Dispensary Management Tips: 7 Hard Truths

Cannabis dispensary management tips

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to run a Dispensary,
and not run away
from the tricky stuff.

So, you manage a dispensary.

Ah, the dream…  It’s tempting to put on the rosy glasses and call it a day in paradise.

But as a partner rooting for your success, I’m here to tell you to take them off and listen up to the tough stuff. Here are 7 retail cannabis management tips and truths you should be aware of.

Seven Retail Cannabis Management Tips from the Pros

1. Culture + Service Standards

Creating your unique company culture and standards aren’t the hard part. It’s maintaining them that will have your head spinning. Getting started is a time consuming but exciting phase. As your dispensary starts to grow, everything you’ve worked to put in place will be tested and it will be stressful. Try not worry though, I’m here to get you prepared so you can always come out on top.

I find that it’s be to set standards you can meet, maintain and raise over time, rather than setting the bar so high from the beginning and always falling short. One of the quickest ways the respect of your staff is by failing to enforce or going back on standards. On the other hand, not setting your standards high enough is also bad for your dispensary as staff performance will hit an all time low during busy times or when they’re left unsupervised. There is a sweet spot to find and that’s something you’ll have to work at refining over time.

Management Tip:

  • Keep standards for your dispensary short, impactful and easy to remember. Consider using acronyms such as FIFO for First in First out.

2. Train for Success

Don’t underestimate the value of a strong training program. Having a poorly-trained employee will get you negative reviews— fast.

You may be thinking, “It’s more efficient to have new-hires hit the ground running without thorough training,” It’s not. You have to be in it for the long haul and skipping training will almost always come back to hurt the dispensary. Take the time to train new hires on the ins and outs of your dispensary so that they can be a productive team member. The first few days are when your new hire will set their habits, good or bad and form their opinion about how to behave long-term. Trust me, you don’t want your employees making guarantees about what a product will do for a patient’s symptoms just because they were never trained properly.

You may also be thinking, “My employee has previous industry experience so no need to spend time training them.” Well unless they’re coming from a different location owned by your brand and know your customers, you will need to spend just as much time showing them the ropes as you would an inexperienced new hire. Even in the case when a new employee is transferred from a different location to yours, I firmly believe that they should be trained to understand the nuances of your team and processes. Not training employees leaves them to either copy from other employees or completely to guess how to do their work.

Employees feel more valued when they are invested in which leads them to return the investment by being productive in the dispensary. Ongoing training is a great way to keep employees challenged, motivated and reduce turnover. I have seen employees transform, take more ownership and begin meeting and exceeding expectations after training was introduced.

Management Tip:

  • Consider testing for knowledge every so often and incentivising it! Creating an atmosphere of friendly competition can really boost productivity and create bonds between the team.

3. Prioritize your Inventory

Create a solid, well-planned inventory process. Doing so will lead to accurate product reports, help you stay compliant, streamline ordering, and keep your inventory consistently stocked.

It may seem obvious, but without proper planning, processes will break down and create costly mistakes. If there’s one area you should never “wing,” is taking the time to plan out inventory processes. I would recommend to iron all the details at least a month before opening. Put some serious thought into the processes, and absolutely write up a thorough S.O.P (Standard Operating Procedure) well before opening and accepting inventory.

Management Tip:

  • If possible, hire a talented inventory manager.  Another option is to hire a consultant to assist with planning out the process, create the S.O.P, and train your team accordingly.

4. Banking: Cash is still King

As long as medical and recreational marijuana is federally illegal, banks and merchant processors will hesitate to do business with your dispensary. As a result, running your store in the U.S. is mainly a cash business. Finding legal means of transporting cash and making change can be quite challenging. There are a lot of bad practices I have seen over the years that you should obviously avoid.

Do not have your employees use their personal banks to get change for your dispensary. Most banks will eventually find out and shut down the process, as it may be considered co-mingling of funds. To put an employee in such a compromising situation is highly unprofessional. Uphold your integrity and compliance as a company at all times.

Reverse debit, or cashless ATMs, and point-of-banking terminals can reduce the amount of cash needed on site but doing so puts you in murky waters. I’ve found that most informed customers and patients find these to be “sketchy.” But more importantly, using one of these options could put you at risk for fraud. Remember, these are work-arounds, and they do just that— work around the law. Bending rules can cost you  everything you’ve worked so hard to build. Although there are some drawbacks of being all cash, I’ll seriously recommend it over using work-arounds.

Legal tip:

  • Find a bonded cash transportation company, or a security company that also has bonded cash transportation services.
  • I particularly caution against misrepresenting your business (i.e. “health and wellness” instead of “cannabis”) at any point to access banking. You may think there’s no harm in flying under the radar, but it could land you with a federal crime.

5. Bad Customers, Good Manager

The most rewarding part of running a dispensary for me is by far watching people’s lives improve from the products we provide them. However, there will be times that customers break rules, steal, verbally abuse your staff, or, in extreme cases, become physically harassing or threatening. You need to be prepared to ban a customer from your establishment for heightened situations. I wish I could say that this will be infrequent, but I did I’d be lying.

It’s important that your staff knows, without a doubt, that you are willing to make those hard decisions. Both employees and customers should feel safe in your environment, and that comes down to how you handle disturbances. There is only so much you can do to prevent escalated situations, but there is no excuse for not handling them professionally and with authority when they do arise. As a key decision-maker, it falls on you to protect the well-being of everyone who enters your place of business.

Management Tips:

  • Hire patient, professional security guards that can handle these situations with diplomacy and integrity.
  • Be sure you and your managers know and understand the verbal trespass rules in your city. Ask your local police department for commercial business trespass rules.
  • Have S.O.Ps for handling these situations.

6. Influencer Marketing, Yay or Nay?

In an effort to increase foot traffic and brand awareness, some dispensaries will occasionally hire celebrities and social influencers. Although a fun way to attract people, you’re not necessarily attracting customers. They’re there for the celebrity, not your brand, so be sure your promotion is an integrated part of the plan.

If an entertainer fails to meet their obligations, their popularity will be unchanged, but your dispensary is going to take a hit in a few different ways. Potential customers will associate the bad experience with your establishment. Why? They’re more likely to think it was poor planning—or a sham—than to place blame on the entertainer. You may even gain negative reviews on multiple platforms. And then of course, there’s the lost time and money put into setting up and promoting the event.

Marketing Tip:

  • Use this promotional technique sparingly, and be selective with the entertainers you choose to hire. In all cases, use contracts.
  • Outline what is expected of the entertainers, their time obligation, and what will occur if the terms of the contract are not met.
  • Only pay for at most half of the entire fee before the actual event.

7. Beyond Criticism!

If you shelf your own brand side-by-side with other local vendors, you open yourself up to real, honest feedback about your products— from both customers and employees. Some owners and decision-makers have a hard time receiving the negative.

Don’t take it personally, but as an opportunity. This is free information about your consumers and how your product can better serve them! They’re essentially telling you how you can get them to buy from you.

Cannabis consumers are actually pretty forgiving— if they believe you take their input seriously. On the other hand, ignoring raised flags and continuing to put out less-than-desirable products could hurt your brand. As a result, other lines of product will outshine yours, and in the long run, require you to re-brand.

Be Proactive!
I suggest consistently asking your budtenders for insights to get a full picture of what’s selling. What other brands do they like? Which brands do they see customers and their peers attracted to, and why? Compare your products; try to improve them to the same or better quality. It’s a win for everyone; customers have better product options while you sell more of what you’re producing.

Management Tip:

  • It’s in your best interest not just to hear people out, but to really listen.  Do this, and you’ll be in a position to perfect your brand and increase sales.

No Shortcuts to Success

The bottom line? Communicate, listen, and don’t take shortcuts. As with anything you wish to see flourish, first you have to give. Put time and planning into your operation, and it will return the investment.

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