Average retail space in cannabis stores climbs sharply

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The average size of retail space in cannabis stores jumped in 2020 amid increased consumer demand and the COVID-19 pandemic, rising 50% for medical dispensaries and 35% for recreational shops.

Medical dispensaries averaged 3,357 square feet of retail space in 2020, while recreational shops averaged 4,308 square feet, according to owner surveys compiled for the 2021 MJBizFactbook.

Increased consumer demand during the pandemic likely contributed to larger retail space as retailers incorporated social-distancing standards.

That, in turn, could  have led to the conversion of some nonretail parts of stores, such as storage areas or breakrooms.

But much of the square-footage growth can be attributed to the maturing of cannabis markets as owners expand to meet demand and competition by adding new features and space to attract consumers.

This has been the experience of David Fettner, a managing partner at Illinois-based Grow America Builders, which specializes in design and construction for the cannabis industry. 

Fettner said stores in states that are just starting out, such as West Virginia, will have a small footprint of 900 to 1,200 total square feet.

But for more mature states, including Illinois and New Jersey, the sweet spot is 4,200 square feet.

Fettner said stores in mature states are looking to add bells and whistles to enhance the customer experience, such as glass-encased VIP rooms.

“That’s not something where you would take up existing square footage,” Fettner said. “That’s something where you add new square footage for.”

Growth can also come from regulatory changes.

Arizona limited the footprint of medical marijuana stores, but many of those stores are now expanding after acquiring adult-use licenses.

Fettner said store owners should plan for expected and unexpected growth when looking at their square-footage needs.

And while maximizing retail space is important to profitability, Fettner advised companies to think about the back of the house when considering a store’s square footage, especially with the recent competitive nature of retail employment.

“Two years ago it was, ‘Get them up and running.’ Now everyone is realizing, ‘Hey, our staff is really important. We spend a lot of time and money in training them.’”

Fettner suggests taking a collaborative approach during the design phase to make sure everyone’s needs are met.

Andrew Long can be reached at andrew.long@mjbizdaily.com.