There’s a version of this article that starts with something like, “Regulations are changing, and shop owners need to stay informed.’’
However, every business owner already knows that. You knew it before the ink dried on last year’s rules, and you’ll know it again the next time a city council or a state legislature makes a ruling that causes chaos for your product mix.
So let’s instead spend this time asking ourselves, how do you build a business that can survive a landscape in a constant state of flux?
The Only Constant Is Change
First things first, they say the only constant is change, or regulatory rewrites, in this case. Every category in retail, and most particularly smoke shop retail, from vapes and nicotine to hemp-derived cannabinoids, has spent the last several years being contorted into different shapes.
We have seen new age-verification standards, local retail moratoriums, and flavor restrictions. And now, there is the fast-approaching November deadline that sets a Total THC standard. The majority are checking their shelves and their supplier contracts with dread.
While regulatory risk has always been a part of society, the recent pace is only equivalent to the flash; it burns up your capacity to keep up, really fast.
Products used to have years to mature before regulators caught up; that is no longer the case. History shows tobacco control policy tends to lag behind the industry, which means new products can be sold for years before rules catch up to them, but then, when the rules start to be established, they land fast. We seem to be in a landing season.
Don’t Build Your Business Around One Category
It is a smart strategy to ensure that no single regulation could take your whole business down with it.
Researchers surveying shop owners and managers across several U.S. cities found that when the industry got hit with tightening e-cigarette rules, nearly three-quarters of them had already added CBD products to their shelves. A majority said those products would keep growing as a share of their business.
As businesses wait for the looming ban and you face the restocking conundrum, ask yourself: if your best-selling category disappeared tomorrow, would your shop survive the quarter?
If the answer makes you wince, it’s time to diversify. Luckily, there are so many new categories to add to your shelves. Wellness and functional products, glass and accessories, apparel, storage and cleaning lines, and novelty and gifting are all safe bets.
Make Compliance and Customer Experience One and The Same
When you say the word compliance, most of us think of paperwork behind the register. We see licenses, age-verification logs, and supplier documentation.
Customers never see any of that. What they see is how your staff answers their questions. They look at how you organize your displays and whether the person ringing them up actually checks ID.
When local enforcement is strict, including heavy fines and impromptu inspections, shop staff tend to take the day-to-day rules seriously. However, as the owner, you should enforce this with or without law enforcement.
A shop that runs a tight ship with clean records, confident staff, and ID checks reads as trustworthy, and trust is a currency in this industry.
Training, Training and Some More Training
We should make this an anthem. Quarterly staff meetings can’t keep pace with the current regulatory environment.
In fact, roughly 40% of the owners and managers don’t know, or got wrong, whether state and local age-verification and flavor rules were even in effect before federal versions came into effect.
It is often more efficient to have frequent training, for example, five minutes at the start of a shift. It should be simple and easy to keep consistent. Use the time to discuss what has changed during the week, product information, and how to sell, and any questions staff received and were not sure how to answer.
This turns compliance into muscle memory instead of a binder nobody opens until an inspector asks for it.
Push Compliance Upstream, to Your Suppliers
The products causing the most regulatory headaches right now have unclear documentation, murky lab testing, and mislabelling. It is important to have a conversation with suppliers and ensure you cover any possible vulnerabilities.
A supplier who can’t produce a current lab report or a straight answer about ingredients is actively transferring their risk onto your shelf.
Make Compliance a Habit
Set aside one hour a month to walk the inventory, check that supplier documentation is current, and confirm your labels, your website, and your point-of-sale system all say the same thing about what you’re selling and to whom. This hour will save you time and money when the inspector finally comes through your doors.
In addition, intentionally build a shop that can pivot in weeks. Rather than filling your shelves with one product line, start with smaller orders and see what your customers actually want.
Keep your store layout flexible so you can adapt quickly as trends and regulations change, and build relationships with multiple suppliers, so you’re not left scrambling if one product line disappears.
Lastly, keep a little cash in reserve. You never know when you’ll need to refresh your inventory on short notice.
