This document includes real stories of dispensaries and their challenges/pitfalls. Learn from the past mistakes of cannabis retailers to ensure the security and survival of your cannabis dreams. https://getgreenline.co/case-studies/top-15-mistakes-kill-cannabis-retailers/

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Top 15 Mistakes that Kill Cannabis Retailers
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Cannabis retail is a young and dynamic industry plagued
by easily avoidable pitfalls.
GetGreenline.co has seen the ups and downs of more than a hundred cannabis retailers.
The industry today is still constantly in motion with new federal and local legislation and
ever changing industry standards.
We have compiled​ ​15 of the most common mistakes​ made by businesses in this
document to help cannabis retailers optimize operations. Why experience these roadblocks
first-hand when you can learn from the mistakes of others? GetGreenline’s goal is to
strengthen the cannabis retail industry by informing business owners of potential mistakes
that can kill their cannabis dreams.
*Stories told in this document are real events. Names of particular persons, locations, and brands
have been withheld for confidentiality purposes.

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1. The staff is unprepared for the wide range of clients.
Cannabis is medicine to many customers, and staff should be well versed in client needs
and the appropriate choices of product.​ ​Many customers require cannabis as medication
for mental health and can appear agitated and confrontational. ​Storefront employees
working in cannabis retail must be knowledgeable in compassionate care and how to
serve clients with disabilities.​ ​It is important that staff attitudes and speech be catered to
the client’s emotional needs. The worst thing an employee can do is sell instead of serve;
the primary goal should be to serve the customer’s needs, not to up sell the client on
product.
2. Employees do not have a set of operating procedures in place.
How should employees deal with difficult/aggressive customers? Is there a cash drop
procedure? What does the team do when they sell the last bit of product? ​Plan and
establish steps for employees to follow so they can have the comfort and security of
falling back on pre-designed procedures.​ Even with no managers on site, the staff should
know how to run the front of house efficiently based on pre-set operating procedures.
“​A customer with a mental disability walked into a cannabis retail store and speaks loudly
and erratically to an employee at the counter. The sudden movements of the customer
spooked the employee and the police were called. The incident reflected poorly on the
store, and the business took a significant hit to sales and sign ups for three months.​”
These incidents could be easily avoided if staff and management had proper
compassionate care training and customer service procedures​ to determine if a
customer poses a real threat or is simply exhibiting symptoms of their conditions, for which
cannabis provides relief.

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3. Low store morale due to lack of leadership.
“​A small but rapidly growing
dispensary had just received
municipal approval for a second
location. Excited about the
opportunity, the owners and
senior manager focused most of
their attentions on the fresh
location, neglecting employee
management and training in the
first store. Over the next three months of focusing on the new store, employee
accountability and adherence to procedures were damaged in the first location. This
created an environment that encouraged stealing, and over those three months the
business lost over $10,000 in product due to internal theft.​”
In order for employees to properly care for customers, they must also feel cared for.
Managers should be champions for worker needs. If management is not in touch
with staff regularly, procedures can start breaking down and discontent can spread
quickly. ​This is dangerous in cannabis retail if accurate compliance is compromised as a
result of poor procedure following. Furthermore, low employee morale will damage
customer service quality and your retail business will lose recurring clients over time.
4. Poor data security leads to inaccurate compliance reporting.
Besides creating good passwords and operating procedures for data entry, retailers must
restrict access to sensitive store data.​ ​Customizable user security roles on your POS will
limit the functions staff have access to, and is critical to maintaining store data
integrity. ​New hires should not have full access to discounts right away, and cannabis
retail chains may wish to block branch stores from seeing company-wide reports. This is
why GetGreenline POS comes with customizable employee and locational security locks.

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5. Product data accuracy is lost during conversions, purchasing, and transfers.
Weight loss due to processing and transfers is often overlooked in smaller operations, but
can result in large cumulative losses in accounting and compliance. To help with stock
verification, ​make sure that the team performs​ ​regular stock checks and frequent
item spot checks.​ ​Your POS needs to have a location based auditing function, weighted
conversions and transfer loss tracking to establish a reliable inventory system.
“​A cannabis retailer running five separate
stores and warehouses was constantly
missing product from their inventory. Their
stock management system had no way of
tracking transfers and manage separate
storage locations. After consulting with
GetGreenline, they discovered that transfers
between warehouse 2 and store 3 were
losing product due to internal theft.​”
Accurate multi-location inventory tracking is critical for your store’s operations.
Without it, you will have no idea when, where, and why cash and stock inconsistencies are
happening in your business. Every cannabis retailer must have a reliable POS that is able to
handle tracking between all branches of the business, from purchase and processing to
customers at final sale.
6. The POS software can’t keep up with incoming legislation.
Do your software providers know what laws you need to comply with? If not, how quickly
can they address new compliance requirements? Never compromise your licence due to
non-compliant software. ​Ask your POS provider if they can satisfy your compliance
needs.​ ​The fastest way for a cannabis retailer to fail is by not having the compliance tools
they need.

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7. Not looking 2-3 years into the future.
Dispensaries with a cash grab mentality do not fully understand the potential size of the
industry, and only act on the short term. ​Invest back into the business and make sure
that proper scalable operating procedures are in place. ​For example, store owners
should invest in items like decent computers to shorten client wait time, as well as interior
design for store presentation. The look of your store is important for remaining
competitive in acquiring and retaining new customers.
8. The POS can’t track product movements across multiple locations.
The use of safe storage locations seperate from the retail environment is key to minimizing
risk. As a result,​ ​your POS must be able to manage multiple locations and separate
inventory pools.​ ​Additionally, the software needs to accurately track movements of
product across these locations and be able to adjust the stock in case of product lost
during transit.

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9. No visibility on exactly how much inventory is at any given location.
Inventory visibility improves internal security and allows business owners to catch, prevent,
and accurately account for losses due to theft.​ ​Your POS needs to accurately track and
report all movements of cash and inventory at all times, across all locations.​ The
software should record the actions performed for record keeping in case of any
mismatched reports, allowing users to review them and catch any inconsistencies. Have
absolute control over your stock, know what you have and where you have it, whenever
you want.
10. No limit on front of store stock and not making use of safes and storage areas.
Theft hurts stores and ruins expansion goals. Minimize the pain by limiting stock levels at
the front of store. Stores may lose hundreds of thousands of dollars in a single night if risk
is not distributed across multiple locations.​ Cash and inventory needs to be regularly
transferred and stored in safe holding locations,​ separated from the retail environment.
Transfers between these storage locations and the front of store should happen daily, and
remember to never leave inventory in store overnight. Cash amounts in the register also
need to be managed on a regular schedule by creating cash limits. Once a limit is reached,
staff need to do a cash drop from the till to a safe.

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11. Poor customer retention offers and rewards programs.
Referral points and in store credit are great tools for expanding the customer base without
explicit advertising. ​Rewards in the form of in store credit on purchases will help
stores foster a loyal customer base.​ ​Loyalty tiers for medical users, veterans, recreational
users, etc. can increase positive customer engagement and provide healthy visibility of the
store in the community. An enticing customer reward program is an essential part of any
good branding/marketing strategy.
12. Underestimating marketing and branding work.
Most users already have a source for their cannabis and in order to grab their attention,
they need need to be aware that your business exists. ​Securing a retail location doesn’t
automatically mean success, there’s always work to be done on growing your
customer base (marketing) and establishing your business voice and goals
(branding).​ Online presence is critical for marketing and branding work. Establishing a web
store and adding your business to the local directories (Weedmaps, Leafly, Google business
pages) will improve visibility of your retail location.

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13. Poor presentation of the cannabis retail environment.
The look and feel of a cannabis store can make the difference between surviving and
closing down.​ The retail storefront must feel safe, clean, and accessible from the
outside. ​This means increasing visibility with large windows, good interior lighting, clean
air, and unobtrusive security measures. Barred windows and doors often contribute to an
uncomfortable, illegal atmosphere.
“​A cannabis retailer recently got shut down by the local authorities due to a number of
complaints filed against their store. The city was home to four cannabis retailers, all of
which are operating under grey market conditions until Spring 2018. This allows the
municipal and provincial governing bodies to enforce existing cannabis laws when they
choose. Essentially, the stores in the area are tolerated, but not fully licenced. The only
reason why this particular cannabis retailer was shut down by the city was due to the
negative effect it had in the community.​”
The complaints included:
- Loitering and cannabis use at the front door affecting surrounding businesses.
- Poor parking management leading to blockages in traffic and other stores.
- Smoking cannabis inside the store, breaking indoor smoking bylaws.
- Using the backyard of the shop as an employee and friends smoking area, right next
to ventilation for the other storefronts.
After these four complaints were filed by the affected community, the store was shut down
by the local authorities. ​This closure would not have happened if the retail owners
were more mindful of their neighbours and how the store activity affected others.

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14. Manage how employees and clients use the store space.
The behaviour of people in a cannabis store is just as important as the physical appearance
of that store. Consumption of cannabis in and around the front door can lead to negative
feedback from neighbors. ​Make sure that customer parking and behavior around the
retail environment is considerate of other residents and businesses. ​Annoying the
community is a sure way to get complaints filed against a cannabis store. Having many
complaints filed against a store can lead to the closure of a cannabis business.
15. No participation in the community or communication with neighbours.
Cannabis businesses that participate in community outreach and actively engage with their
neighbors have a higher chance long term survival. Because the local culture might still not
be educated on cannabis use and its benefits, it is the cannabis retailer’s responsibility to
promote a positive and open atmosphere. ​Engage the community by holding
information sessions, learning lunches, or free consultations. ​If the capital is available,
sponsoring local events is also a great way to make a brand known in the community.

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Summary
Team Management
● Adequate employee training
○ compassionate care training
○ selling instead of serving
● Establishing operating procedures in place for employees to fall back on
● Leading by example and become a champion for employees
Data Security
● Restrict inventory data editing permissions
○ maintain security control over data integrity
● Manage waste and weight losses
● Establish regular inventory audits and stock spot checks
● Validate that the technology solution handles compliance
● Plan for the future
Inventory Security
● Establish in store security protocols
○ regularly scheduled cash drops
○ make use of inventory safes and storages
○ create cash/stock limits in the front for risk prevention
Branding and Marketing
● Plan for growth and customer retention
○ consider online avenues for digital marketing and branding
○ build loyalty programs to create and retain lifetime customers
Atmosphere and community
● Provide a safe and professional space in the cannabis retail environment
○ create a clean and well lit physical storefront
○ manage customer and staff behaviour in and around the store
● Engage in the community
○ participate and host events in the community
○ provide educational seminars or info sessions on cannabis use

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