Missouri is ramping up to finally open its first medical marijuana dispensaries. While this is an exciting time for businesses and patients alike, dispensaries are plagued with misconceptions that could cost them dearly.
Myth 1: Missouri dispensaries will enjoy a captive market.
In recent history, as states have legalized medical or recreational marijuana, they have enjoyed a captive market. State medical licenses are not valid across state lines, so if you have a license for Missouri, you can only buy from Missouri dispensaries. The exception to this is purchasing a guest pass to a neighboring state (Oklahoma famously allows this, for example).
While the first states to legalize medical marijuana definitely enjoyed this benefit, Missouri dispensaries may be in for a rude awakening. For starters, while dispensaries are just now beginning to open, Missouri residents have had their medical licenses since 2018. They have been buying guest passes for years now, allowing them to build loyalty to dispensaries across state lines.
While the cost of the Oklahoma guest pass ($100) will cause many patients to shop within Missouri, many who have the financial means could continue to shop where they feel most comfortable. If Missouri experiences a shortage of flower and correlating high prices, something that is common when medical or recreational dispensaries open for the first time, patients may be reluctant to give up the relationship they have with an out-of-state dispensary.
Dispensaries may enjoy a flood of demand right as they open, but planning your business with such a short-sighted goal could leave you struggling six months down the road.
Myth 2: High demand and limited competition will keep profit margins high for growers.
While you can expect initial demand to be high, Missouri is too late in the game to base sustained business model from it. Missouri growers currently enjoy limited competition and high demand. After all, Missouri dispensaries can only buy from Missouri growers. However, the cultural shift of mainstream marijuana acceptance is quickly shifting, which could decimate Missouri growers if they aren't ready for competition.
Not only are more and more states considering legalization, House Democrats are also beginning to push for federal decriminalization. They currently have a bill on the House floor that would decriminalize marijuana on the federal level, allowing prison sentences to be eased or forgiven, but also allowing some interstate commerce related to marijuana business.
If states are allowed to start selling their home-grown weed across state lines, it spells big trouble for Missouri growers. The states that have been growing for years not only have large grow farms established, but even have a huge over-supply. If states, like Oregon or California, begin to sell across state lines, they will drive down the price of marijuana, which will hit brand new grow farms in Missouri hard.
Myth 3: Sustained high demand removes the need for marketing or establishing a brand for dispensaries.
It may be tempting to sit back and let the demand come to you. However, even the first two myths aside, you need to be prepared to compete with local dispensaries. Attempting to market your dispensary via social media can be tricky since Facebook and Instagram remove dispensary pages with little to no explanation.
There are alternatives, and every single Missouri dispensary should be using it. It is a platform called Weed Maps. While the app acts primarily as a mapping service to locate dispensaries, doctors who approve medical marijuana certificates, and other services, each dispensary listed has access to a company page. While many use this page for only basic contact info, saavy dispensaries have turned theirs into a marketing page to drive in-person sales.
Take a look at the difference between these two dispensary pages. The first is from an Oklahoma-based dispensary called Classy Grass. Even though they were one of the most recent dispensaries to open in Miami, OK, they have already filled their Weed Maps profile to the brim:
There is no question about what their brand is, what products they carry, and what specials they offer. They have plenty of media to demonstrate they are an active dispensary, and a first-time patient will feel this is a reputable business.
Now let's compare with another dispensary also located in Miami, Oklahoma. They are called Frapp House Dispensary. Let's take a look at their profile:
They have no posted media, no listed deals, and no business information other than hours and their licensing available. There is no branding, and the only real information you can gather from their WeedMaps page is that this business sells weed.
This means that they are relying on an extremely small, limited customer base that happened to try them and happened to prefer them to other dispensaries. Even for businesses offering a high-quality, unique product, this is a dangerous way to run your business.
This is particularly troubling since it would take minimal effort to create a page that is informative, inviting, and immediately establishes your brand.
What Should Missouri Marijuana Growers and Dispensaries Do?
Missouri marijuana growers and dispensaries should be prepared to fight for their customers and their business. Taking a passive role may work in the short term, but for long-term success, a solid brand voice, the ability to meaningfully engage with customers, and consistently clear marketing are what will set growers and dispensaries a part from well-established brands and out of state farms.
Think you might need help? We specialize in dispensary brand management, customer engagement, and social media outreach. We can even help set up WeedMap profiles. We would love to help your business grow! Contact us and let's get the conversation started!
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