In the dispensary, time is everything. So long as 280E restrictions continue to tip the scales for cannabis businesses at tax time, sales and marketing payroll is an unavoidable expense that, in general, is not deductible. Where a company doing manufacturing and in-house wholesale might limit the payroll exposed to this IRS restriction, a cannabis retailer will often find themself unable to move any of their operational payroll into Cost of Goods Sold, the only erstwhile deductible expense for cannabis businesses.
What does this mean for time to transaction?
It means a cannabis retailer needs to decide about how quickly sales should move at their locations. For retailers with multiple locations, this may vary from store to store based on foot traffic, visibility, local demographics, and nearby competition. A retailer with significant competition in a generally tech-savvy neighborhood might have time targets of 5 minutes or less for each customer to enter the budroom, pick up their online order, pay, and exit. For these retailers convenience and price competitiveness is often their lifeblood, so creating a seamless experience through a mixture of digital and in-person retail platforms is key. By contrast, a boutique retailer or dispensary off the beaten path might allow for 30- or 40-minute consultations, trusting that these will lead to higher per-ticket sales of more expensive or numerous items, as well as repeat visits.
Overall, it’s important to realize that time per transaction can’t stand alone. The most successful retailers track several metrics to identify efficiencies and maximize the margins involved in consumer cannabis sales.
Keep an eye out for more on retail KPI’s from Fire Business Strategies. Don’t want to wait? Contact us for a free consultation to learn how we can enhance the efficiency of your dispensary operations.
