Becoming Your Neighborhood Cannabis Retailer
The Dispensary Invasion
The legalization of recreational marijuana has uncovered a consumer demand that continues to grow every day. Growing nearly as quickly are the number of dispensaries looking to meet this expanding demand. While the total number of U.S. legal marijuana dispensaries is hard to pin down, it is in the ballpark of 2,000. As of May 2019, in my state of Oregon, there are approximately 700 operating dispensaries. This number does not include all of the pending applications. In Portland alone, there are about 300 operating cannabis retailers; approximately 1 store for every 1,000 people over the age of 21. That’s a lotta’ weed.
As legalization spreads across the country, the number of retailers will certainly increase. Many growers and current dispensary owners are worried about market saturation. They have good reason. Legalization of recreational cannabis almost immediately decreased the average price of marijuana. Oregon and California are faced with (literal) tons of surplus that, due to government restrictions, cannot be exported to other states. Rather than destroy surplus crop (per legal requirements), many growers are selling to the black market. Unfortunately, this cannibalization of the market hurts everyone, particularly small shops. With a dispensary on practically every street corner, how does one compete?
Embrace Your Neighborhood
Cannabis retailers aren’t feeling the online and delivery squeeze that other brick and mortar shops are experiencing…yet. Customers actually have to walk into your store to make a purchase. More often than not, those customers will live or work within a one to three-mile radius of your store. Your customers are also your neighbors and they are the key to a healthy business.
Whether they wanted a dispensary in their neighborhood or not, fate has brought you together (and probably a reasonable lease agreement). Find out as much as you can about the demographics of your neighbors. What is their average age? What is their average income? A lot of this information you can find online from census resources. If you can, work with a third party to gather psychographic information — values, opinions, attitudes, interests, etc. All of this data will help you define your target consumer. Once you have your target, you can narrow your focus when it comes to advertising and marketing efforts.
Take a look at some other ways you can position yourself as the go-to cannabis retailer in your neighborhood:
If you need any help getting started, feel free to contact Tabor Consulting: michelle@taborconnect.com
Good luck!
