(This story is part of the cover package in the September issue of MJBizMagazine.)
In the months before Ulysses Youngblood opened the doors to his dispensary, Major Bloom, in August 2021, passersby in the lower-income neighborhood in Worcester, Massachusetts, where the store is located, would stop him in the street and say, “I’m not paying $20 for a pre-roll.”
“These are real people. They’re thinking about their pocketbooks,” Youngblood recalled. And if Major Bloom didn’t offer quality products at low prices, those people would continue to patronize the illicit market and his store wouldn’t survive.
But Youngblood’s strategy focused on the most devoted flower consumers, whom he tries to provide nearly 20 popular and unique strains at prices that can compete against the illicit market.
“It’s being very intentional about the target market, and we consider our target market legacy users. When we have a really good, economical flower menu, it draws in people who really like weed,” Youngblood said. He added that his store often has 10 flower strains priced at $25-$30 per eighth-ounce, while competitors might have only one or two strains at that price. “We have so many of those SKUs that people are compelled to spend money with us.”
Although Youngblood received the 12th and final license in Worcester, located in what is arguably Massachusetts’ most saturated county for marijuana retail, his sales have increased month over month, and he believes there is enough business for his company to thrive, not just survive.
“There is enough space for different players,” Youngblood said. “We all have our own niche.”
Tricks of the trade
Smart pricing, product variety and quality as well as finding ways to distinguish your operation are among the keys to small-business success.
Achieving those goals can be challenging in regulated cannabis markets, where small businesses compete not only against the illicit market but also marijuana multistate operators (MSOs) that can absorb losses for longer and leverage economies of scale.
“It’s tough to compete in a limited-license market like Maryland,” said Hope Wiseman, founder and CEO of Mary & Main dispensary in Prince Georges County, Maryland.
“There are vertically integrated competitors who have the best margins. They can capitalize on economies of scale and having more resources. A lot of MSOs can play loss leader. They can do poorly or take losses in Maryland but make up for it in more active states.”
That’s not to say that small business owners should give up and shut down. In the following pages, we share tips and strategies that small-business owners can use to reach profitability and even prosperity.