Those of us old enough to remember can recall a time when the words “coffee shop” conjured up the image of a bustling sidewalk café rife with intelligent conversation – the likes of which could only be found in cities like Paris, Berlin or Rome.
So with the massive coffee shop boom of the 1990s, entrepreneurs in the U.S. confidently got on board, firm in their belief that they’d struck easy gold. And some of them did.
Some being the operative word.
Today there are about 14,000 Starbucks in the United States, with the ongoing joke being that the next one will open inside an already existing store. And that’s just Starbucks.
So what made Starbucks such a wildly successful business? Well, yeah, great coffee and solid business practices helped. But they also knew a little something about branding.
And as the legalization of recreational marijuana in Michigan inches closer to reality, marijuana dispensaries are fast becoming the next gold rush for entrepreneurs.
But those who grasp the importance of branding for marijuana dispensaries are far more likely to succeed than those who don’t.
Opening a Marijuana Business Is Not a “Given”
In spite of the tremendously explosive growth of this industry in states where recreational marijuana is already legal, there are always risks with boom industries. Right out of the gate, startup costs are high. And finding and keeping reliable employees is no cakewalk.
Then there are all the regulatory risks of running a dispensary. Getting a license can be difficult, while losing one and getting shut down isn’t. Marijuana businesses must remain compliant with ALL state and federal labor laws as well.
Most successful dispensary owners find that being vertically integrated is ideal. That’s why Barton Morris Jr., an attorney whose Royal Oak law firm Cannabis Legal Group conducts seminars for marijuana entrepreneurs, advises these operations.
Morris says, “vertically integrated operations — those that first cultivate the marijuana, then process it, and finally sell it at their own retail outlets — stand a better chance of success than those that operate in just one segment of the industry.”
And as the market gets quickly saturated, competition will be stiff. This is where the branding makes the difference.
Branding for Marijuana Dispensaries Should Be a Serious Focus
The most effective way to stand out in a crowded and highly competitive market is through branding. And that’s exactly what they’ve done at The Reef, a medical marijuana dispensary on East 8 Mile Road in Detroit.
Unlike some of the other sketchier dispensaries that populate the long stretch of 8 Mile Road, the first thing you see when you walk into The Reef is a comfortable waiting room.
“Anyone can have quality product,” says Rush Hasan, operation controller for the outlet. “But really that customer experience of feeling at home, providing a nice space instead of it feeling like an office space, is kind of what we were going for.”
And that feeling carries though the entire dispensary with an upscale sales area and friendly employees who counsel individual customers – known affectionately as “budtenders.”
The Reef has around 30 budtenders who create a chilled, no-pressure ambiance. “We never tell our budtenders to push them for a quick turnover because that’s what builds that customer experience,” Hasan says. “We provide that extra time to help educate them, to find the specific product that can target their pains.“
Creating a Solid Brand Requires Constant Attention
Of course, it’s not enough to make a pretty waiting room and hire smiling faces. Profitability of individual products must be considered.
Evan Pilot, The Reef’s financial controller, noticed that among their vast inventory, there were some things slipping under the radar that were being sold below cost. This was hurting their margins. So Pilot built models, spreadsheets and figured out their profitability margin so they continue to improve upon that moving forward.
The bottom line?
“Those who operate efficiently, that brand properly, and that know what they’re doing, they’re the ones who are going to be successful,” said Morris. “The ones that don’t know what they’re doing, or don’t learn how to do it before they begin their operation, they’re going to have more difficulty.”
Yeah, branding for marijuana dispensaries matters. And ultimately, the dispensaries that are proactive, follow the rules and able to prove they deliver real value to the community will be the ones that thrive.
So if you’re serious about getting your business off the ground and are interested in industry specific marketing and branding for your cannabis company, please contact us today. We promise not to use the phrase, “It’s 4:20 somewhere.”