4/20 is arguably the biggest cannabis-specific holiday, sending many cannabis businesses in a frenzy to make the most out of the resulting celebrations. But it’s far from the only profitable holiday. Throughout the year, there are plenty of great opportunities to reach your audience and increase sales. But here’s the catch—it’s not just about selling. It’s about doing so profitably.
While it’s exciting to think about the buzz, the promotions, and the potential foot traffic during a sales event, it’s important to keep an eye to your bottom line. Costs associated with planning, promoting, and hosting can pile up, and if you don’t pay attention they can eat into the profits even if sales are high. This is especially true when factoring in the discounts and offers that draw in your customers in the first place.
With that in mind, we’re diving into seven insights you need to consider to plan profitable cannabis events. Here’s the first thing you need to keep in mind:
Insight #1: Pay Attention to Your Margins
Smart spending is the name of the game. Look, I know it’s tempting to go big with extravagant decorations, plenty of food and drink, and of course, big spending on advertising campaigns. Not to mention, the inventory of cannabis products you need to have on hand, especially if you’re promoting a sale.
Speaking of sales, predicting them is one of the most challenging aspects of any business, especially in a budding industry. How do you know if your investment will yield the expected returns? Anecdotally, many cannabis businesses have reported a month-over-month increase in sales between March and April, hinting at the buying spree leading up to 4/20.
Diving deeper, some specific products might outshine others during these events. You know your market best, but understanding which products might see a surge compared with regular sales can help you stock up in a smart way.
Remember, the true measure of success isn’t just the buzz during the event or the sales numbers but the Return on Investment (ROI). Keep track of all of your expenses so you have a clear idea of what you’re spending and can more easily calculate ROI after all is said and done, so that you can plan more effectively for your next event.
Your accounting team will be a big help when it comes to understanding ROI. Contact Accounting for Green if you’d like to learn more about our cannabis accounting services.
Insight #2: Prioritize Generating Loyalty through Enhanced In-Store Experience and Convenience
In the cannabis business, much like any other industry, keeping your existing customers happy is more important than getting new ones, because it costs less to retain a customer than acquire one. Loyal customers tend to spend more and become superfans, recommending you to their friends, which increases lifetime customer value.
In-store experience matters. Think of the last time you walked into a small business. If it was clean, well-organized, well-stocked, and someone welcomed you, you immediately felt more welcome, right? That’s the first step towards building trust with your customers, and it absolutely relates to your events. When there’s a large influx of people, it can be difficult to stay on top of keeping things organized, but it’s absolutely worth your while to create the best impressions.
Your staff is the front line, and making sure you have enough on hand for events is critical. But it’s not just about a warm body. Knowledgeable and friendly staff can make or break the deal. Customers may have questions about the product or ask for recommendations—and having budtenders who can create the experience your customers want goes a long way towards building loyalty.
With all of this in mind, remember that events aren’t just sales boosters. They are about extending your brand experience to new audiences. Whatever events you create, whether intimate affairs for customers and their friends or a widely publicized street party, focusing on delivering a memorable experience can create the loyalty you want.
Not sure of the value of each customer? Your accounting team can help. This is one of the ways Accounting for Green supports our clients.
Insight #3: Plan Ahead (But Maintain Flexibility)
There’s an old adage: “Failing to plan is planning to fail,” and this couldn’t be truer in the context of organizing events. Planning ahead allows you to secure supplies early, which allows you to offer better prices while ensuring that you won’t face last-minute shortages. It also makes it easier to stick to your budgets, get necessary local permits, arrange for food trucks or entertainment and any number of other scarcity-based variables.
With that in mind, consider using slow periods (like January) as a planning time to outline the events you want to host throughout the year. Make sure that you’re leaving room for flexibility so you can take advantage of last-minute opportunities and cover any details that slip through the cracks.A note on local and state laws: complying with them is an absolute must. Work with your local governments as early ahead of time as possible to ensure that your event investments don’t go up in smoke.
Insight #4: Strengthen Your Event with Strategic Partnerships
Never underestimate the power of collaboration! By partnering with other businesses and organizations to co-host cannabis events, you can pool resources while reaching newer, wider audiences.
Shared costs is one of the biggest—and most obvious—benefits. Whether it’s advertising expenses, overhead costs, or even the costs associated with permits and licenses, cutting your share of the costs can make the event far more affordable.
What’s more, each business brings its unique set of loyal customers to the table, which allows you to help one another grow and benefit from increased foot traffic.
Looking for some examples of cannabis event collaborations?
Food Trucks & Eateries
By partnering with local food trucks or eateries, you can keep people in the area for longer. Win-win for both businesses.
Hosting an event with your suppliers can be a great way to showcase the quality and variety of products you offer. Live demonstrations, educational sessions about sourcing, and interactive Q&A sessions can bridge the gap between consumers and the products they love.
This might seem counterintuitive, but partnering with nearby dispensaries, especially for larger events or festivals, can be mutually beneficial. Collective events can be larger in scale, offer more variety, and draw bigger crowds.
Insight #5: Gauge Success by Looking Beyond Sales Numbers
While the bottom line is vital, and sales figures do offer a tangible measure of success, it’s important to understand that the profitability of your event extends far beyond the cash recycler. Here are a few other factors that will help you truly gauge the success of your cannabis event:
- Customer Feedback: It’s a gold mine of insights that can help you understand what worked and what didn’t. Were there particular products they loved? Was the ambiance right? Was the staff helpful? These answers can help shape future events and ensure they align better with your customers’ preferences.
- Social Media Engagement: By tracking your social media metrics before, during, and after an event, you can get a good idea of how much online traction your event generated.
- Brand Loyalty & Awareness: Did you notice more sign-ups for your loyalty program during the event? Has there been an uptick in newsletter subscriptions or an increase in website traffic after the event?
- Increased Foot Traffic: While sales are essential, not every visitor purchases during the event. However, simply attracting more visitors is a win. Increased foot traffic can lead to potential future sales, and more importantly, these visitors become brand ambassadors, sharing their experiences with friends and family.
The beauty of events is that they’re not a one-off, but part of a continuous journey. The feedback and data you gather from one event should feed into the planning of the next, which ensures that each event is better—and more profitable—than the last.
Insight #6: Document Everything to Improve Your Budget
Simply put, document everything. By creating a list of all the things you did for each event, including the costs and time associated with each item, you can keep track of costs. Plus, you can make notes about how it went and what you’d do differently, so you can decide to continue, discontinue, or adapt each component for the next event. Moreover, this list helps you plan for future events, serving as a checklist of sorts!
Insight #7: Remember It’s Not Just about 4/20
Go beyond the haze of 4/20—far beyond it. While 4/20 has cemented its reputation as the cannabis holiday, there are plenty of opportunities for promotion, celebration, and sales throughout the year. Here are a few:
- January: The start to the year is a slow time, and while there may not be a lot coming in, it’s the perfect time to plan.
- February: It’s the month of love, so consider creating a small event or promotion around using cannabis to enhance your love life.
- March: St. Patricks Day may or may not be big in your area, but in Boston, we usually see some fun promotions around “the green”
- April: 4/20 and all of its associated events really become a weeks-long—if not a month-long—celebration. It’s the perfect opportunity to go big (profitably, of course).
- May: Memorial Day marks the beginning of summer, making it perfect for promotions that relate to outdoor activities, barbecues, and get-togethers.
- June: Pride Month is a great opportunity to support the LGBTQIA+ community whether hosting special Pride events or making donations to organizations.
- July: The 4th of July is a HUGE time, especially for events celebrating the freedom to tok.
- September: Farewell to summer! Labor Day Weekend promotions can give you a boost with one last summer hurrah.
- October: Halloween gives you endless opportunities for themed events and spooky, smoky specials.
- November: It always amazes me how big Thanksgiving is for the cannabis industry. Some clients say it’s even bigger than 4/20. Whether it’s related to food or forced time with family, sales ALWAYS go up during this time.
- December: Year-end holidays are packed into December, with seemingly endless celebrations. Hannukah, Christmas, and New Year’s Eve are filled with gatherings and themed events, making it a great time to promote your specials.
Cannabis Events Have a HUGE Impact on Your Bottom Line
Cannabis, while truly a budding industry, is finding that events are an important strategy for building loyal customer bases. Whether you’re lighting up the 4/20, hosting a joint event, or celebrating the freedom to tok, events are about more than sales. They create a ripple effect for your business and its profitability, yes, by increasing sales, but also by improving customer acquisition and loyalty, and increasing your brand exposure.
While this advice speaks primarily to dispensary owners, who are at the forefront of these events, other cannabis businesses should pay attention. Whether you’re a cultivator, extractor, lab, or an ancillary company supporting the industry, you can tailor your offerings and products to these holidays and offerings, and use them as an opportunity to support your dispensary clients and bring them new ideas—while simultaneously reaching new audiences.
To find out more about how Accounting for Green can help you protect your bottom line, by understanding cost of events, product profitability, and helping you prepare adequate required reports, contact us today.