Chains reorder every two weeks and earn twice the discounts. Independents stock the same breadth of product and win on everything that isn’t a spreadsheet.
Dispensaries generally fall into one of two camps: part of a multi-state chain, or an independent operator. Those independents might own several stores within one state (a single-state operator), or they might be a classic “mom & pop” shop with a single location. Consumers have good reasons to shop at either, and sometimes it just comes down to location and convenience. However, when pressed, it seems renegade cannabis consumers prefer the indies.
Consistency and Pricing
One argument for chain dispensaries is consistency. Shoppers who travel between legal states may prefer a recognizable name — if they know a brand from their home state, they can trust the product selection will be reliable. These customers may worry about wasting a trip on a local independent store that doesn’t carry the brands they’re used to. Chains may also be able to secure better prices simply because they’re buying inventory at scale. According to Chain Store Age, 85% of respondents cited lower prices as their reason for shopping at a chain, while 71% cited greater product variety.
Better Pricing
“The economies-of-scale assumption holds,” said Mitch Barton, VP of Transformation at Sun Theory, which operates in the wholesale market described here. The company has collected recent data looking at wholesale orders across five states, broken down between independents and chains. Barton said chains earn roughly twice the discounts and credits that independents do — about 4% to 5% of sales versus 2%. Per unit, the edge is modest, but he said it’s consistent, and it favors scale.
He added, “One of the biggest takeaways from our wholesale data is that the difference between chains and independent dispensaries isn’t how much …
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Author: Debra Borchardt / High Times
