7 Cannabis Business Tips From Leading Marijuana Retailers
By Thomas Holman, Retail Engagement Manager at LeafLink.
Dispensaries are experiencing massive growth. By the end of 2019, retail sales are expected to top $12 billion - an increase of 35%, according to Marijuana Business. But the key to staying relevant, as well as profitable, is managing inventory.
It’s one thing to offer the best bud, but in today’s retail landscape where new brands and product categories are emerging, it’s important to stay current with shifting trends and tastes of consumers. That’s one of the key takeaways from LeafLink’s Retail Cannabis Purchasing Guide.
We gathered several insights by talking to our Retail Insights board, a panel of 15 purchasing managers from across the country. As the cannabis industry’s wholesale marketplace, LeafLink works with thousands of retailers to simplify their purchasing processes. While challenges vary across dispensaries, several core themes emerge that every cannabis retailer should know.
1. Regular Catalog Reviews Are Key When Purchasing for Multiple Locations
Lightshade’s Zach York holds catalogue reviews twice a year to re-evaluate current brands and to bring in new vendors. This helps him keep track of inventory across their 8 Colorado dispensaries while vetting new products.
2. Top Purchasing Managers Discover Products Across Many Channels
In addition to browsing new offerings on an ordering platform like LeafLink, retailers rely on several different sources to discover new products. Harborside’s Adrienne Jones-Mulligan uses Instagram, while Kaleafa’s John Widmer sources new products and brands through trade shows, meetings, and vendor email.
3. Introducing New Products Helps to Gauge Changing Preferences
Kaleafa brings 4-6 new brands into their dispensaries on a monthly basis to test how new products perform with their customer base. They specifically target products that bring something new - like price point or effect - to their existing category offering.
4. Samples Matter When Evaluating Vendors
Across the board, everyone we spoke to agreed that samples are a must when considering new products. Testing products helps retailers assess qualities like experience and effect, and it allows employees to familiarize themselves with the product before selling it to consumers.
5. Leading Retailers Get Samples for the Team
Our Retailer Insights Board members said they incorporate employee feedback on samples through one-on-one meetings and worksheets. When evaluating new vendors, they often rely on cross-departmental discussion for insight.
6. Negotiating Is an Option for Most Orders
Some vendors are flexible on pricing when you place large or frequent orders. Always investigate the product category to get a feel for the market before negotiating.
7. Everyone Has a List of Criteria to Evaluate Vendors
Can the vendor meet your customer demand based on the size of their operation? What are their payment terms? What are their delivery policies? Those are just some of the criteria retailers use to evaluate new brands. Develop a set of “must haves” for prospective vendors to ensure you’re getting the best terms each time.
Learning how leading cannabis buyers stay organized as they manage growing purchasing operations sheds light on the way this industry is rapidly progressing. At LeafLink, we’re excited to be part of the process to help create standard practices across the cannabis space as it develops. For more direct insights from dispensary managers and owners, as well as a checklist of vendor evaluation criteria for your next purchase, download the full Retail Cannabis Purchasing Guide.
Lead photo by Javier Hasse.
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