The Dos And Don’ts of Operating A Successful Cannabis Retail Store
Operating a cannabis retail store is no easy feat. Often it is thought that obtaining retail licenses is the biggest hurdle in getting into cannabis retail. Navigating the retail license pathway certainly has its challenges. Setting up and maintaining a compliant and profitable cannabis retail business also brings a different set of challenges. Here are some do’s and don’ts to keep in mind to operate a successful cannabis store.
Keep yourself up-to-date on the regulations
Cannabis regulations whether provincial or federal level evolve as the industry matures. Reading cannabis regulations once is not enough. It is important to periodically check the province’s requirements and regulations governing the cannabis industry.
Know your ongoing operating costs
Cannabis inventory is not the only line item that must be included in the operating budget. While this may be a big proportion of the budget, there are three items that are often overlooked:
- License renewal fees
- Staff training
- Store maintenance and compliance
Pay attention to your customers, not your competitors
Understanding the market landscape is important, however, make sure you do not lose sight of your own brand and vision. It is a slippery slope to start thinking “we want to be like Cannabis Retail X”. The key is really about knowing your customers in your location, and thinking about and listening to what they want and expect.
Be able to pivot (when necessary)
Retailers are bound to make poor inventory investments or have a slow month. Successful retailers analyze these situations as opportunities to learn from versus dwelling on what occurred. It is important for you to move forward as your customers already have. As more new and innovative products are launched in cannabis retail, understanding when to pivot inventory and product portfolios versus maintaining existing products is not an easy decision. When faced with this situation, it is best to lean on data – customer and cannabis retail store data. This is often available through the province’s regulatory body.
Do not overlook the license and renewal fees.
Licenses are good for a 2-year term. Renewal fees apply thereafter for a new 2 year term and total to $8000 every year. Currently, renewal fees are as follows:
- Retail Operator License (ROL): $4,000
- Retail Store Authorization (RSA): $3,500
- Retail Manager License (RML): $500
Do not be a fickle pickle in inventory.
Not having a handle on inventory is a common pitfall in cannabis retail. The current system requires ordering inventory through the Province, which adds to lead time and impacts availability. This aspect of obtaining inventory must be incorporated in planning and inventory management. Not having a consistent and accurate inventory can prevent you from keeping regular customers. Consumers come to stores because they expect to get the product right now. It is important to bring in new products, but it is equally important to have regular products.
Do not neglect your employees and store(s)
The biggest mistake retailers make is not looking after stores or their people, rendering them unable to look after customers. Recognizing the value of employees contributes to a successful cannabis retail store. A great indicator that reflects that employees are valued is the availability and frequency of training. Training should not only be done upon hiring but should be done regularly. Staff can be trained in operational procedures to customer service updates to product training to seasonal staff meetings and more. As employers, it’s key to understand this reality and train employees to best represent their stores.
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