How to Run a Successful Dispensary

August 19, 2021


Today, almost all states in the US and the whole of Canada allow the use of marijuana. As a result, there is a new rush in the industry sweeping the nation. According to reports, over 95 percent of US citizens reside in regions where cannabis is legal to an extent. Of these, over 25 percent live in areas where marijuana use for recreational purposes is permitted. For this reason, new businesses in the cannabis industry are cropping up every day like weeds. These include processing facilities, cultivation operations, warehouses, and dispensaries, to name a few.

It is no secret that the industry is experiencing rapid growth. According to a report by Grand View Research, the global cannabis market will be valued at about $146 billion in 2025. A significant portion of this figure will come from legal and MMJ markets. For stakeholders in the cannabis industry, this presents a myriad of opportunities. Some of them include growers and retail stores.

But as many of these companies have found out, with such opportunity comes great competition. The influx of entrepreneurs in the industry means that dispensaries are forced to compete more with lesser margins. Moreover, the price of marijuana is falling due to overproduction and meager demand.

We will give you a few insights as to how you can run a successful cannabis dispensary. There are steps that you can take to protect your dispensary from the rising competition and decreasing marijuana prices. You can make your business stand out from the rest by focusing less on competing with others’ price levels and more on giving a top-quality experience to customers. Despite these emerging challenges, you can still run a successful dispensary.


Location is everything. Though it may sound like a cliché, the fact is, it is true. If you choose a location that does not offer customers easy access to your business, you will have a hard time getting them to come in. Additionally, choose a location with a competition level and demographics to suit your needs. Location is a major determinant of businesses’ success, and that extends to those in the marijuana business, too.

However, if your dispensary is already operational, your location is set in stone. On the other hand, if you are looking to open a dispensary soon, there are a few important aspects to look out for. They will help you to set up your business for success, and they include:

  • Demographics: Do comprehensive research on what the local population looks like. Find out how they feel about marijuana. A population that has more younger people tends to be more open minded. For this reason, they will likely buy more cannabis products than those in more conservative locations. They might be more welcoming to the idea of a new cannabis dispensary in their neighborhood. Also, locations near schools, community centers, and others are not a good idea. They might be counterproductive to your business due to parents’ desires to protect their children from the influence of marijuana.
  • Ease of Access: As mentioned earlier, a location that customers find easy to walk to will be influential in your dispensary’s success. Ample parking, public transportation, and wheelchair accessibility are also perfect for your dispensary. Additionally, if your clients are able to get in and out of traffic during peak hours, it can encourage them to be regular customers. If customers feel like coming to your dispensary is a chore, it will be hard to convince them to come in.
  • City Regulations: It goes without saying that you cannot open a dispensary in a location that is not zoned for it. However, you have to account for possible zoning changes in the future. Keep yourself updated with local ordinances and laws. Even in states where marijuana is legal, it is common for cities to limit the number of locations where cannabis dispensaries can be opened or even completely restrict them.
  • Location of Your Competition: In most marijuana-friendly states, competition for your cannabis dispensary is major. You can set your business apart by considering your location in comparison to your competitors’. It is not a good idea to pitch camp close to existing dispensaries. The more locale you can corner for yourself, the easier it will be to make your business successful.


Under federal law, marijuana is still illegal. For this reason, each state that is marijuana-friendly has its own different laws governing the way marijuana dispensaries operate. The laws regulate aspects such as:

  • Where cannabis dispensaries should be located
  • Quality controls for marijuana products
  • The number of cannabis products your dispensary can sell
  • Security measures that cannabis dispensaries should have in place

Full comprehension of these laws is critical to running a successful dispensary. This applies to state, federal, and local laws. Keep yourself aware of upcoming changes in legislation to make appropriate changes to your business.


The competition in the cannabis industry has grown so much. It is important to secure the right partnerships if your dispensary has any hope of succeeding. Your business’s ability to successfully compete on quality and price will depend largely on your relationships with local vendors. Partnering up with the right local growers and vendors is a critical aspect of the success of your dispensary. These partnerships ensure whether you always have products that are low priced or ones that are high priced. The better the quality, the higher the price, generally. Your dispensary should also have a variety of marijuana strains and other 420 products.

Establishing strong relationships with a number of vendors can keep your dispensary agile. This gives you the chance to meet new demand from clients by sourcing new products in the market. Better yet, you can secure an exclusive partnership with a stakeholder for your dispensary.

The most effective way to develop advocates and strengthen your brand is to expand through word of mouth. It also helps you to understand your unique customer base. Research in your local area to understand industry standards and your prospective customers’ preferences.


The majority of the most successful businesses have made strides by getting involved with local communities. According to research conducted in 2015 by Nielsen, 66 percent of the participants surveyed were willing to spend more money on popular brands. This was as long as the brands were sustainable and socially conscious. You can set your dispensary apart and establish it as an important part of your community. Do this by supporting initiatives to engage, educate, and benefit your potential customers. This will help you to raise your brand’s awareness. It will also decrease the negative stereotypes of marijuana that may be present in your community.

Actively engaging your community will boost your brand awareness. Consequently, your customers will have lasting positive associations with your dispensary. This is important in securing customer loyalty over time. You will also be contributing to the overall success of your cannabis dispensary.


Do not have a competitive strategy that is entirely based on pricing. That is not the only bar your clients will judge your marijuana dispensary against. Unless you want your business to be held to this type of competition, you should go a step further to make your dispensary stand out. Some ideas include:


When every weed dispensary feels the same, there is no incentive for customers to seek new experiences in other dispensaries. However, if your store were to offer a different in-store experience to customers, it would be a good draw. Ensure that you foster unique relationships with them on individual levels. Strategize on your dispensary’s layout, visual merchandising, and settle for the most effective option. Invest in a functional dispensary payment processing system. You can include cannabis debit processing to make the system effective for you and your clientele.

For instance, you may come up with a refined shopping setting similar to conventional retailers. Make sure that it’s something that your customers are already familiar with, such as a setting in high-end liquor, jewelry, or cosmetics stores. This helps to cultivate respectability. It can be the difference between loyal customers and the ones who only purchase once or twice.

Also, there is more to in-store experience than just looks. The complete experience includes how your cashiers interact with customers and how your dispensary handles browsing. It also includes how your security interacts with clients, and customer support, to name just a few. Have a flawless cannabis payment processing system. All these factors influence how your customers perceive your dispensary and determine if they will become regulars.


To get an edge over your competition, offer customers what they cannot get from your competition. This can be tricky because vendors usually want to work with as many marijuana dispensaries as possible. Yet there are ways around that.

You can secure an exclusivity deal with a vendor, but you might have to pay a premium guaranteeing that you are the only dispensary selling that product. If your pockets are deep, you can negotiate with your vendor to buy out all their inventory and future productions of a certain product.

Also, you can partner up with a vendor and develop an in-house brand exclusively for your cannabis dispensary. This way, you will reap the profits from a brand that none of your competitors can offer.


If you are going to run a successful cannabis dispensary and offer a top-notch experience to your customers consistently, you have to ensure your operations are flawless. At the very onset, you have to streamline processes. You have to lay down definitive processes on how your staff members deal with out-of-control customers, busy time windows, and long lines, just to name a few. All these factors will greatly impact the general customer experience at your cannabis dispensary.

Before embarking on this, you have to establish quantifiable key performance indicators for your business. After this, you can perform an efficiency audit to determine your dispensary’s present performance against those indicators. For instance, you will be able to know:

  • What are your average wait times?
  • What are the shrink rates at your dispensary?
  • What is your dispensary’s average transaction value?
  • What is your dispensary’s average conversion rate of visitors to customers?

This information gives you an insight into areas in your operations that you can improve.


After all the investment you have poured into your cannabis dispensary, it is important to have an efficient system for critical tasks. An effective point of sale system not only offers efficiency to your customers but also ensures convenience to your staff. For instance, modern systems have a lot of flexibility because budtenders in your dispensary do not have to wait behind counters for customers. They can meet your customers as they browse for their preferred cannabis product and make the transaction without having to wait in lines.

Also, you will be able to better capture data and consolidate records, making your dispensary quite efficient. Record-keeping becomes easier, and reports are easily generated. Running a successful dispensary will require some investment in an efficient data capturing and processing system that does not allow compromising of your data.


As the competition increases and prices fall in the cannabis industry, you must differentiate your business from the rest. Apart from price, this can be achieved through the in-store environment in your dispensary, the products you offer, and the incentives you offer to convince first-timers to come back.

Running a cannabis dispensary is similar to running any other business but has its own minor challenges. These challenges mainly have to do with legality issues and public misconceptions. If you have all the necessary licenses and are in a perfect and legally allowed location, you now have to focus on your customers. Start building relationships with the local community, improve your dispensary’s visual appeal to customers, use the best point of sales system available, and give anyone who walks in an unforgettable in-store experience.