Unlock dispensary growth

Why Dispensary Growth Platforms are the Future of Cannabis Retail Success

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dispensary growth platform

The old way of running a dispensary is broken.

Recent data indicates that the cannabis industry is poised for remarkable growth with a projected Compound Annual Growth Rate (CAGR) of 24% over the next five years.

Analysts predict that the legal industry will generate over $71 billion in sales by 2030.

Legal cannabis sales growth 2024

However, as the industry matures, it is becoming increasingly clear that not all dispensaries will thrive.

Prices are compressing and brands are consolidating. BDSA Retail Sales Tracking found equivalent average retail prices (EQ ARP) dropped -32% from their peak in Q3 2021 to Q2 2023. This price decline, along with inflation which has increased costs for labor and materials for licensees, has made the industry even more competitive.


According to Whitney Economics, 27% of cannabis operators are profitable.

Many dispensary owners and operators are realizing that the last decade’s playbook for running a dispensary business just doesn’t work anymore.

It used to be that selling legal cannabis was enough to be successful. Those who offered the best products at the lowest prices were able to survive.

But now, dispensaries are finding themselves in a discount death spiral in an attempt to attract consumers who now have ample choices and high expectations about how and where they shop for cannabis. There are far too many undifferentiated retail competitors chasing increasingly picky demand, making it harder than ever to retain a loyal customer base.

This fierce competition is compounded by ongoing industry-wide challenges, including:

  • regulatory complexities

  • operational inefficiencies

  • data management issues

  • limited access to banking and financial services

As a result, legacy dispensaries are experiencing stagnant or declining growth. Cannabis retailers need a better way to run healthy, stable businesses — or risk going out of business entirely.

The new dispensary growth framework

Although cannabis retail is tough, here's the silver lining: It’s possible to run a profitable dispensary business.

To win in this competitive landscape, dispensaries must have a sustainable strategy for growth.

There are 4 core ways to grow your dispensary:

  1. Acquire new customers: Gain market share in your existing market.

  2. Get more from existing customers: Increase average order value and increase repeat customers.

  3. Reduce cost of operations: Capture existing market share more efficiently.

  4. Expand locations: Go after a larger portion of the market by opening new stores.

Ways dispensaries grow

Central to these growth strategies is the fundamental principle that profit and growth hinge on a predictable, loyal customer base.

To create a predictable revenue model, you must intimately understand your customer and create specialized experiences that appeal to the buying patterns of the most high-value customer segments.

This means finding a niche where you can sell more products to a narrow customer set instead of a narrow product to a wide set of customers.

According to New Frontier Data’s report on Cannabis Consumers in America 2023, potential new cannabis consumers in adult use markets include:

  • Age 65+

  • Women

  • Suburban residents

  • Bachelor's degree education

  • $100k+ income

Leveraging the virtuous cycle of dispensary growth

Dispensaries can continuously determine what will resonate with high-value customers by employing a virtuous cycle of dispensary growth. With each successful customer experience, dispensaries garner more resources which, in turn, increases the potential for greater and greater returns.

Here’s how it works:

    Dispensary growth cycle
    • Actionable data insights: Centralize and analyze data to deeply understand the preferences and behaviors of top customer segments.

    • Inventory optimization: Use the insights gained to curate a product selection that resonates with your target audience. This step involves not just choosing the right products but also managing inventory efficiently to meet demand without overstocking.

    • Strategic promotions: Craft promotions and marketing campaigns that complement your inventory assortment. Drive awareness and engage target customers effectively across digital and physical channels such as website, email, SMS, push notifications and in-store activations.

    • Positive experiences: With the right products in place, focus on delivering an exceptional customer experience that drives repeat business. This could include personalized service, streamlined purchase processes, or differentiated purchasing options.

    • Positive cash flow: Loyal customers are more likely to make frequent purchases, thus increasing sales. The increased sales and cash flow provide an opportunity to optimize strategy and reinvest in the business.

    Top dispensaries use this cycle to adapt to changing market conditions and customer needs while steadily improving operations and financial performance. In this new era of efficient growth, we need to use data to optimize processes, identify and cut waste, and adjust investments.

    To help accomplish this, retailers need complimentary software and tools built for dispensary growth — we call this a Dispensary Growth Platform.

    The Dispensary Growth Platform (DGP)

    Not only do you need the right growth strategy in place, you also need the right tools and partners to help take you where you want to go.

    Without a doubt, the single largest enabler of dispensary growth is technology.

    What is a Dispensary Growth Platform?

    A Dispensary Growth Platform (DGP) is the new category of cannabis technology focused on helping dispensary businesses acquire, monetize, and retain customers, scale and expand efficient retail operations, and seamlessly integrate with critical systems to unlock new growth opportunities while maintaining compliance.

    More than a simple Point of Sale (POS) system that can process transactions, DGPs are transforming the cannabis retail industry by addressing critical challenges faced by dispensaries and empowering them to grow and succeed in a competitive market.

    What are the core capabilities of a Dispensary Growth Platform?

    • Global retail operations: Standardize and customize store configurations to seamlessly operate multiple locations across states with varying regulatory requirements from a central platform.

    • Intuitive, flexible Point of Sale (POS): Easily process POS transactions, train others, and accommodate a variety of retail models and hardware spanning brick-and-mortar stores, order ahead, delivery, consumption lounges, and pop up events.

    • Dynamic compliance infrastructure: Automate compliance with built-in reporting to state traceability systems like Metrc and BioTrack, and protections like purchase limits and age verification checks, reducing the risk of non-compliance and legal issues with the ability to adapt to regulatory changes on the fly.

    • Streamlined inventory management: Accelerate inventory management processes like imports, audits, adjustments and transfers with an accurate global product catalog, ensuring real-time visibility into product stock, reducing discrepancies, forecasting demand, and optimizing inventory levels to prevent loss.

    • Pricing and promotion management: Granularly manage pricing strategies for product variants and customer groups while automating dispensary promotions from a global deals engine.

    • Loyalty programs: Incentivize repeat purchases with a fully customizable accrual and redemption program by store, med vs rec, or customer groups.

    • Integrated payment processing: Securely and reliably process non-cash transactions, including physical card payments and digital payments.

    • Customer relationship management: Maintain a database of customer information, track interactions, and personalize services to enhance satisfaction and loyalty.

    • Budtender intelligence: Unlock personalized product recommendations for customers and patients, set goals to upsell, cross-sell, and improve sales performance while gamifying the experience for budtenders.

    • Centralized data and analytics: Gain fast insights into sales trends, inventory levels, employee performance, and customer behavior to make strategic data-driven decisions that improve operational efficiency.

    • Open API ecosystem: Interoperate with critical systems such as ecommerce, marketing, and analytics tools with your DGP at the core.

    Flowhub marketecture dispensary growth platform

    What are the benefits of using a Dispensary Growth Platform?

    A DGP has focused capabilities aimed at enhancing key areas of a cannabis retail business. By leveraging a DGP, dispensaries gain the following benefits:

    • Increased revenue

    • Reduced cost of operations

    • Managed risk and compliance

    • Modernized customer experiences

    • Speed to value

    • Flexibility and mobility

    • Scalability

    These are tried and tested results seen by hundreds of dispensaries across US markets. From single location operators to MSOs, the DGP drives positive outcomes.

    Here are real life dispensary growth success stories:

    • Thrive finds longstanding success and peace running 6+ dispensaries 24/7

    • Green Point Wellness achieves 2.5x multi-store revenue growth

    • Silverpeak builds a sustainable dispensary growth model for 8+ stores across 2 brands

    • Dazed redefines the cannabis retail vibe with strategic East Coast expansions

    Thrive pos large

    In my opinion, we’ve reached success. We don’t have any debt or conflicts — which is unique in this market.

    Mitch Britten, Managing Partner & CEO at Thrive

    Join the next generation of cannabis retail

    The cannabis industry is evolving, and only dispensaries that adapt will survive.

    The Dispensary Growth Platform (DGP) is ushering in a new era for cannabis retailers, addressing challenges and empowering dispensaries to capture market share, enhance customer experiences, and achieve sustainable growth.

    Flowhub is the dispensary growth platform for high-performing cannabis retailers. We help dispensaries grow a compliant, efficient business by providing fast, reliable, and easy-to-use solutions purposefully built for the evolving cannabis industry.

    Flowhub is committed to helping cannabis retailers succeed in this competitive landscape as the driving force behind the DGP movement in the cannabis industry's journey toward profitability and excellence.

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    Ready to grow?

    Learn how Flowhub’s Dispensary Growth Platform can help unlock the next phase of your cannabis retail success.

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    Discover a new way to sell cannabis

    Flowhub helps dispensaries run fast, smooth, and compliant business operations.