Strategy vs Planning - you’ve got homework to do.

Welcome to the Vetrina step-by-step guide to “Crushing Your 2025 Cannabis Retail Revenue: Step 1”

Now that you’re refreshed on Vetrina’s 7 Core Sales KPIs and you’ve had a chance to review your current sales data and core KPIs, you want to know what’s next. 

Step 1 involves creating Retail Forecasts, based on your cannabis dispensary’s winning strategy. 

What’s a winning strategy? 

A winning strategy is an integrative set of choices that positions you on a playing field of your choice in a way that you win. 

Strategy has a theory.

• Here's why we should be on this playing field, not this other one, and here's how, on that playing field, we're going to be better than anybody else at serving the customers on that playing field.

For a great strategy, that theory has to be coherent, doable, and translateable into actions.

Your team has probably come to you with lots of suggestions. These are most likely tactical, which means they’ll get included in your annual planning. But don’t mistake these as your strategy.

Let’s talk about Planning

Planning does not have to have the same coherence as your strategy, and it typically is what people want, want to build, or execute.

For example: Build a store, Launch a brand, or Hire more people

A list of ‘to-dos’ or ‘tactics’ that ladder up to a business objective which are defined by the greater umbrella of the strategy. Great, what’s the hitch?

Planning is comfortable because individuals can control them.

Plans typically have to do with the resources you're going to spend. So we're going to build a plan. We're going to hire some people. We're going to launch a new product. Those are all things that are on the cost side of businesses. Who controls your costs? Who's the customer of your costs? The answer is, you are. You decide how many square feet to lease, how many raw materials to buy, and how many people to hire.

Strategy is tricky because you have less control.

So that means putting yourself out and saying, here's what we believe will happen. We can't prove it in advance; we can't guarantee it, but this is what we want to have happen and that we believe will happen.

It's much easier to say, I'll build a factory, I will hire more people, etc., than I will have customers end up liking our offering more than those of competitors.

The most important thing to recognize is that strategy will have angst associated with it. It'll make you feel somewhat nervous because as a manager, chances are you've been taught you should do things that you can prove in advance. You can't prove in advance that your strategy will succeed. You can look at a plan and say, well, all of these things are doable. Let's do those because they're within our control. 

But they won't add up to a strategy that crushes your 2025 retail revenue in today’s market.

Now that we know the difference, revisit or map out your strategy. At Vetrina we map out our strategy on 1 page. It doesn’t need to get too complicated. As yourself: 

What would have to be true about ourselves, the industry, the competition, and the customers for this strategy to work?

This is going to answer the WHY you’ll achieve this goal, and the aspirations your business might have.

This big-picture thinking becomes the foundation for your Cannabis business over the coming year.  Then you lay out the logic (the plan) almost like a roadmap towards your success. 

What comes next? Your Cannabis Retail Forecasts. 

Retail Forecasting Like a Boss

Retail forecasting is essential for effective dispensary planning, allowing you to predict demand, allocate resources effectively, and make proactive decisions to enhance your operations.

Forecasts outline your retail strategy by answering the fundamental question of ‘what’ and ‘why.’

What market segments will you target? What unique value do you offer your customers?

Why will customers choose your store over others? What is your competitive advantage?

Every team member, department, and vendor will use these forecasts as a north star for their planning and tactics throughout the year. 

The Vetrina team has encountered several retail forecasting challenges and has created what we believe to be an effective process for accurate forecasting. Let’s get to it.

Mastering Cannabis Retail Forecasting: Your 3-Step Guide

Accurate forecasting is the backbone of thriving cannabis retail. In an industry where market trends can shift rapidly, and customer demands evolve quickly, forecasting isn’t just a nice-to-have—it’s a critical component of your business strategy. 

Effective forecasting enables you to make informed decisions, optimize inventory, spot trends early, and plan for sustainable growth. In this comprehensive guide, we’ll walk you through Vetrina’s streamlined 3-step process to set up a retail forecast that’s both simple and effective, helping you stay ahead in the competitive cannabis market. 

But let’s start by telling you why it’s so important.

Why Retail Forecasting is Crucial

Retail forecasting is about more than just predicting sales numbers; it’s about positioning your dispensary for long-term success. When done correctly, forecasting allows you to anticipate demand, allocate resources wisely, and make proactive choices that enhance your operations. 

With a solid understanding of your market, customers, and competitors, you can predict future sales and adjust inventory levels accordingly, ensuring that you meet customer needs without overstocking or understocking.

What are the steps…

Step 1: Setting Your Annual Revenue Goals

Your annual revenue goals are the cornerstone of your dispensary’s financial strategy. We’ve talked about it before, but these goals provide direction and focus, ensuring that every aspect of your business is aligned with a clear financial target. 

But setting these goals is more than just picking a number out of thin air; it requires careful analysis and a balance between ambition and realism.

The Role of Revenue in Your Business: Revenue is the lifeblood of your dispensary. It informs your strategies, influences decision-making, and ultimately determines your success. Integrating revenue goals into your business plan is essential for long-term sustainability. These goals help you:

• Determine Scale: Understanding the scale of your operations is crucial. Are you a boutique dispensary focusing on niche products, or are you aiming for large-scale sales across multiple locations? Your revenue goals should reflect the scale and scope of your business.
• Allocate Resources Wisely: Revenue goals guide your resource allocation. Knowing how much you expect to earn allows you to make informed decisions about investments, staffing, marketing, and inventory management.
• Evaluate Financial Health: Regularly assessing your progress toward your revenue goals helps you evaluate your dispensary’s financial health. This ongoing evaluation allows you to identify areas for improvement and make necessary adjustments.

Why Clear Revenue Goals Matter: Setting clear revenue goals is critical for several reasons:

• Focus: A well-defined revenue goal aligns your team’s efforts toward a specific financial target. It provides a clear direction and helps ensure that all departments are working towards the same objectives.
• Motivation: Revenue goals inspire and unite your team around a common purpose. When everyone understands what they’re working towards, it’s easier to maintain morale and motivation.
• Measurement: Clear revenue goals provide a benchmark for measuring progress. They allow you to track your success, identify areas for improvement, and celebrate milestones along the way.
• Market Understanding: The process of setting revenue goals encourages a deeper analysis of market trends, competitive forces, and customer preferences. This analysis often uncovers hidden opportunities and threats that you can address proactively.
• Investor Appeal: A robust revenue plan demonstrates strategic thinking and a clear path to profitability, making your dispensary more attractive to potential investors. Investors want to see that you have a solid financial plan and that you’re actively working towards achieving it.

Crafting Your Annual Revenue Goal: Setting an effective annual revenue goal requires careful analysis and a balance between ambition and realism. Here’s a streamlined approach:

• Assess Your Current Financial State: Begin by evaluating your dispensary’s current financial health. Look at your existing revenue, profit margins, and growth rates. Consider how your business has performed over the past few years and whether there have been any significant changes in the market.
• Analyze Market Dynamics: Study the broader market to understand trends, competitive pressures, and potential growth opportunities. This analysis should include a look at consumer behavior, regulatory changes, and economic factors that could impact your business.
• Forecast Using Historical Data: Leverage historical sales data, financial statements, and market research to project future revenue. Use financial modeling tools to create different scenarios based on various assumptions. If necessary, consider seeking expert advice to ensure your projections are realistic and accurate.
• Integrate Your Goal into Your Business Plan: Once you’ve set your revenue goal, integrate it into your overall business plan. Ensure that your goal aligns with your dispensary’s mission, vision, and strategic objectives. This alignment will help ensure that all aspects of your business are working towards the same end.
• Adapt as Needed: Regularly track your progress toward your revenue goal. If you find that your projections were too ambitious or too conservative, be willing to adjust your strategies and goals as needed. Flexibility is key to maintaining long-term success.

Step 2: Measure Your Progress with Consistent Timeframes

Consistency is crucial when it comes to measuring progress. Accurate comparisons rely on consistent data lengths, which is why we recommend using weeks, rather than months, as your unit of measurement. By breaking the year into 4-week “sprints,” you can track performance more accurately and make data-driven decisions with confidence.

Why Weeks, Not Months? Weeks offer several advantages over months:

• Consistency: Weeks always contain 7 days, unlike months, which vary in length. This consistency ensures that you’re comparing apples to apples when analyzing data across different time periods.
• Precision: Weeks allow for more granular analysis, which is particularly useful for identifying short-term trends and cyclical patterns. This precision is invaluable in the cannabis industry, where market conditions can change rapidly.
• Versatility: Weeks are standardized across industries, making it easier to compare data from various sources. Whether you’re benchmarking against other cannabis retailers or analyzing internal trends, weeks provide a reliable baseline.

Boosting Agility with 4-Week Sprints: Breaking the year into 4-week sprints provides a structured rhythm for managing and analyzing data in your dispensary’s operations. This approach offers several benefits:

• Balanced Timeframe: 4-week sprints align well with natural work cycles, allowing for efficient tracking and evaluation of progress. This structure makes it easier to manage both short-term tasks and long-term projects.
• Regular Reviews: The shorter timeframe enables more frequent performance reviews and agile adjustments. By reviewing your progress every four weeks, you can make course corrections before small issues become big problems.
• Financial Alignment: 4-week sprints often align with payroll periods, simplifying financial reporting. This alignment reduces the administrative burden and ensures that your financial data is always up-to-date.
• Performance Measurement: 4-week sprints provide a balanced timeframe for setting goals and evaluating performance. This sweet spot between short-term and long-term analysis allows you to capture meaningful data while staying agile enough to adapt to emerging trends.
• 13-Period Structure: Using 4-week sprints results in 13 periods per year, rather than the traditional 12 months. Though unconventional, this structure often aligns with payroll cycles and provides more frequent opportunities for evaluation, course correction, and accurate financial reporting.

Implementing Measurable Timeframes: Implementing a more responsive and data-driven planning cycle can be simple. Here’s how to translate the benefits of 4-week sprints into tangible actions for your dispensary:

• Evaluate Your Needs: Determine the frequency of data analysis needed to support your dispensary’s decision-making. Consider how often you need to review performance metrics to stay on track.
• Choose Weeks as Your Unit of Measurement: Select weeks as your unit of measurement for consistent data lengths. This consistency will help ensure that your analysis is reliable and accurate.
• Divide the Year into 13 Four-Week Sprints: Break the year into 13 four-week sprints, clearly defining start and end dates for each period. This structure provides a consistent rhythm for tracking and evaluating progress.
• Educate Your Team: Ensure that your team understands the importance of consistent data lengths and the benefits of using sprints. Provide training and resources to help them adapt to this new approach.
• Implement Robust Systems: Establish a data collection and analysis system that supports the new timeframes. Whether you’re using software tools or manual processes, make sure that your system is capable of handling the demands of 4-week sprints.
• Regularly Review and Adjust: Regularly assess the effectiveness of your chosen timeframes and make adjustments as needed. Stay flexible and be willing to tweak your approach based on what’s working and what’s not.

By breaking the year into measurable timeframes and aligning them with your dispensary’s rhythms, you’ll unlock deeper insights to make more informed decisions and keep your people motivated.

Step 3: Project Your Average Customer Spend

Your average per customer (APC) is a critical metric that reveals how much each customer contributes to your revenue. Although not a perfect metric, as it doesn’t always tell the complete story at a store-specific level, you need this metric as a baseline for the business. Therefore, understanding and projecting your APC is essential for setting realistic benchmarks, guiding your team, and driving sustainable growth for your dispensary.

Factors Influencing APC: Several factors influence your average per customer, including:

• Product Quantity: The number of items customers buy per transaction directly impacts your APC. The more items they purchase, the higher your APC.
• Price Points: The price points of your products also play a significant role. Premium products will naturally increase your APC compared to lower-priced items.
• Market Benchmarks: In the cannabis industry, the average per customer in North America typically ranges between $38 and $87. Knowing where your dispensary falls within this range can help you set a healthy benchmark.

Predicting Your Average Per Customer: To accurately predict your APC, consider the following:

• Customer Behavior: Analyze the purchasing patterns, preferences, and demographics of your target market. Understanding what drives your customers’ buying decisions will help you make more accurate predictions.
• Historical Data: Look at trends in past sales and customer interactions. Historical data provides valuable insights into how your APC has changed over time and can help you identify patterns.
• Market Conditions: Factor in seasonal trends, economic factors, and competitor pricing when projecting your APC. These external influences can have a significant impact on customer spending habits.
• Product Mix: Evaluate the price points and perceived value of your product offerings. A diverse product mix that caters to different customer segments can help boost your APC.

Leveraging Tools for Accurate Projections: To ensure accurate predictions of your APC, utilize a variety of tools and resources:

• Vetrina’s Forecasting Features: Vetrina’s forecasting tools can help you analyze historical data and generate projections tailored to your specific product mix and market trends. These tools are designed to simplify the forecasting process and provide actionable insights.
• Advanced Analytics Tools: Use advanced analytics tools to uncover patterns and trends in customer behavior that inform your predictions. These tools can help you make data-driven decisions that optimize your revenue potential.

Conclusion

By understanding the nuances of strategy versus planning, you'll be better equipped to set ambitious goals for your cannabis retail business. By focusing on key performance indicators, setting clear revenue goals, and utilizing effective forecasting techniques, you can position your dispensary for long-term success.

P.S. Revenue projections are not set in stone—they’re dynamic tools that assist you in making informed decisions. 

Embrace a process that works for you and your teams, be flexible and regularly review your performance, so you’ll be well-positioned to achieve your financial goals each week, each period, each quarter and finally your year.