Be Less Risk Averse Before 4/20

The end of March. That time of year when Cannabis sales teams around the country rejoice with excitement while remaining feverishly nervous about extending credit. With 4/20 around the corner, wholesale and consumer demand is about to temporarily sky rocket.

It's a time that many cannabis companies look forward to. 4/20 marks a great opportunity for sales to explode. Dispensary's will often order an oversupply of products, to make sure their shelves do not run dry prior to and during the holiday. When they do this most dispensaries are also looking for those products to be sold to them on credit. Should your cannabis company do it? The answer is yes.

Extending credit in the cannabis industry isn’t a scary thing. As long as your company has solid A/R standards and procedures (credit checks, credit agreements, default clauses, etc) you will have a way to recover your money. Follow those standards and you’re protected.

However, in the weeks leading up to 4/20, demand spikes. Use this situation to your advantage and allow trusted clients (those with a successful business history with your firm) and extend them a higher volume of products than you would normally. During this time, consumer demand spikes and dispensaries significantly increase sales.

Extending them some extra credit, allows you to increase sales while feeling more confident that they will be able to pay you back. After all, it is a holiday celebrated the world over.

The take away from this short blog is that while you should never extend yourself beyond what your firm can do, it is ok to be less risk averse in the next coming weeks.