November 4, 2021
3 Common Challenges of Cannabis Dispensary MSOs
Matt Dell

Running a multi-state dispensary operation comes with its own set of obstacles. If you thought activating one storefront was difficult, imagine launching multiple business lines across lines.

Keep reading from 3 common challenges cannabis MSO's face in today's industry.

Multi-State Compliance

Due to the lack of encompassing federal provisions, state legislatures determine cannabis retail compliance. This means that multi-state operators must adhere to state-specific protocols when launching a storefront.

Example #1: Retail Packaging

For example, look at packaging laws to see how much compliance can vary state-by-state. In Alaska, flower packaging must show the THC amount per gram and the package's net weight.

Meanwhile, in Arizona, the name of the cultivation facility must appear on the label. In California, the strain name must appear on the packaging.

As you can see, it's imperative to invest in the hiring and training of both company-wide and local cannabis retail compliance teams.

Example #2: Central Banking

Outside of retail-specific compliance measures, MSO's also face potential complications from federal financial institutions.

If a multi-state dispensary operation wanted to centralize revenue into one bank account, it probably wouldn't be possible.

Banks always conduct due diligence in terms of whether their account complies with federal regulations. Since cannabis is still federally legalized, it's doubtful that a multi-state operator would be able to open a central banking account.

Therefore, these retailers must open bank accounts per the state they're operating within to maintain their finances.

Marketing Activation

Launching in a new state market is another multi-faceted challenge that cannabis multi-state operators face. Let's break it down into two key components: brand messaging and target marketing.

Brand Messaging & Consumer Awareness

Perceptions of cannabis consumption vary significantly on a state-by-state basis.

Moreover, multi-state operators will find consumers with different levels of awareness and engagement depending on their storefront location.

Source: BMC

One study showed that beliefs of cannabis health benefits regarding pain and stress management were more prominent in states that legalized recreational use.

These states also saw cannabis users that consumed more frequently.

These differences indicate varying levels of awareness across state lines, which means aligning brand messaging with consumer education and perception is critical.

Therefore, dispensary multi-state operators should study consumer perception and evaluate how much education and promotions are needed.

Target Marketing: Leveraging Data

Like single-location dispensaries, multi-state operators must figure out how to engage in targeted marketing quickly and effectively.

One roadblock to achieving this is the time it takes to gather historical customer data. This kind of data is essential because consumer profiles will vary on state and city-wide levels.  

Additionally, acquiring past data on transactions enables multi-state operators to personalize marketing to consumer interests further.

Our research has shown that targeting marketing to customer product or brand preferences results in higher engagements, conversions, and revenue.

Furthermore, multi-state operators can also use historical data with platforms like Polaris to identify potential revenue opportunities by customer segments.

Data Organization

This final challenge can be posed as a question: is your data organized? What predictions can you make?  

Data organization for multi-state dispensary operations requires visibility across location and centralized metrics indicating both real-time and potential gains.

A surefire path to enterprise-level visibility lies in either consolidating the MSO operations tech stack or ensuring integrations between consolidated data into a single viewport.

Operations Dashboard in Sirius

That means consolidating delivery, sales, and operations data into as a few platforms as possible or developing APIs to ensure data transfer into one dashboard.

Platforms like Sirius allow multi-state operators to see clear and consistent dashboards on all storefront service lines.

Once data is consolidated into a single dashboard, it becomes easier to use historical findings to predict future outcomes, enabling revenue forecasting.

Make Your MSO Data Work for You

Multi-state operators like Diem integrate their data with Happy Cabbage to gain clear insights and deploy targeted marketing.

Take a look at our cannabis operations platform, Sirius ,or our machine-learning marketing software, Polaris.


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