How To Increase Dispensary Profits | 8 Easy Tips and Tools

As a cannabis business owner, opening and running a store is the first step to cannabusiness success; however, that store must make a profit and thrive to stay alive. 

With the prediction that the cannabis industry market value will be $82.9 billion by 2025, opening a cannabis dispensary is a profitable venture to explore but the everchanging nature of the industry poses several challenges. 

One of the significant challenges that dispensary owners face is unforeseen costs that arise in the form of: 


  • High application and licensing fees
  • Difficult managerial requirements
  • Rigorous financial reporting 
  • Strict regulations
  • Restricted location zones 

But the great news is owners can mitigate costs by implementing these 8 tips and tools. 


1 - Increase dispensary profits with smart ordering.

While fulfilling orders and restocking the shelves of depleted stock is usually the way retail stores operate,  there is a better way to make the system more efficient. For example, a dispensary should be "smart" when ordering more products from suppliers to make a profit. 


Smart ordering can be done by:

  • Connecting with the dispensary budtenders to gain insights into what customers purchase, want, and request. 
  • Building relationships with suitable suppliers and negotiating for the best deals they offer. 
  • Researching and ordering quality cannabis with a good profit margin. 
  • Optimizing the purchase process by utilizing free delivery and price discounts.


Inventory management which involves sourcing, storing, and selling products, is a significant component of how a cannabis dispensary can do smart ordering. Considering the pointers mentioned earlier, a dispensary can make smart product purchases from its suppliers to meet customers' needs. It helps increase the customer base as their product needs are met and reduces dead stock instances. 

In the end, sales vs. expenses will be a driving factor when it comes to increasing profits. Increasing profits means increasing sales while reducing expenses incurred. 


2 - Learn how to use the data

Data never lies, and if, as a cannabis dispensary owner, you want to run a profitable business, then you need to learn to use it.  

Integrating technology solutions in the dispensary is a smart move as it helps streamline processes and provides data insights into the business operations the technology uses. 

The dispensary can leverage data; for example, by integrating the dispensary's POS system with the People Management software like KayaPush, the dispensary owner can pull labor vs. sales transactions to understand the labor costs and how this impacts the business.

An all-in-one platform like KayaPush can create AI-generated smart schedules based on sales forecasts, saving an average of 3% on labor and ensuring you have enough people on the floor to increase sales but not too many to cut into labor costs. 

Using these insights, a dispensary owner can make strategic data-backed decisions and adjustments on the labor needed to attain an increased profit margin for the business. 



3 - Invest in good people

Investing in good people is essential to a business. To quote Steve Jobs, former Chairman, CEO and co-founder of Apple, The secret of my success is that we have gone to exceptional lengths to hire the best people in the world.

The secret of my success is that we have gone to exceptional lengths to hire the best people in the world.
- Steve Jobs


As a cannabis dispensary business owner, it is crucial to find great people so you can invest in them and help them learn, grow, succeed, and sell. Dispensary owners should work to create a positive work environment with an ethical work culture and a supportive ecosystem. 

As the primary point of contact with customers, good budtenders play a significant part in the success of a dispensary as they help sell the products, build relationships, and generate buzz around your dispensary. A cannabis dispensary can invest in its budtenders by:  


  • Providing product samples to show them an appreciation for a job well done. Access to product samples also helps increase their knowledge of the product and the ability to sell it. 
  • Facilitating training and learning through a). taking advantage of Patient Appreciation Days (PADs) by brands to teach/re-educate budtenders more about the products, and b). the use of online cannabis programs like Toptender provides easy, simple and on-the-go education to foster better knowledge absorption, retention, collaboration and innovation. 
  • Offering competitive compensation with industry-level pay with employee benefits and the possibility for a pay rise and growth based on an employee's performance.  
  • Providing rewards and recognition for top-selling budtenders and those who go the extra mile. 
  • Raising the morale of budtenders by doing small but meaningful gestures, for example, providing snacks and coffee in the break room. This action shows an employer who cares and incentives budtenders to sell more.
  • Offering effective communication through feedback (given and received) and regular conversations with the team to gain insights into customers' choices, pain points and possible solutions. 
  • Involving the team in the decision-making process ensures that more strategic action is taken. 


Investing in talent ultimately pays off for a dispensary. It provides the necessary skills and incentivizes employees to give their very best in their roles, increasing sales and subsequently increasing dispensary profits. 

4 - Make dispensary marketing a team sport.

Generally, dispensaries dedicate a considerable budget to marketing (especially the newer ones), but it is possible to spend less money on marketing by banking on the dispensary team. Here's how. 

Marketing is a collaborative effort that can be done by:

  • Using social media collaborations with more established cannabis brands to help build awareness and increase traffic and awareness of the business. Using occasions like Patient Appreciation Days (PADs) to post and tag brands and, in the long run, build relationships with these brands. 
  • Additionally, social media can be used to showcase the products, drive traffic to an e-commerce or physical store, interact with customers and share information or updates. 
  • Active Involvement of dispensary employees in community activities to help provide the support needed and help reduce pushback and backlash sometimes directed towards cannabis businesses. 
  • Leaning on the budtenders spread the word to the target demographic through their networks. The dispensary owner can offer incentives to the budtenders to participate by offering free swag, setting up competitions and prizes, and getting the team working to build the brand and success of the dispensary. 


With a combined team effort, marketing can help increase a dispensary's brand awareness, draw more customers, and drive up the dispensary's profits. 


5 - Lean into loyalty.

A cannabis dispensary can increase profits by creating a loyalty program for its customers. 

Brytany Melville, Cannabis Retail Strategist and founder of The Grown Group, defines a loyalty program as an innovative retail program that attracts and retains loyal customers by rewarding them for their repeated business through special incentives.

A Loyalty program is a retail program that attracts and retains loyal customers by rewarding them for their repeated business through special incentives.
- Brytany Melville, Cannabis Retail Strategist


A loyalty program is an excellent tool for growing a consistent consumer base and a reliable revenue stream. In addition, a loyalty program can help a cannabis dispensary business improve brand awareness and reputation, get ahead of the competition by reducing instances of price comparison and gain customer metric insights for better marketing and product purchase. 

It is central that customers feel rewarded for their brand loyalty to encourage them to keep purchasing from the store or even making recommendations. Loyalty programs can exist in different avenues, from punch cards to loyalty points rewarded for purchases made. These benefits for customers can include:

  • Early notification about new products, price discounts and events. 
  • Access to member-only information
  • Reward point system where points accumulated can be redeemed to make purchases in-store.
  • Offering special discounts
  • Offering free pickup and delivery dependant on cannabis state regulations. 


Research shows that 58.7% of internet users believe earning rewards and loyalty points is one of the most valued aspects of the shopping experience. Its shows how important it is that a dispensary create a loyalty program. It should be noted that the cannabis industry is highly regulated, so it is wise for dispensaries to always check the constantly changing regulation to ensure that they are compliant. 

With a consistent, rewarding program for loyal customers, they may feel inclined to make purchases which helps maintain a steady stream of revenue and also drives profits through sales. 



6 - Don't pay for unworked hours

As a cannabis dispensary owner, you can employ technology in the business to ensure that employees are only being paid for the hours they are working. 

The use of time tracking software and scheduling software ensure that the dispensary complies with mandated labor laws, that employees are working only the required hours and allocated schedules so that when payroll is run, remuneration is correctly paid. It also protects the business from class action laws suits and ensures the well-being of employees.  

Leveraging on technology, Merilyn, franchise operator of 13 Booster Juice stores in Western Canada, used KayaPush during the 2020 COVID-19 lockdown to oversee manager and employees' behavior for 13 stores from the comfort of her own home. She was able to approve schedules, run payroll, communicate with her store manager and manage labor costs saving $91,200 (money) and time spent managing business operations. 


The lesson here is for cannabis dispensaries to leverage technology to manage labor costs, increasing the profit margin that the business enjoys. 


7 - Cut back on admin costs.

Administration costs don't look like much, but they do add up. A cannabis dispensary business administration needs to show up in payroll management, compliance, organizing work schedules, and inventory handling and control. These tasks require the dispensary to hire people to handle and execute. 

The great news, owners, can navigate these costs with the support of technology. For example, cannabis-specific workplace management technology can save 40 hours per week, allowing a dispensary owner to create auto-generated schedules based on labor forecasts, alerts when there's a need to adjust clocks, and streamline approved ones hours to payroll. 

In addition, owners can use payroll software to automate tax and holiday calculations, and deduct and remit taxes from payroll. This can save dispensary store owners 40 hours or a full-time admin person. 

Investing in technology helps save money and handles responsibilities and tasks that would have required hiring extra labor to take them on. 


8 - Carry out an audit 

One of the most sure-fire ways to increase profits is to reduce expenses, so it makes sense to perform an audit of all the business operations expenses and processes. 

An audit can be done in the form of an internal audit to evaluate the dispensary's internal control, compliance, and accounting processes, and external audit to verify financial statements, and a business process audit to assess how the business' operations. The audit is done by systematic and thorough examination, assessment, verification and reporting on the requested aspects of the business using the auditing standards. 

These audits are essential as they help businesses be more effective and efficient, remain competitive in the market, and provide a high-quality standard of service to customers. The audits will also enable the dispensary owners to see anomalies and redundancies that can be solved and reduce costs incurred by the business, increasing profit. 


In Conclusion

The growth and sustainability of a cannabis dispensary business depend on its making a profit. Ultimately, revenue vs. expenses is determined to increase profits, which means that for a dispensary to increase its profit, the income should be more than the costs incurred. The 8 tips and tools above, when implemented, will help increase cannabis dispensary profits.  

Dispensary Profits


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