How to Run a Successful Retail Dispensary in New York: Getting off the Ground

the sun sets behind the statue of liberty, casting it into a silhouette

Despite the slow rollout, legal issues and red tape, the New York cannabis market is still poised for amazing growth in 2023 and beyond. As more retail licenses are awarded, it’s imperative that both justice-involved CAURD operators and non-profit dispensaries have what they need to be successful from day one. This is our first post in a series entitled “How to Run a Successful Retail Dispensary in New York.” 

There is no shortage of information readily available on the “basics” of getting your New York cannabis retail business up and running. However, there is no one-size-fits all approach to launching your dispensary that leads to long-term success. The best operators in any cannabis market are the ones who think about their business as distinct and unique. One that blends their vision and value proposition with the right operating procedures and tools that enable and enhance their business from the very beginning. 

As you chart your own path as a cannabis retail operator in New York, here are six key takeaways to help you scale and future proof your business:

One way to stand out from the pack is in the experience you provide your consumers. Consider how you want your customers to purchase from you (in-store vs. online), what type of store model you want to design, and what identity you want to craft for your business that ideally leads to high-volume, repeatable business.

One way to learn how to create the best experience is to survey consumers near your retail store location. What are the types of customers you will attract and how will they be best served? Do they need education that requires more interaction with your retail sales associates, otherwise known as budtenders? Are they savvier cannabis consumers who know what they want and prefer to get in and out? Do they prefer more of a guided self-serve model? 

The counter of Garden of Eden dispensary is shown, with three tablets with Treez POS displayed

Takeaway: Choose a store layout that fits your identity and how consumers want to shop.

Double down on creating a unique identity by building your brand from jump. Think of everything from the name of your store to your logo to your store layout to even your signage and marketing materials. Whatever you do, make sure it’s something that reflects who you are and the brand identity you want to create. 

Then ensure that you market that brand. You’ll need an ecommerce store and website that is set up for online ordering and for New York you’ll definitely need delivery capabilities. Make sure your website is powered by an ecommerce provider that can tap into local SEO so that you show up when someone searches for cannabis in your area (more on tech providers further down). The first thing consumers often do once they find a business for their product needs is look them up on social media. Make sure you’re on Instagram, Facebook, Twitter, TikTok and even LinkedIn.

Lastly, once you capture your consumer’s information through the check-in process, start marketing directly to them! Create a rewards program and email promotions to get them coming back. This way you’re building brand loyalty and affinity early on so your customers have you top of mind when other shops start popping up (and they will!).

Takeaway: Create a unique brand and market your business out of the gate.

Be sure to prepare for a steady stream of customer volume in your store as the NY cannabis market continues to open. However, start by hiring only the essential employees you’ll need to meet that high demand. How many employees is that? Your answer will depend on your location, square footage, and how many checkout stations you plan to have.

Among those essential employees, you will certainly need some form of security, perhaps more than one for weekend rush times. That security person can also function as your check-in person, scanning IDs and welcoming your customers into the shop. If you’re able, you could hire employees dedicated to check-in or rotate your budtenders in and out of that role. 

Speaking of which, budtenders will be some of your most critical employee hires for your business. You will need multiple, how many again depending on your store layout and experience. Remember, budtenders should be thought of as your retail sales associates. They should be product experts who have the ability to help consumers find what they need and ultimately make a purchase. They should even know how to pitch additional products to purchase, or upselling, and to encourage customers to use cashless payment options that drive higher average order values (see technology stack section further down).

Lastly, you may want to consider having a retail store manager and even an inventory manager if you can swing it. These roles will help focus on the operational needs of the business and help to streamline your efficiency and increase your bottom line, backed by data driven decision making (keep reading!)

Takeaway: Hire essential employees to get ready for the initial rush and build a scalable operational flow.

Getting your product assortment right is another important success factor for your retail business. That will take time but the best thing to do early on is to start small and start with what you know will sell well. In cannabis, flower is definitely the leader in terms of product category as 60% or more of sales come from flower items. That said, you should still think about other popular product categories to offer, such as edibles and prerolls.

Whichever types of products you ultimately offer, be sure to limit the amount of brands and total SKUs (stock keeping units). The most successful retailers in traditional markets limit choice because it leads to a more decisive and better experience for consumers. We typically advise no more than 100 SKUs at any time in your store.

Ideally, you should start even lower than that, learn what is selling and what isn’t, figure out how to price and discount accordingly and then slowly test and expand your product suite from there.

Takeaway: Focus on products and SKUs that will fly off the shelves and expand slowly.

The technology you choose to use in your cannabis retail business is critical to your success. These tools should help enhance what you do and enable your long-term vision. Finding best-of-breed solutions across key technology categories is strongly advised as these will bring you the focus, service, and expertise you’ll need to drive your business forward. Steer clear of so-called “one-stop shops” who try to offer everything at cheap price points as you will likely not get the attention and results you’re looking for. Remember, your business is unique and can’t be pigeon holed into an all-in-one solution.

The five most important retail technology categories you should evaluate from the very beginning are: point of sale (software and hardware), digital cashless payments, data and analytics, ecommerce and delivery, and marketing and loyalty. Selecting the right point of sale (POS) provider is probably the most imperative as that will be the central operating system for your retail store. Every transaction will flow through your POS and needs to be accurately tracked and reported to the state traceability system (eventually BioTrack for New York) 100% of the time. 

Beyond the above, your POS should integrate digital cashless payment solutions, like ACH and debit card payments, to drive increased sales and higher average order value. The data collected in your POS is immensely valuable and the best POS providers present that data to you in a clear, actionable way that helps you make informed business decisions to increase revenue, increase margins and drive operational efficiency. (see the last takeaway!)

As presented earlier, marketing your business is one of the best ways for you to stand out, drive new business, and create loyal customers. In order to do so, ensure you have a solid website  and ecommerce shop, along with the ability to provide loyalty rewards. You’ll want to find providers who specialize in each and make sure they integrate with your POS to provide a seamless and differentiated consumer experience. 

A web of logos is shown with Treez in the center - surrounding it are logos of other cannabis businesses Treez supports, dispense, bookkeep, springbig, weedmaps, quantumleaf, happy cabbage analytics, cannveya, aplineiq, lendica, seed, headset and canndelta

Takeaway: Select best in breed technology partners who can enable your vision.

Download our “Guide to Building Your Dispensary Tech Stack in 2023”

Perhaps the most underrated and most valuable way to set your business apart and ensure your business’s viable future relies on your own data. As mentioned in the previous section, the data you collect in your point of sale can be used to provide actionable insights that empower every stakeholder in your business from ownership to retail ops to budtenders. These insights help in critical tasks like tracking product performance, assessing the success of promotions, and monitoring customer behavior. And you can start using that data from your very first sale.

With this data, be sure to review which products are selling and increasing your margins and quickly optimize your business by replenishing that inventory. Consider running discounts and promotions on items that are not selling (and analyze how those discounts work!). Identify your top budtenders and help coach those who need additional support to drive additional sales. 

This powerful and intuitive reporting should ideally be available directly inside your point of sale. The best tool will be streamlined and designed with the dashboards and reports you need from the beginning. 

Takeaway: Capture and analyze your data from day one - sales trends, inventory movement, budtender performance

An illustration shows a computer with budtender performance dashboard shown, graphs and rankings show this budtender's position, sales this month, average sale amount, etc.

Checklist Summary of Takeaways

  • Consumer Experience: Choose a store layout that fits your identity and how consumers want to shop.
  • Building Your Brand and Marketing Your Business: Create a unique brand and market your business with these focus areas out of the gate.
  • Hiring The Right Staff: Hire essential employees to get ready for the initial rush and build a scalable operational flow.
  • Selecting the Right Products: Focus on products and SKUs that will fly off the shelves and expand slowly.
  • Building Your Optimal Technology Stack: Select best in breed technology partners who can enable your vision.
  • Using Data to Make Business Decisions: Capture, analyze and make informed decisions using your data from day 1.

As more and more applicants are awarded cannabis retail licenses in New York and go-live in the coming weeks and months, the need to build something unique and different will be paramount. Make sure you’re thinking beyond just the opening of your cannabis retail store. Go beyond the basics and set your business up for success from day one!

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