5 Top Tips to Maximize your Dispensary Sales on 4/20 and Beyond

Dispensary Sales

April 20th is upon us, and this is a time to celebrate cannabis culture because, for the initiated, 4/20 is a ‘holiday’ dedicated to cannabis. It is the day that cannabis users worldwide celebrate cannabis and the culture that it has given us. People get together to partake in various cannabis products, and for you as a business owner, this is a day for you to maximize your dispensary sales and grow your customer base in the process. Think of it as the cannabis Black Friday.

According to a recent cannabis sales report, sales of cannabis during the week of April 20th almost doubled in 2021 from 2018. Cannabis sales in the week of 4/20 went from about 88 million dollars in 2018 to about 175 million dollars in 2021. This increase in sales happened in 2021 despite the Covid-19 pandemic hindering sales and consumption of cannabis across the country. That would suggest that 4/20 sales will be even bigger this year since many of the Covid-19 restrictions have been lifted.

Furthermore, in addition to lifting the Covid-19 restrictions, cannabis legalization efforts and public sentiment have improved a great deal since 2018, so one would expect the sales this year to be astronomical.

However, as a cannabis dispensary owner, you can’t afford to simply sit back and wait to make a killing on 4/20. Instead, you have to devise a strategy and take deliberate steps to ensure you maximize your 4/20 sales this year. This article highlights five tips that will help you maximize your dispensary sales this 4/20.

Dispensary Sales

1.   Stock up early and intelligently

Running out of stock on 4/20 is akin to brand suicide among cannabis dispensaries. Not only will it send your customers to your competitors, but it will also lead to negative reviews and sentiments among consumers, which will affect your business even after 4/20 is done.

To avoid such a disaster, you need to have your 4/20 stock in inventory well before the day itself. This helps you plan your marketing materials and display materials ahead of time. You may also want to print a special menu for 4/20 highlighting all the products you have in stock.

Additionally, you should ensure that you stock intelligently. Use your historical sales data to know the consumers’ favorite products and have those stocked in excess because those will be flying off the shelves.

2.   Prioritize female cannabis consumers

While there are more male recreational cannabis consumers than females, female cannabis consumers tend to celebrate 4/20 more than their male counterparts. According to a recent consumer spending report, 47% of female cannabis consumers plan to partake in dispensary deals on 4/20, while only 33% of their male counterparts do. Furthermore, female consumers are 13% more likely to celebrate 4/20 than male consumers.

This is a good reason for you to make room for female consumers on 4/20. Target them with your marketing content and stock some of their favorite products. You could also offer a discount to female consumers in your marketing content to ensure that they celebrate at your store.

3.   Deploy your entire staff on 4/20

You need all hands on deck on 4/20, so it is essential to ensure that your staff is all available to you on the day. This means sending out a revised shift schedule well in advance and ensuring that your team is prepped and ready for the overwhelming sales activity that comes with the day.

On top of ensuring that they are all available, you should refresh them on the available products, their effects and benefits because that will get them to make more sales, and the sales process will go by much more smoothly.

Since you will likely be open till late on 4/20, you should clear all your staff for overtime work and give them a favorable rate for overtime.

4.   Give discounts and offers on less popular products

Like Black Friday for retail stores, 4/20 offers cannabis dispensaries the opportunity to clear slow-moving inventory. One of the best ways to do this is to give offers and discounts on these products. That will make them more attractive to consumers and clear room for new merchandise in your stores.

Another strategy you could use is to give out coupons for discounts on these products for purchase after 4/20. This could help you convert one-time 4/20 customers into regulars since they will keep coming back to redeem their coupons.

5.   Give your customers a party.

Waiting in line on 4/20 can be one of the most boring activities of the day. Many dispensaries report that they lose many customers because of the long lines and the wait times. These customers most likely won’t return to the store even after 4/20.

One of the best strategies to keep customers occupied during the wait on 4/20 is to throw a 4/20 party in the store. For instance, you could set up a DJ booth and have music playing. You can also hire a food truck and offer refreshments to ensure that customers don’t get hungry and leave to get food since they most likely won’t return.

Finally, you can give out goodie bags with coupons, t-shirts, wristbands and other branded memorabilia that will help you retain those customers even after 3/20.

That is our list of the top five tips you can follow to maximize your dispensary sales on 4/20. Are you interested in learning more? Contact us today for more information on maximizing sales in your dispensary even after 4/20.

How the Passed MORE Act Could Transform Your Cannabis Business

cannabis business

If you have been following cannabis business news coming out of Washington this past week, then you will be aware of the fact that the House of Representatives just passed the Marijuana Opportunity Reinvestment and Expungement (MORE) Act. However, if you have been following the progress of the cannabis business and bills in Congress, you know better than to pop the champagne.

Cannabis bills of recent years like the SAFE Banking Act have managed to pass in the House of Representatives with ease but have not been able to make it passed the Senate floor. The SAFE Banking Act, for example, has been passed by the House of Representatives six times but has failed to become law because it has been shut down in the Senate every time.

So while you do have obvious reasons to take this news with cautious optimism, the passing of the MORE Act in the House of Representatives does have some benefits for your cannabis business, however slim those might be. Let us begin by explaining what the MORE Act is about.

cannabis business

What is the MORE Act?

The Marijuana Opportunity Reinvestment and Expungement Act, or the MORE Act, was introduced in the House of Representatives by Representative Jerrold Nadler back in 2021. The prime directive of the bill was the decriminalization of cannabis.

More specifically, if passed, the MORE Act would remove marijuana from the list of Schedule 1 narcotics that it has been on since 1970 when the Controlled Substances Act was passed. For context, the other drugs on the Schedule 1 list of narcotics include cocaine, heroin, and LSD.

With the MORE Act, possession, growing, and retail sales of cannabis would be legal across the United States on a federal level. Which means that cannabis businesses and consumers could operate just like all other businesses making legal products. Some of the main objectives of the

MORE Act includes;

  • Replaces statutory references to marijuana and marijuana with cannabis.
  • The Bureau of Labor Statistics must regularly publish demographic data on cannabis business owners and employees.
  • Establishes a trust fund to support various programs and services for individuals and businesses in communities impacted by the war on drugs.
  • Imposes an excise tax on cannabis products produced in or imported into the United States and an occupational tax on cannabis production facilities and export warehouses.
  • Entities that are cannabis-related legitimate businesses or service providers have made Small Business Administration loans and services available to them.
  • Prohibits the denial of federal public benefits to a person based on certain cannabis-related conduct or convictions.
  • Prohibits the denial of benefits and protections under immigration laws based on cannabis-related conduct or a conviction.
  • Establishes a process to expunge convictions and conduct sentencing review hearings related to federal cannabis offenses.
  • Directs the Government Accountability Office to study the societal impact of state legalization of recreational cannabis.
  • Instruct the National Highway Traffic Safety Administration to study methods for determining whether a driver is impaired by marijuana.
  • Given direction to  the National Institute for Occupational Safety and Health to study the impact of state legalization of recreational cannabis on the workplace.
  • Directs the Department of Education to study the impact of state legalization of recreational cannabis on schools and school-aged children.

As you can see from this list, The MORE Act’s objectives focus on rectifying historical injustices against marginalized communities. Bill aims to study recreational cannabis’s impact on road safety, workplace productivity, and schools, fostering informed decision-making.

If the Senate passes it, this would represent a monumental shift in US federal policy. Due to which cannabis which would finally get it on the same wavelength as the public sentiment.

What the MORE Act would mean for your cannabis business

Removal of stigma

Cannabis businesses and consumers suffer considerable social stigma from communities and people who associate cannabis with criminal and degenerate behavior. This stigma has affected many cannabis businesses in multiple ways. Which including being denied access to certain rental properties and locations in town.

Increased access to financing

Cannabis financing is one of the most challenging things to access when operating a cannabis business. Banks and other regulated financial institutions are reluctant to provide funding for cannabis businesses. Penalties can be imposed on them for engaging in business with entities not legalized under federal law.

This makes it hard for cannabis businesses to manage their cash flows and grow. With the MORE Act, cannabis businesses will be able to access small business loans and financial services.

Access to federal benefits

Despite cannabis businesses being illegal on a federal level, taxes were still expected to be paid by them. However, they were denied federal benefits associated with tax payments, including deductions, subsidies, and exemptions.  Significantly reducing available profits for such businesses. However, that would all change with the MORE Act, as cannabis businesses would finally become legal on a federal level.

Contact us for more information on how the MORE Act will benefit your business and how you can access financing and credit solutions for your cannabis business today.

Honoring Women in Cannabis for International Women’s Day

Women in Cannabis

Honoring Women in Cannabis for International Women’s Day

According to Kyra Reed, Founder & CEO of Women Employed in Cannabis, the number of women working in the cannabis industry is going down.  This has devastating consequences for the industry as a whole.  Read the entire article here

#internationalwomensday@womenincannabis@cannabisqueens#cannabisbusiness@cannabiswomen

Need to Purchase/Refinance/Build Out Your Cannabis Property?

Cannabis Property

Let Our Experts Help About Cannabis Property!

Cannabis property, our amazing team of professionals has helped cannabis operators like you purchase properties. Refinance into better terms, and build out and construct new facilities by obtaining financing for real estate and equipment.

We recently secured funding for a Michigan cannabis property owner/operator who needed $2.3M for a cash-out refi and construction to build out a cultivation and dispensary property.  The borrower is very satisfied with both the process and the terms.

Cannabis Property

Recently secured $2.5mm refinance for SW U.S. cultivation facility. The borrower is very pleased with the outcome.

Recently secured $2.1mm funding for the acquisition of a Colorado indoor cultivation facility.

Several additional completed transactions in 2021

Cannabis Property with deep industry relationships and a network of enthusiastic lenders, our team will confidently guide you through the application and underwriting process. Our lending partners are experienced and well-capitalized professionals that require moderate leverage. A visible repayment strategy, and offer competitive terms and pricing.

(We have loan options available for working capital for other uses as well!)

Contact Us today to become our next success story!

#cannabisrealestate#cannabisconstruction#cannabis#cannabisequipment#cannabisfinancing

Cannabis Accounting Services

Accounting Services

Do you need accounting services for your cannabis business?

We have a solution!  We have partnered with an accounting services premier accounting firm offering simplified, streamlined solutions for this complex emerging industry. 

 

  • CFO Services:  The expert finance support you need when you need it
    • Bi-weekly meetings with your virtual CFO
    • The fully outsourced accounting department
    • Custom financial reporting
    • A fraction of the cost of hiring internally
  • Bookkeeping & Payroll:  Automate your back office
    • Bank & credit card reconciliations
    • Clear and accurate monthly financial statements
    • Bill pay services
    • Payroll processing and filings
  • Tax Services:  Keep all your accounting needs under one roof with a tax package
  • Real CPAs
    • Strategic tax planning
    • Business tax return filings
    • Personal tax return filings
  • Additional Services:
    • 280e compliance
    • Industry-specific reporting
    • Personal dedicated support
    • Legal professionals
    • Taxes

Contact Us today to learn more about how our partner can help with all your accounting needs and make sure you are ready when it comes time to borrow money for your growing business!

#cannabisaccounting#cannabisfinancing#cannabisfunding

Cannabis Industry Flourishing Despite COVID

https://dynaltfinance.com/

Las Vegas (CNN Business)

When members of the cannabis industry descended upon Las Vegas last week for the biggest trade show in the business, something was stirring in the air. It wasn’t the aroma of a freshly lit joint. But instead, everything seems to be coming up roses for the businesses.

Despite a global pandemic, discombobulated supply chains, ballooning inflation, and an ongoing fight to legalize marijuana on a federal level, the cannabis industry in America is flourishing.

Cannabis Industry Flourishing

Sales hit $20 billion in 2020, are on pace to top $26 billion this year, and are projected to leapfrog to $45.9 billion in 2025, according to data from frohttps://www.cnn.com/2021/10/28/business/cannabis-booming-industry-mjbizcon/index.html m Marijuana Business Daily that were shared at the MJBizCon, the industry’s annual trade show. The nearly $46 billion in sales would make the cannabis business more significant than the craft beer business, said Chris Walsh, chief executive officer and president of MJBizDaily.

Equipment Financing Basics

The cannabis industry is burgeoning, with existing firms working to gain market share and numerous potential firms looking to enter the marketplace and equipment financing.

Regardless of the precise stage a business has reached, wisely investing in top-of-the-line equipment might well be the most critical perspective capital expenditure any cannabis brand or manufacturer will make. Equipment can be expensive and highly specialized, and newly improved technological iterations are introduced at a frenzied pace.

Scaling while staying technologically current is a huge challenge that requires adequate financing of modern equipment and technology. Arranging for that financing via conventional avenues, cannabis companies soon realize, is no easy task. Companies quickly learn that accessing traditional debt markets — particularly bank loans — is difficult, if not impossible.

The business can consider equity capital raises ranging from an initial friends and family round, to a substantial venture capital-backed funding series. While there’s no question that equity funding can be both vital and beneficial for cannabis firms, there are drawbacks. Companies can anticipate elevated discount rates demanded as compensation for perceived high risk. Post-money capitalization structures will virtually always be dilutive and in many cases, proposed dilution is so substantial that it jeopardizes ownership control.

Finally, there is likely a misalignment between the time horizon of equity investments, which are frequently permanent, and the economic reality of using those funds to purchase capital goods, which depreciate significantly in value virtually immediately.

The ultimate salvation of the U.S. cannabis industry may well come in the form of non-bank specialty finance firms. Specialty finance firms typically provide financing structures to businesses unable to tap the broader capital markets. Such firms are beginning to offer cannabis businesses an array of mechanisms to access equipment and technology without dilution or onerous credit terms.

The beauty of specialty financing transactions — especially leasing and royalty structures — is that upfront costs for customers are minimized. For these businesses, where free cash flow and burn rate are vital, spending less cash at the outset is a huge leg up. Done well, with technology in hand, the business can throw off cash in the near term, allowing it to easily meet monthly payments.

The best specialty financiers will effectively allow companies to move forward with scaling efforts by ensuring that supplementary and next-generation equipment/technology is accessible at reasonable cost when needed.

Cannabis businesses that turn to specialty finance can often, when desirable, turn variable costs into fixed costs. In many cases, firms can avail themselves of notable tax benefits and deductions.

In theory, the emergence of specialty finance firms with subject matter expertise in cannabis technology is transformative, democratizing the industry and providing a level playing field on which those companies with the best business models and products will have the opportunity to prosper. However, not all specialty financing arrangements are made equal.

Here are some basics on our capital equipment leasing program, including what items we need to proceed.

We arrange Capital Equipment leases to manufacturing companies, processors, growers and dispensaries.  We typically lease extraction equipment, roto-vap systems, chillers, cartridge filling equipment, lab equipment, generators and most of the more popular LED grow lights.  Any requested items below $10K will not typically qualify.

Our industry knowledge and extensive network of private investors helps us deliver solutions to achieve our client’s and partner’s financial requirements.

 

Our program structure is tailored to clients individually based on what fits their criteria.  Below are basic guidelines and general terms. However, each project is viewed individually and terms could vary slightly on a case-by-case basis.

 

Types of Equipment We Can Get Financing For:

Cultivation:  Lighting, irrigation, Security

Processing and Manufacturing:  Includes dryers, extraction equipment, distillation, refrigerators, packaging

Build-out:  HVAC, solar, generators, lighting

Testing:  Equipment for labs including mass spectrometry

 

Capital Equipment Leasing Basics

 

Equipment Lease to Own

  • $250K – $10mm
  • 24-48 Month Leases (principal + interest)
  • 30% to 50% down payment (Typically finance up to 70% of the equipment’s hard cost)
  • Personal Guarantee required (or corporate)
  • $1 Buyout at end of the lease term

 

Submission Requirements:

  • 2 years tax returns
  • 3 months bank statements
  • PFS – Personal Financial Statement from all personal guarantors (or up to date corporate financials – Profit &Loss, Balance Sheet)
  • Need to show the ability to pay down payment plus first 6 months of lease payments (cash on hand)
  • List of equipment from manufacturer – itemized quotes for equipment from the equipment manufacturer

Benefits of a Capital Equipment Lease:

  • Conserves working capital
  • Allows companies to better manage budgeting cycle
  • Inherent tax benefits
  • Master Lease Agreements make follow on transactions much easier.

 

Why work with us:

 

We have been serving this industry since the recreational initiative first passed in Colorado seven years ago.  We partner with the most reputable lenders and know how to get deals across the finish line.

 

Structure/Term Optionality: The needs of each customer are unique, and so we are able to offer a range of programs depending on the life cycle of the business and its unique circumstances.

Technological Expertise Throughout the Life Cycle: Elite specialty finance providers serve as valued business partners, anticipating customers’ needs and standing ready to meet them. Cannabis technology is specialized and it’s continually changing — different machinery may be needed for different processes and the innovation curve is steep.

White glove service: Financing is a complex, involved process and we go further, offering our clients comprehensive support throughout the process.

Success Story:

 

Situation: An equipment vendor needed financing for his customer. The vendor was going to lose the sale unless alternative financing was obtained.

Solution: An equipment finance agreement with a large down payment that compensated for the customer’s weak financial profile. The customer received an affordable monthly payment for the next two years.

Results: The vendor made the sale and is putting people to work in his factory. The customer is now maximizing their warehouse space with the new equipment.

 

Contact us to become our next one!

 

 

 

SAFE Banking Act Update

THE SAFE BANKING ACT AND THE 117TH CONGRESS

During the 116th Congress, the SAFE Banking Act (Secure and Fair Enforcement-H.R. 1595/S. 1200) became the first cannabis-related bill passed by a chamber of Congress. In September of 2019, SAFE came to the House Floor and passed by a significant margin of 321-103.

The SAFE Banking Act would allow banks and financial institutions to legally do business with the cannabis industry without fear of federal arrest or prosecution or other punitive actions. This proposal had been considered the most likely piece of cannabis legislation to pass in the current Congress and will likely get new life in the incoming session.

While the bill had a hearing in the Senate Banking Committee back in the summer of 2019, unfortunately, it did not gain the momentum needed to move forward.

In addition to the bill itself, the SAFE Banking Act was also included in not one but two COVID-19 relief packages passed by the House, known as HEROES I & II. Again, it succumbed to the objections of the Republican leadership and was removed from the bills.

Senate Banking Committee Mike Crapo (R-ID) detailed his opposition to policy reform:

SAFE Banking Act Update

“I remain firmly opposed to efforts to legalize marijuana on the federal level, and I am opposed to legalization in the State of Idaho. I also do not support the SAFE Banking Act that passed in the House of Representatives. Significant concerns remain that the SAFE Banking Act does not address the high level potency of marijuana, marketing tactics to children, lack of research on marijuana’s effects, and the need to prevent bad actors and cartels from using the banks to disguise ill-gotten cash to launder money into the financial system.” 

Currently, 33 states have some form of legal marijuana for various uses.  This has created challenges for businesses in those states and has increased pressure for depository and financial institutions to provide financial services to state-sanctioned businesses and ancillary services providers that may provide services to state-sanctioned businesses.  The ancillary service providers offer various services to state-sanctioned businesses, such as legal services, plumbing services, fertilizers and other agricultural supplies, real estate, and leasing, among many others.  As a result, Senators Jeff Merkley (D-Oregon) and Cory Gardner (R-Colorado) introduced S. 1200 on April 11, 2019.  While marijuana would still be illegal at the federal level, this proposed legislation seeks to provide legal certainty for banks who wish to serve not only marijuana companies but also the ancillary service providers, meaning that banks can accept cash from legally-operating state cannabis companies and related service providers without the fear of adverse actions being taken against them by federal financial regulators.

There is, however, reason for optimism: in the next session, the SAFE Banking Act will be back, with even better chances to pass! Sources have indicated they expect the bill will be reintroduced in both the House and Senate in the next 1-2 months, and this time look forward with fingers crossed to a more favorable outcome.

Cannabis banking legislation:

Prospects for passing legislation making it easier for marijuana businesses to access banking rise significantly with Democrats controlling the Senate. The SAFE Banking Act enjoys broad bipartisan support: It passed the House with support from nearly half of the chamber’s Republicans on board, and five GOP senators co-sponsored the bill in the last Congress. But McConnell’s reluctance to bring any marijuana bills to the floor for a vote hamstrung its ability to advance.

Sen. Sherrod Brown (D-Ohio) is expected to become the next chair of the Senate Banking, Housing and Urban Affairs Committee. Brown didn’t cosponsor cannabis banking bill in the last Congress. Still, he said in several interviews during the 116th Congress that the banking bill was something Democrats wanted to work on with Republicans.

Democrats’ control of Congress and the White House has brought financial institutions and cannabis businesses closer than ever to legislation enabling them to work together. But how exactly lawmakers enact pot banking reform has also become more complicated.

After the victories by President-elect Joe Biden and Senate Democrats, some observers urge quick action on the legislation. Others say the change of power presents an opportunity to go further and decriminalize marijuana altogether, which would give depository institutions more cover to cater to an industry under a legal cloud.

“By de-scheduling cannabis, it would remove the conflict immediately and banks would have no legal issues with working with cannabis businesses because they would be in no violation of federal law,” said Morgan Fox, a spokesperson for the National Cannabis Industry Association.

Democrats controlling the Senate could position Congress to pass the Marijuana Opportunity Reinvestment and Expungement Act, or MORE Act, which would remove marijuana from the list of scheduled substances under the Controlled Substances Act.

Some analysts believe the Democrats’ election sweep means they will attempt passing the MORE Act before pursuing one of the other two bills as a backup.

“We are more likely to see legalization legislation attempted first before Congress looks to the STATES Act as a fallback,” said Jaret Seiberg, an analyst at Cowen Washington Research Group. “If you get legalization, you won’t need special banking protections, because there won’t be any illegal activity at the federal level anymore.”

But, Seiberg added, if the Senate fails to pass either of those, “the spotlight then goes back to the SAFE Banking Act.”

Despite this positive outlook, traditional banking for the cannabis industry is likely not happening soon, and it is important for the industry to continue to have other financing options.

The passage of the Farm Bill three years ago has not yet changed the banking and lending outlook for hemp and CBD companies in any significant way.  This indicates that the ability for THC businesses to get traditional bank funding is not happening any time soon despite many positive legislative changes currently pending at the federal level.

 

-John Morris
Vice Chair, Banking Finance Committee
National Cannabis Industry Association