I opened my first medical marijuana dispensary, Berkeley Patients Group (BPG), in 1999. Right from the start, my charismatic co-founder Jim McClelland pushed one clear goal: to provide members with the best cannabis. It helped that Jim was a cultivator, producing particularly delicious and dependable cultivars of Romulan and Bubbleberry from his Oakland warehouse.
This simple mission drove our team to create a menu full of potent and pure flowers and to seek out the finest hashes and ingestible forms of cannabis for our patient members. It was in a race to the top, but we never scrimped on quality. We stringently avoided any rush to commercialize the cannabis market or to homogenize the products.
The goal was also to help people enjoy life, with cannabis acting as both social and physical lubricants. In fact, all dispensaries back then had active event calendars, filled with activities to attract vibrant memberships. Dispensaries also provided direct assistance to patients. California law back then even mandated that dispensaries act as “caregivers,” providing for the “health, safety and housing” of their members.
When Jim passed away a year into the project, the importance of dispensaries really hit home for me. They were far more than retail shops; the social club aspect was equally important, providing an outlet for people who were critically and terminally ill to enjoy themselves. Dispensaries acted as sorely missing homes-away-from-homes for people, when they needed it most.
I left BPG after 10 years, and took over leadership of Magnolia Wellness, a newer dispensary in Oakland, Calif., in 2014. This scrappy city, with its diverse population and thriving social scene, suited my desire to prove that dispensaries were far more than simply retail outlets. After all, Magnolia’s founder, Dave Spradlin, had modeled the dispensary on BPG, which made it an easy transition for me. Today, Magnolia has a social calendar filled with exciting events, a menu of exceptional products and a vape lounge where clients can hang out and consume cannabis. And, it’s renowned for social responsibility and cutting-edge politics, often leading local regulatory changes that improve dispensary rules.
It’s not easy running a socially responsible, politically active, fiscally sound dispensary; on the contrary, it’s nearly impossible. Few will reach this goal, especially without guidance from industry experts willing to share knowledge and to coach and mentor entrepreneurial, like-minded people. With that in mind, I offer this list of my top operational challenges, and solutions that make them easier to manage.
1. Inventory Management
Challenge: Creating a stand-out menu
Solution: Doing competitive analysis is key; you have to know what other dispensaries have on offer and at what price. Use this intelligence to create a menu that has a mix of standard products, like Kiva Confections Blueberries, and items that are exclusive and available only at your shop. Making strong connections with suppliers is key, as you will have to convince them that your dispensary is the best place to feature their products.
Challenge: Keeping stock consistent
Solution: Watch sales closely and know what products move consistently. Clients will expect these to be available every time they shop, and they will be disappointed if you don’t have them in stock. They may even go somewhere else next time. Make sure to order more of these items than needed each week, so shelves don’t go bare. Keep good relations with distributors, so you can get special orders if you unexpectedly run short.
Challenge: Buying wholesale cannabis
Solution: Dispensaries buy cannabis on net terms, on consignment and cash on delivery. Maintain good relationships with wholesalers, so your inventory manager/purchasing agent can stock a large range of products without having to go out-of-pocket for everything at time of purchase. You will have a larger inventory and access to more unique products by maintaining a variety of payment terms with vendors.
2. Staffing the Dispensary
Challenge: Finding excellent employees
Solution: Start with clear job descriptions, detailing the knowledge, skills and abilities each position requires, and post these listings in places that people with these skills will see them. Do ranked phone interviews, and select only clearly experienced people for in-person interviews. Ask tough questions at the in-person interview, so you can get a feel for each candidate’s personality. When you find the right person, give them a written job offer outlining pay, benefits and performance expectations.
Challenge: Training staff
Solution: Provide each new employee with a staff manual that clearly explains all company rules and expectations of job performance. Create department-specific training programs, so that each staff member knows exactly how to do their job. Identify staff mentors to work with new employees during a 60-day to 90-day probationary period. Unskilled, unprofessional people make other employees uncomfortable and will reduce overall productivity—so be discerning, and terminate those who either can’t do the job or are not a good fit during probation.
Challenge: Retaining the best people
Solution: Once you find great people, work hard to keep them. Talented, satisfied workers are the key to driving sales and maintaining excellent customer service. Pay and benefits are a big part of this, so make sure to offer competitive wages with raises, regular bonuses and good benefits. The best employees will stick around if you offer health insurance, paid vacations, sick pay and, eventually, a retirement plan. You will also need to create a vibrant workplace, or the best pay and benefits won’t matter. Use your team’s talents to the maximum. Create space for innovation, help implement great ideas generated by staff, and demonstrate again and again that each individual person on the team is essential to the whole.
3. Marketing the Facility
Challenge: Standing out from the crowd
Solution: Know the competition, and always strive to be better. Take time to research and create a marketing and brand management plan, and spend your budget strategically. Design a beautiful logo, develop a style guide and create a physical space that will blow people’s minds. Hire the best possible inventory management team to seek out and secure amazing cannabis products. After all, your clients expect the best, and each brand on the shelf is a potential marketing partner. Geo-target your marketing efforts to attract locals, and draw them in with a mix of connoisseur products, loss leaders and great deals. Differentiate yourself from the crowd by looking better, being more efficient and having the best cannabis, always.
Challenge: Finding places to advertise
Solution: Dispensaries violate the terms of use on every social media site, so this is ultimately an undependable way to market your company. Many of us have felt the pain of losing our Facebook, Instagram and YouTube pages without notice—made especially painful to those with large and dedicated followings. With that in mind, use your social media to drive traffic to your website, and make sure it’s dynamic and interesting so people visit it again and again. Make sure your real-time menu is there, with use an online express ordering cart. Dispensaries also can’t advertise on social media, so local print media is the best place for this, and billboards are a fun way to promote dispensaries, if allowed in your municipality. Make sure you collect your client’s emails, as blasts and newsletters are a great way to drive traffic.
Challenge: Getting earned media
Solution: Television, print and online media are all interested in the marijuana market, and you can become the go-to expert. Host events and invite the media, give interviews on 4/20 and Black Friday and proactively reach out to comment on important topics. Media outlets are all looking for an interesting setting for their story, and your dispensary can be it (pending your local/state regulations, especially in medical markets). You have to be visible to get coverage, though, so get out there and start making waves.
