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Adapt or Die: 3 Ways to Future-Proof Your Dispensary Business Today!

Apr 5, 2017 2:25:00 PM / by Barry Lai

Our industry is changing fast. Margins in the cannabis retail world are shrinking and they will continue to do so**. As supply goes up and prices go down, operators who aren’t actively changing their business practices right now are in danger of getting plowed under when people with more money and better systems make a land grab in their territory. Survival, for most, is going to depend on tightening up or replacing antiquated systems and getting a new set of tools. So, let’s look at three things you can put in place today, that can help you future-proof your business for tomorrow.

1. Gut decisions are costing you thousands of dollars

Nobody knows everything about their business and those who are foolish enough to think they do end up lagging behind the operators who are using more intelligent, adaptive methods like…data analysis. Are you getting more than 5% shake in every pound? Are you mandating that your vendors deliver 95% A grade product consistently? Did you know that your employees may be spending 2-3 hours breaking down a pound when the industry average is one? Are your product categories trending up or down? Are you losing money by discounting over 12% of your sales? These are the questions that data can answer.

For a start, you could calculate how much 1% of shake and 1% of packaging/handling loss is costing you per $1 million in flower sales. Most dispensaries are saving (or losing out on) nearly $22,000 per one million dollars. That’s a lot of cash, and if you’re not keeping track of these kind of metrics and making adjustments to your workflow, you could be leaving a substantial amount of money on the table. The bottom line is, your intuitive decision making will only impact the decisions you can touch, taste, and smell. If you want to scale your business, you are going to have to rely on data and not intuition. Actionable data is your friend. Use it.

2. Over staffing is costing you thousands of dollars

If you think you need six registers to handle 500 tickets a day, you don’t.  A busy California dispensary running Treez can handle around 800 tickets a day on just two or three registers. The problem is that, most of the time, operators make up for systemic inefficiencies by overstaffing their sales floor instead of improving their workflow, and they end up just burning money on labor when they could be boosting their profits by putting better systems in place. For example, if you can cut out even one budtender a day at $15 an hour, you’re saving yourself $4500 a month. Cut out three, and now you’ve got over $13,000 in the bank. Again, it all comes down to systems. With the right software and the right workflows, you could be signing up new patients in under 90 seconds and handling twice or three times your current sales volume, effectively eliminating all of the usual bottlenecks that every dispensary experiences. This is not only possible, it’s happening.

3. Weighing at the point of sale is costing you thousands of dollars

I know, your patients love that you serve “deli style” and weigh out their flower in front of them. Who wouldn’t? It’s a romantic throwback to what businesses used to be and customers, especially new ones, like the ritual. But there’s a huge downside. If you serve deli style, you could be throwing as much as 30% of your profits down the drain while you are collecting little to no data about purchasing habits. Sure, when your margins were sky high, what was the big deal? But now you’re in a dogfight, and you need to be paying attention to where every fraction of a gram is ending up. Prepackaging allows you to track that. Simply by switching to a prepackaged model, you could be cutting theft and diversion to .01%, using metrics such as percentage of shake in every pound to leverage negotiations with your vendors, enforcing employees to 1.5% packaging loss per pound, and holding them to about 1.25 hours per breakdown. The writing on the wall is clear. Prepackaging is the new norm and the benefits are numerous. However, if you’ve been operating using deli style and this paragraph scares the hell out of you, there is another option. We know one size does not fit all, so at Treez we have developed a hybrid process to help ease your staff and transition your customers from deli style to a prepackaging system.

In Conclusion

If you take these three points together, our clients are saving between twelve and twenty-thousand dollars a month by making data driven decisions, improving their systems, and boosting their profits by prepackaging with Treez. We’ve helped dozens of dispensaries shore up their systems and maximize their profits by providing them with the most forward thinking software platform on the market that includes a host of best practices that are baked right into our products.

Interested in learning more? Give us a call for a free, live demo at: 1-888-318-6162 or email us at:

**A recent report from cannabis data firm BDS Analytics listed the average price for a gram of flower (including single grams, eighths, quarters and so on) at $5.77 the week of 4/20 this year and $6.67 during the rest of April, down from an average of $8.86 in the first quarter of 2014, when recreational dispensaries were first allowed to open.

Topics: insight

Barry Lai

Written by Barry Lai