailers face strict advertising restrictions, but compliant marketing strategies do exist within the regulatory framework. Dispensaries can also use a smart printed menu for cannabis product display to present compliant product information in-store, giving customers a clear view of available products without violating advertising rules. For starters, install integrated in-store digital signage for cannabis retailers. It’s an excellent method to advertise discounts, new products, and weekly sales to those already shopping in-store

Email Campaigns Keep Current Customers Engaged

A second valuable component of compliant marketing is to take advantage of your email list. With regular email campaigns, you’ll stay top of mind for your current customers and complement your cannabis ecommerce solutions for online sales. Return customers typically make up more than 61 percent of your annual sales and spend 67 percent more than new customers.

In a world where customers can easily get distracted by the next shiny new storefront, you have to find creative ways to keep them shopping with you and not with your competitors.

3. Dispensary Profit Margins Are Lower Than Most Owners Expect

Before legalization, cannabis operators accepted high risk in exchange for extremely high returns. For example, Leafly reported that Black Market operations could expect returns of up to 1000 percent. But these astronomical returns are no longer possible due to layers of regulation, compliance measures, and taxes biting into your bottom line.

According to one source, profit margins for a licensed dispensary or retailer usually range between 15 to 20 percent after taxes — a key consideration when reviewing the full cost to open a cannabis dispensary in Canada. The 2021 report from Leafly supported the 15 percent profit margin.

This is not meant to discourage new dispensary owners, but rather to clarify that the cannabis retail business today operates under different financial conditions than it once did.

Long-Term Stability Drives Cannabis Retail Profits

There is still substantial money in cannabis, but profits come from long-term stability rather than payoffs for high short-term risk. These days, the long-term payoff comes from establishing yourself as a mainstay in your neighborhood, offering consistent products and service, and paying close attention to the customer experience — insights backed by understanding how much a Canadian dispensary owner can make.

Use TechPOS to Operate a Smarter Cannabis Retail Business

Whether you are gearing up to open or in the initial planning stages, TechPOS offers real-time analytics, compliance reporting, and more, that empower intelligent decision-making. We help you understand your customers, beat out the competition, and boost sales through an integrated hardware and software solution.

TechPOS also supports cannabis licensing compliance by keeping your records audit-ready at all times, with hardware and software built for cannabis retail hardware integrations.