How Digital Payments Increase Dispensary Profits on Green Wednesday

Green Wednesday, the day before Thanksgiving, is the second largest cannabis holiday (behind 420). 
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It’s a time when consumers visit dispensaries to stock up on products before a day of family and food—as well as a time for retailers to run discounts and attract more shoppers. 

But outside of merely selling more cannabis, a new trend is emerging where dispensary customers are opting to avoid cash and make purchases online and in-person using digital Automated Clearing House (ACH) payments. 

This post looks at data from 2022, specifically during Green Wednesday, to uncover the impact of digital payments on dispensary profits. 

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In general, Green Wednesday 2022 saw massive sales

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Last year, Headset reported dispensaries on Green Wednesday saw a 48% sales increase compared to the three previous Wednesdays in November for retailers in California, Colorado, Massachusetts, Michigan, Nevada, Oregon and Washington. 

When it was all said and done, Green Wednesday was the third biggest sales day in 2022—further confirming the assumption that people want weed before Thanksgiving. 

But while Green Wednesday brings higher sales, it’s been called a “double edged sword” for retailers by Ben Stevens at Business of Cannabis. This is because data reveals that while holiday sales were up, an increase in discounts triggered widespread declines in gross margin. 

In all, Green Wednesday is still a big day for cannabis retailers and should be treated as such. To maintain profits during the holiday, dispensaries can take measures to both capitalize on increased foot traffic and keep gross margins level—and it all starts by leveraging digital payments. 

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Digital payments paid off on Green Wednesday

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To uncover how consumer spending with digital payments is impacted by a major cannabis holiday like Green Wednesday, we dove into Aeropay data from last year. The two key takeaways were: 

1. 1. Compared to an average day in 2022, dispensary digital payment transactions on Green Wednesday were 97% higher. 
2. 2. Compared to an average day in 2022, dispensary revenue from digital payments was 178% higher on Green Wednesday. 
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This means significantly more cannabis shoppers paid via ACH on Green Wednesday—and dispensaries capitalized, earning far more revenue. 

Not only was revenue higher for dispensaries using Aeropay, they also had a greater opportunity to increase gross margins and maximize profits than cash-only retailers. See the next section for more details. 

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How digital payments benefit dispensaries on Green Wednesday

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We’ve previously covered how digital payments are revolutionizing the way dispensary customers pay, ultimately solving the industry’s payments crisis. 

Now, let’s look at the ways digital payments impact a dispensary’s bottom line and increase profits, specifically on high-volume, high-discount days like Green Wednesday.  

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Reduce costs and increase efficiency

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Handling cash can cost retailers between 4.7 and 15.3 percent of a transaction. Replacing cash with digital payments saves dispensaries anywhere from $5 to $15 for every $100 in sales. 

Digital payments are also the only viable way dispensaries can accept pre-payments (pay online, pick up in-store) for cannabis products. Pre-payments guarantee every online order will be paid for (and almost always picked up). It also eliminates the need for budtenders to check customers out. Plus, Harvard Business Revenue found pre-payments increase purchases for higher-priced items. 

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Increase revenue

We’ve already seen that digital payment revenue is much higher on Green Wednesday. But if your margins are lower, profits can still increase if you’re driving greater spending and conversions. Digital payments drive higher profits through increased revenue because customers who use ACH payments:

• • Spend 25% more per order

• • Complete online orders 30% more often

• • Return to shop online 37% more often

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Enhance cash flow

Digital payments involve electronic fund transfers that are settled faster than many traditional payment methods. This results in quicker access to funds for your business and improves your cash flow.
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Some believe cash flow is actually more important than profits because it’s a more accurate representation of business health. Preserving accurate and timely cash flow with digital payments frees up assets to invest in inventory to replenish and recover after a busy holiday shopping period. 

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Conclusion

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On cannabis holidays like Green Wednesday, there's a significant opportunity to earn higher revenue. The balancing act for dispensaries is between attracting shoppers looking for holiday discounts and retaining high enough profit margins to call the campaign a success. 
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Cannabis retailers can lean on digital payments to fill the gap in profits over Green Wednesday (and any other day of the year) through improved efficiency, higher revenue, and enhanced cash flow. 

You can add Aeropay digital payments at your dispensary today by scheduling a demo.