5 min read

Why Do Some Cannabis Dispensaries Fail?

October 6, 2020

Cases of failed cannabis dispensaries aren’t unheard of. You could be wondering why that should happen in such a lucrative industry.

Starting a cannabis dispensary is one of the wisest investment decisions you can make in 2020. According to a Pew Research survey, at least 67% of Americans believe that marijuana should be legalized. Although cannabis remains a controlled substance under the federal level, regulators like FDA have continued to respond favorably to emerging scientific findings and industry trends. 

So far, 33 states have legalized medical marijuana, with 14 states allowing access to recreational marijuana. That only means one thing – there’s likely to be a surge in demand for cannabis products moving forward. 

Read on for some top reasons why some cannabis dispensaries fail.  

Lacking Clear Objectives:

The profit motive is one of the essential reasons behind the establishment of cannabis dispensaries. But you shouldn’t just venture into the cannabis industry to make money. Instead, your business should have a higher calling in terms of what you want to achieve in the long run. 

So, start by clearly spelling out the mission or vision of your cannabis dispensary. This mission or vision statement should be aptly captured in your dispensary’s service charter, and the same must appear in various publications related to your business. 

And while choosing objectives, insist on something that serves the public good, such as offering environmentally sustainable products. With such an objective, you’ll have the drive to continue operating the dispensary even when you’re no longer interested in profit-making. 

Most importantly, remember to choose a vision that’s out of sight but not out of reach.

Attempting To Circumvent the Law: Dispensaries Fail

Image Source

Cannabis laws vary by state or country, and any cannabis retailer worth their salt must understand that. But in their vain attempts to escalate their profits, many cannabis dispensaries operate with blatant disregard for the law. 

Generally, non-law-abiding cannabis dispensaries can be split into three different categories. 

First are dispensaries that are established in jurisdictions where cannabis is outright illegal. The second category includes businesses based in regions where cannabis is legal, but target their sales to clients located in states or countries that have decriminalized marijuana. Lastly, we have cannabis dispensaries that operate in jurisdictions where marijuana is legal and prohibited marketing methods.It doesn’t matter the category you fall in; you’re operating on a time bomb as the long arm of the law will finally catch up with you.

Not Having a Website:

It’s undeniably true that cannabis has received widespread recognition over the past few years. However, many would-be consumers still treat the cannabis industry with some skepticism. 

As such, they would be more comfortable to order cannabis online Canada as opposed to from a brick-and-mortar dispensary. Without a website, you could be losing big time on potential clients. 

But having a website isn’t enough. The website must also be professionally designed to avoid the scourge of bounce rates. You want readers to spend as much time on your website as possible without getting distracted by intrusive ads or slow page load time.

Employing Hard Selling Techniques:

We’ve just indicated that the cannabis industry is still treated with a degree of skepticism. Even worse, many prospective clients are ignorant of the plant and its perceived benefits. 

As such, you should endeavor to build a rapport with them first. And there’s no better way of doing that than publishing useful content on the health benefits of cannabis and the plant’s legal status. 

Also, cover other aspects like the various ways to consume cannabis products, dosing requirements, and potential side effects of cannabis. 

Once your potential clients see a sincere desire in you to inform them, they won’t mind ordering your products.

Focusing on Different Cannabis Products:

Image Source

The good thing about cannabis is that there are various products that you can deal with. But like any other business, cannabis dispensaries should specialize in specific cannabis products. 

It may be tempting to be a jack of all trades. However, managing different products is a false economy, especially for cannabis startups. 

So, if you’ve chosen to sell inhalable, only focus on cannabis-based vape juices as well as vape accessories. Similarly, if you’re interested in offering edible products, only stick to this area. 

Once you’ve got the hang of the industry and understood the requirements of your client base, you can now integrate different cannabis products slowly into your dispensary to prevent it from failing. 

Lacking Proper Financial Management Methods:

Cash flow issues are another notable reason why many cannabis dispensaries fail. It’s advisable to always stay on point with your financial status. 

To do that, you’ll need to keep orderly books of accounts, paying particular attention to your income vis-à-vis your expenditure. Ensure that your dispensary maintains a positive cash flow at all times. 

Most importantly, remember that you’re not in the business just to stay afloat but to grow. Therefore, always keep track of your profits and ensure there’s a general trend towards higher revenues. That way, you’ll be able to determine your areas of inadequacy whenever your profits stagnate or start to decline.   


Cannabis remains one of the most lucrative industries, but you won’t enjoy the trappings of this industry if you wade in headlong. Start easy by avoiding some of the mistakes we’ve highlighted above, and you won’t regret ever taking your chances in this industry.

Contributed by Liz Thomson