The increase in cannabis sales at licensed dispensaries in 2020 coincided with the pandemic. Consumers were sheltering in place, and that year, sales of cannabis products through licensed dispensaries were record-breaking. And your dispensary is counting on record sales on 420 too.
Cannabis sales in the United States rose by 46% to $17.5 billion, according to a report from BDSA (market research). In 2021, cannabis sales increased by 40% to over $25 billion. And many industry experts predict that sales will continue to grow in 2022. Dispensaries may process more than $32 billion in cannabis sales transactions this year.
With cannabis sales growing higher each year, dispensaries look forward to record-breaking sales on 420. The official holiday of cannabis culture, which is similar to Black Friday sales volume in the general retail sector.
Dispensaries must plan to cope with the increased sales volume on April 20th. And it is not too late to put some important contingency plans in place to make sales processing on 420 seamless and profitable for merchants.
Backup Your Internet and Dispensary WiFi
In this day and age, internet services do not go down that often. But on a day like 420 when hundreds of millions of transactions occur? Bandwidth, even on the most reliable commercial networks, can be compromised.
How many transactions are we talking about? In 2021, some industry experts estimated that retail traffic increased by over 9%. At Paybotic, our merchants processed 12,561,703 transactions in 2021. With zero downtime!
Make sure you have a hotspot backup plan. Or a satellite ISP or LTE connection in case your local internet service struggles under increased bandwidth from transactions during your peak sales day.
Prepare for ‘Stashing’ and Post Holiday Sales
Many consumers want to purchase cannabis products on 420. It is part of the culture to visit a local dispensary and social events to celebrate legalization and responsible use. And the incentives, of course, are a big draw for consumers looking for discounts and special offers.
Surfside is an expert provider of advertising services to the cannabis sector. The company completed an e-commerce transaction analysis from January to June 2021 that revealed some interesting insights:
- Cannabis sales on 420 were more than 150% higher than average daily sales in dispensaries.
- April sales of cannabis products were 12% higher than in Q1 of 2021.
- “Stashing” or pre-purchases of cannabis start 3-4 days before 420 annually. Some consumers want to avoid crowded dispensaries on the holiday.
- Consumers may continue purchasing to take advantage of sales or incentives the week after 420. Even if they have unused products at home.
- Pre-rolled cannabis products increased +166% on 420.
- Sales of edible cannabis products increased +154% on holiday.
- Whole-flower (bud) cannabis sales increased +127%.
Part of an effective strategy to manage the flow of consumer traffic on 420 is utilizing pre-holiday promotions. That way, your dispensary can realize sales goals over a more extended period of time instead of condensing on April 20th at your retail location.
Limit the Number of People in Your Dispensary
Creating door crasher promotions is the norm on 420. And consumers get excited about special offers that can extend their buying power. Or gifts and loyalty rewards. Even though promotions can start as early as one week before 420, chances are you’ll be dealing with a big crowd of customers on holiday.
Remember that the safety and security of your customers and staff come first. That can mean limiting the number of customers you allow into your dispensary, even if that number is lower than the approved occupancy load for your commercial space. It is easier to manage the flow of customers and provide a faster checkout process if there are fewer people waiting in line.
Some retailers develop incentives for curbside pick-up of orders. At the beginning of 2022, some states like New Mexico prohibited curbside pickup as an option for dispensaries. In other states, dispensaries and third-party service providers can offer secure delivery. From the dispensary to the customer’s (or patient’s) home.
Special BOGO or discount offers for curbside pickup (where permitted) can help you divert the crowd inside the dispensary. Without throttling your sales volume on 420. And if you are worried about turning away customers, consider that a line up out your door implies the deals are worth the wait. It may draw more customers to your dispensary.
Pick the Right Partner for Cannabis Dispensary Payment Processing
The 420 promotional holidays could be the worst time to find out you have a payment processing problem. Financial service providers are tested every year during peak cannabis sales periods. And there is not one single day that is busier (in terms of payment processing) than 420.
Two companies recorded a lapse in services on April 20, 2021. Greenbits API crashed, leaving merchants without payment processing and POS access. Flowhub is another leading provider of POS, inventory, and retail management software services. The platform also crashed on April 20, 2021, leaving some merchants without services for over four hours.
Payment processors provide a “crash kit,” which is instructions for retail staff to manually process financial transactions when the system goes down. Being prepared for the worst is a good thing; but we think preventing service interruptions from occurring, is what matters most to merchants.
Do your research when picking a payment processor to find the most reliable network. And also a company that provides 24/7 technical support to merchants. Paybotic has earned a reputation for providing worry-free payment processing for the cannabis industry. Our record of ZERO DOWNTIME is an industry first and the reason why thousands of dispensaries nationwide choose to grow their business with Paybotic financial services.
Learn more about payment processing and financial services from Paybotic.
Schedule More Staff for the Holiday
Standard Operating Procedures (SOPs) for peak sales days should be established before 420. Experienced dispensary managers know that extra budtenders and cashiers will be needed the week before and after 420. And that is to manage both “stashers” and overflow of sales (thanks to incentives and discounts) that continue after the cannabis holiday.
Train your budtenders thoroughly for customer service and upsell other products or special offers available on 420. And consider incentivizing per purchase sales for your budtenders and team. Create a contest to keep it fun, and reward your top-grossing salespeople.
On behalf of all of us at Paybotic, we wish our merchants a happy and prosperous 420.
Featured Image: “Terpene Station Marijuana Dispensary in Eugene, Oregon” by Only in Oregon is marked with CC BY 2.0.