Business Practices, Performance, and Challenges in the Retail Cannabis Industry

Abstract

Objective: This study examines business practices, performance perceptions, and operational challenges within the U.S. retail cannabis industry, identifying gaps between perceived importance and performance across six core business functions. Method: Drawing on Dynamic Capabilities Theory (DCT), a survey of cannabis industry professionals assessed the perceived importance and performance of key business functions. Paired-sample t-tests identified importance–performance gaps, and correlation analysis evaluated the relationship with the DCT. Results: Significant gaps emerged in five of six operational areas, with advertising, marketing, and promotion showing the largest discrepancy. Financial management was rated the most critical and anxiety-inducing function. Although customer knowledge showed no gaps, results revealed weaknesses in consumer profiling and targeting. Conclusions: Managers should consider strengthening marketing agility, refining consumer profiling, and enhancing financial and strategic planning. Closing the identified gaps and turning them into strengths in core operations can potentially lead to higher-order transformative capabilities, resulting in higher productivity, growth, and profits within a highly regulated environment.