For cannabis dispensaries, 420 is a major retail opportunity. Use the best practices in this guide to plan your inventory, create discounts, hone your marketing, and much more.
For cannabis dispensaries, 420 is a major retail opportunity. Use the best practices in this guide to plan your inventory, create discounts, hone your marketing, and much more.
Disclaimer: Be sure any potential marketing or advertising practices—including product bundling, sales of cannabis accessories, product discounts, and free item giveaways—are permitted in your state and in compliance with all local and state rules and regulations.
For cannabis dispensaries, 420 is a major sales and marketing opportunity. It’s a chance to take advantage of heightened consumer interest, and a perfect time to experiment with new marketing and advertising tactics.
With this in mind, we’ve assembled our annual 420 toolkit, with resources built to address the biggest opportunities and issues you’ll encounter this year. Following this guide can help you hit the ground running, avoid last-minute scrambles, and execute your marketing strategy to make this 420 your best one yet.
We'll start with a brief analysis of last year's sales. If you wish to skip ahead to a specific section of the guide, use the navigation on the left.
Flower was the top product category, totaling 43% of sales via Dutchie’s platform, followed by:
While flower maintained its position as the most popular product category, the product saw a 6% decrease in sales YoY (49% in 2021 vs 43% in 2022) as other categories grew via the Dutchie platform.Â
Vaporizers notably saw a 5% increase YoY (20% in 2021 vs 25% in 2022). Edibles and Concentrates also saw modest increases YoY.
The majority of purchases were made in-store, but average order value (AOV) was higher on average for online orders ($112) than in-store orders ($91).
The hour between 5:00-6:00pm PST was the most popular hour of the day, with 3:00-7:00pm PST being the most popular window for purchases.
The vast majority of retailers we speak to start strategizing for 420 about 6-8 weeks in advance. A generous lead time will help ensure your inventory is stocked with a variety of quality cannabis products and accessories. Additionally, it allows for time dedicated to pricing strategy and discounts, preparing your team, planning marketing campaigns, and more.
You’ll also want to prepare for increased foot traffic. With 420 being the biggest cannabis retail opportunity of the year, preparing ahead of time will save you from last-minute potential headaches. Here are a few of our recommended best practices:
Let’s dive in.
These partners will need plenty of lead time to get your products ready.
In terms of choosing which products to order, there are many different ways to forecast demand and identify what merchandise you’ll want to re-up for 420. Overall, you’ll want to stock your inventory with tried-and-true favorites.
One way to get a pulse on consumption trends is to research the products that have been consistently popular over the past year. This is where historical data from your cannabis POS system comes into play. These insights don’t just show you what sells and what doesn’t—they also highlight peak sales times, so you know when you expect (and prepare for) increased foot traffic. If you’re on Dutchie POS, one place to start is with your POS analytics. Filter sales reports by previous 420s, to see which products typically sell the most.
ABCÂ analysis can also help you identify your best and worst performing products. A-grade products are your money makers and represent the specific products that make up 80% of your revenue, whereas C-grade products are your dead stock and represent the specific products that make up only 5% of your revenue. 420 presents a great opportunity to drive revenue by featuring A-grade products in your 420 campaign with modest discounts, as well as an opportunity to sell off dead stock and free up shelf space.
Stocking your shelves with quality flower, vaporizers, edibles (and more) delivers a high-value shopping experience, increasing the likelihood of word-of-mouth promotion within your community. This means your customers are doing the marketing for you.
It helps if you spend time developing your brand story, curating quality inventory, and creating memorable campaigns. Still, an exciting retail promotion is the best way to generate buzz that cuts through the noise.
A well-executed promotion converts wavering prospects and increases sales—at least in the short term. And if your new customers receive a great product, excellent service, and compelling follow-ups, many will stick with you for the long haul.Â
First, you’ll want to check out the competition. What deals are your competitors offering? What are they doing well, and what are they doing poorly? How can you offer something different and better? Evaluating competing offers is always a helpful exercise, even if you can’t incorporate these ideas right away.
Here are three popular types of discounts and how to implement them in your dispensary on 420:
Discounting products is typically the most popular type of retail promotion. Everyone loves a bargain, so it makes sense to offer sales discounts when you want to capture customers’ attention.
You can offer a percentage discount, such as “10% off pre-rolls,” or offer dollar amount deals, such as “$5 off cartridges”. Promotional pricing can apply to your entire dispensary, or it can apply only to certain products. Storewide promotions tend to attract the most buzz, but it’s important to do what works for your dispensary.
In retail terminology, BOGO means Buy One, Get One. You’ve probably seen the acronym BOGOF for Buy One, Get One Free. Some retailers offer buy one, get one half-off deals.
These offers entice customers because they cut down on shopping guilt. People feel more comfortable spending money when they secure a deal they wouldn’t normally get.
For potential customers hesitating to make a purchase, BOGO deals can nudge them in the right direction
Loyalty programs are a great investment because they increase customer retention and maximize their lifetime value to your dispensary. With loyalty points, customers earn points each time they shop with you. They can earn discounts (or even free items) when they reach a certain number of points.
In the broader retail world, many retailers also award points for actions such as social sharing, writing reviews, and referring other customers.
Tips for implementing:
You might also want to group products that go well together or commonly sell together as “bundles”. (Think: lighters, rolling trays, and rolling papers; flower and grinders; pre-rolls and lighters, etc.) This will encourage customers that were only looking to purchase part of a set to buy a complete (and more expensive) set, therefore increasing your average order value.
Consider offering small discounts for purchasing more than one of the same item, too. Shoppers may see the savings that come with buying products in bulk and add more items to their cart.
The weeks leading up to 420 is a great time to run a digital marketing campaign targeting both current and prospective customers. The goal of the campaign should be to let your audience know about your offers on 420.
The best digital marketing strategies are done over multiple channels. Here are some popular options.
While social media often takes up most of the spotlight, email marketing is a more worthy marketing channel that continually yields great results. In fact, email marketing has the highest return on investment of any marketing medium. According to Litmus, for every dollar invested in email marketing, you can expect up to a $36 return.
Be sure to start planning, creating, and scheduling emails long before 420 starts. If you have an email database of customers or regularly send emails out, this one will be easy. Just schedule and send emails that promote your dispensary’s upcoming deals, new products, and more.
Here are some tips for a winning 420 email marketing strategy:
Leading up to 420, you can make an emotional connection with customers featuring new products and highlighting positive testimonials on social platforms. Then, when 420 hits, use email marketing to drive immediate results.Â
LinkedIn has traditionally been the most cannabis-friendly social media platform—but in February 2023, Twitter announced it would allow cannabis companies to market their brands and products in the United States.Â
Note: Stricter policies on Instagram and Facebook make advertising more challenging for dispensaries than other types of retailers.
SMS marketing, also known as text message marketing (or just text marketing), is a simple way to reach your customers and get a much higher ROI. Customers welcome it, too—agreeing that it’s a great way for retailers to get their attention.
Like email marketing, SMS marketing is opt-in, which means customers need to sign up for it. However, unlike email marketing, SMS messages are much shorter—and more likely to be engaged with sooner than emails.
If you’re already sending out SMS messages, then you should be including announcements about 420. Create simple yet engaging notifications to send out to your audience to keep them in the loop and inform them of what’s happening.
How effective is SMS marketing?
SMS marketing is effective when your messages are crafted thoughtfully and sent to the right customers—just like any marketing. But is it effective enough for its effort to be worth your time? You bet.
Consider this: cell phone adoption is nearly universal. Adults are deeply engaged with their phones: a recent survey of business owners found that their customers were 4.5x more likely to reply to an SMS message than an email.
This isn’t to say SMS marketing should replace your emails; but SMS messages are a good supplement to a larger cannabis marketing strategy, especially if you segment your customers carefully.
What better way to promote your holiday sales than with beautiful graphics and visuals? Whether you’re planning to use banner ads to promote your holiday sales or changing the header/hero image on your homepage for 420, you don’t need to be a graphic designer to get things done.
If you lack design chops, you could use an online design tool like Canva. You could also opt to hire a freelance or in-house graphic designer.
420 is an opportune time to build relationships with your previous customers and get them to come back.
Customer marketing is an opportunity to email and retarget your previous customers with your best deals. Email existing customers with your CRM, giving them the chance to access a sale earlier or offer exclusive sales just for being a subscriber on your email list. Exclusive deals also act as an incentive for customers to leave their email before potentially leaving your site.
Because dispensaries are local businesses, ranking in Local Search and Maps will be key to your website’s organic search success. While SEO as a whole is more of a marathon than a sprint (you won't see results overnight), you’ll see an immediate return with the following tactics.
1. Claim your dispensary’s Google Business Profile‍
Claim your Google Business profile, complete it thoroughly, and keep it updated. This is step one for appearing in Google Local and Maps results.
If you haven’t claimed your dispensary’s profile, or if you have but haven’t maximized its potential, go now to Google Business Profiles.
2. Get noticed in other online directories‍
Claim and complete your dispensary’s profile on Yelp, Facebook, Apple Maps, Bing, Foursquare, Better Business Bureau, etc.
Ensure your location data (address, phone number, etc.) is exactly the same across all directories. If your address is 123 High Street on your Google profile, use that (and not 123 High St) on other directories. This will help your business rankings on Google Local Search.
3. Get rave reviews
Google reviews are essential as the quality, quantity, and freshness of your Google reviews factor into your Google Local rankings. Yelp is crucial, too, since Yelp ranks in Google’s top 5 positions for 92% of search queries containing a city name + business category, e.g. [san diego dispensaries].
Here are some ways you can optimize your dispensary's fulfillment workflows:
Organize your fulfillment area. When filling orders, you want to make sure your fulfillment area is stocked with adequate supplies and that your most popular products are accessible for quicker selecting and packing.
Hire some helping hands. You'll likely get an influx of orders over the 420 sales period, so it might be worth hiring additional staff to help you fulfill and deliver orders to customers more quickly.
Over-communicate. Communicating clearly and regularly with your budtenders and delivery drivers can help avoid errors and save you time in the long run.
Prioritize and organize your orders. Plan in advance how you want to prioritize your orders, and group orders by a common theme so they can be processed more quickly.
Given the 420 rush (including the days leading up to it), your staff will be busy processing orders, consulting with customers, and more—but that’s no reason for your dispensary to dial back on internal communication.
Maintain open, consistent lines of communication throughout the holiday rush, just as you would with a medical customer who’s waiting for their favorite product to be restocked. Employees that feel supported by their managers are more likely to feel content in their position and motivated to increase sales.
To keep things running smoothly during peak sales times, make sure you’ve established workflows that keep all employees aligned on the day’s top priorities. Anything that slips through the cracks will create tension in your store—and shoppers will pick up on it.
Given that 420 is one of the busiest cannabis shopping days of the year, preparing staffing schedules and setting business hours ahead of time will save your staff from headaches and burnout.
Here are a few ways to keep your staff happy and the sales flowing:
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Support for extended hours: Depending on your location, consider offering extended hours to give customers more time for in-store pickups. If regulations in your city prohibit this, you could still extend your before-opening and before-closing shifts for inventory checks and restocking. This prevents you from overloading your staff within a small window of time.
Delivery: If you plan to run delivery on 420, you will definitely need to book extra staff exclusively on shift to take deliveries. Pulling sales staff from the floor on a busy day like this could cause more problems in-store. Make sure these individuals are trained to conduct deliveries within the POS and traceability systems.
Obviously the more deals you offer, the more budtenders you will need to have scheduled. Sometimes it’s wise to staff up extra on the week leading up to 420, so the prep is treated just as seriously as the holiday itself.
‍Spoil your staff: Treat your staff for their hard work! Supply food and caffeine, and rotate them frequently so they have more breaks than usual. You don’t want them feeling burnt out in front of a customer.
Enable pre-ordering: If your POS allows for it, enable customers to pre-order their products for the next day with after-hours ordering—and use these pre-orders to plan for future demand. You can also let customers schedule orders in advance for pickup and delivery, and set maximum order limits so your staff can manage order fulfillment with ease.‍
Budtender education is vital to cannabis as a movement. Unfortunately, lots of negative connotations and stereotypes regarding cannabis (and those who consume it) continue to persist. To prepare for 420, educate your budtenders on the importance of accurately speaking to the science behind cannabis. You’ll want your customers to see your budtenders as a trusted resource—and while a lot of cannabis consumption varies by body chemistry, a true cannabis enthusiast will be able to successfully guide a customer in their product selection.
Resources for budtender education can include books (made available to employees during downtime at the store or for “rent” to read at home), scientific research, brochures and pamphlets (directly from the brands you sell), industry newsletters, and even online courses. Utilize all the resources available to you to keep your budtenders passionate and informed about what they’re selling.
Another fun way to keep budtenders passionate about the products they’re selling is to create exclusive vendor hangouts. These meet n’ greets are more than just in-store popups, because your staff doesn’t always have the time to actively learn and ask questions while working the sales floor. Setting internal meetings with your top-selling brands can help motivate your staff. The rich details they hear directly from the cultivators and producers that crafted each batch of flower or oil can help provide a curated shopping experience for everyone involved.
Employees that go beyond the criteria of your average budtender want to be acknowledged when they take on additional responsibilities that aren’t necessarily a part of their job description. Recognize and reward those who’ve reorganized inventory, made a stock list for the purchaser or supervisor, or pulled an item with an old harvest date from the floor. Attractive rewards for going above and beyond can include:
Contests within your dispensary can also incentivize your staff to work faster and upsell more often. Point of sale analytics can help you monitor sales for these contests. If you’re a Dutchie customer, this is as easy as checking out your Dutchie Analytics.
Every contest should have a tangible reward; a gift card to a local glass shop; a vaping device or battery; brand swag, etc. Position the prize as the result of an attainable but significant sales goal. Your 420 revenue will spike, and the commitment to increasing product sales will follow naturally.
Debatably the most important part of cannabis retail is the moment of the transaction: when money transfers from the customer to the budtender.
This is, after all, the moment that everything else in retail is working towards. As a dispensary operator, your budtenders should be well-trained so that everything goes smoothly in-store on 420.
Here are four basic skills your budtenders will need to be well-versed in.
A well-rounded training in customer service will serve your budtenders well. Here are some of the skills they’ll need:
General friendliness. General friendliness is essential. Your budtenders should smile and greet customers. They should have a positive and upbeat demeanor throughout the interaction to ensure the customer has a remarkable experience.
Cross-selling. Your budtenders will probably be the last person to speak to the customer before the sale is officially closed, meaning they have a crucial chance to confirm the customer has found everything they need or to add-on to the sale.
Budtenders who are catering to customers picking up online orders should ask the customer if they’d like to add any last-minute items. They should also be trained to ask customers if they’re interested in purchasing whatever small ”impulse buys” are at the counter. At a cannabis dispensary, this typically includes lighters and rolling papers.
Handling angry customers. In any retail environment, storefronts are the first stop for returns or concerns, and therefore, angry customers. Equip your budtenders with the skills (mainly active listening skills) to diffuse situations and turn your angry customer into a happy one. Get them up to speed on popular phrases of courtesy, too.
It’s mission-critical that your budtenders know your policies inside and out—particularly when it comes to staying compliant as it relates to sales and returns. A budtender who doesn’t understand compliance, for example, could cost you a lot of money at best, and jeopardize your cannabis license at worst.
Of course, your budtenders must learn how to work your cannabis point of sale hardware and software in order to process a sale (or return). The skills involved here will be, among other things:
Your budtenders will need to know how to run some of the administrative elements of your cannabis POS to varying degrees. For your most trusted staff, you’ll likely want to teach them how to close out a register and run sales reports. Some cannabis dispensaries find it most efficient for all their budtenders to be able to close out.
There are a few things to consider before creating and communicating your return policy to your customers.
A good rule of thumb is to create a policy and stick to it. That policy should enforce state compliance. Returning products such as flower, pre-rolls, edibles, concentrates, and extracts can be tricky due to individual state compliance and the sometimes questionable nature of consumer return requests.
But it's also essential to have an internal policy to allow for the return of contaminated or defective products. Some states may not allow returns at all but may allow for product exchanges. Additionally, many states have waste management procedures for returned or exchanged products. Be sure that you are disposing of these products in compliance with all state regulations.
Former Dispensary Manager and Dutchie Support Trainer, Tawyna Knight, gives us tips for processing returns from start to finish.
Preparation, planning, and starting earlier are the keys to a successful 420. This guide should cover most of what you need to know for this year’s upcoming sale events. We hope it puts you and your team in a better position to succeed during the biggest cannabis sales day of the year.
If this is your first 420, treat it as a learning experience. Stay motivated and ambitious, set realistic expectations—and remember to enjoy the ride.
Dutchie is the leading technology partner for cannabis retailers of all sizes. With a range of solutions covering point of sale, payments, ecommerce, insurance, and more, Dutchie empowers dispensaries to run efficiently, scale their operation easily, stay compliant, and offer outstanding experiences to the customers who rely on them.
Get in touch today.
