Customer acquisition costs are crushing dispensaries.
That’s why the smartest operators are focused on increasing the lifetime value of every customer they already have.
Steve Riparip, CEO of Tact Firm, has helped 50+ dispensaries across the country recover lost revenue and turn first-time shoppers into repeat buyers, adding over $5 million in new revenue for his partners.
I caught up with Steve at Hall of Flowers Ventura 2025 to understand what dispensary retention really means, why most dispensaries still struggle, and how to fix it.
Watch the full interview below:
What is dispensary retention, really?
Retention marketing means many different things to many different people.
But here’s how Steve defines it:
"Retention is simply getting people back in your door that have already been there before. "
The goal then is to increase the lifetime value (LTV) of your existing customer base.
Missed opportunities
Dispensaries consistently have the same two blindspots:
1. First-time customers who don’t return
Most dispensaries lose 45–55% of first-time shoppers. That means nearly half of your new customers disappear after a single purchase.
“If you don’t fix that churn, every dollar spent on acquisition gets less effective over time.”
2. Lapsed customers who haven’t purchased in 60+ days
70–80% of most dispensaries’ customers haven’t shopped in over two months. These are shoppers who know your brand, but aren’t in the habit of returning.
The best dispensary retention systems
Retention is more than email and SMS campaigns. The best systems focus on:
- Smart customer segmentation
- Incentive structures (without margin erosion)
- Data-driven funnels that guide shoppers from first-time to loyal customer
Where to begin
Steve recommends starting out with a retention audit. The goal is to find your fastest, most cost-effective opportunities to increase repeat visits.
Pay close attention to two key segments:
👤 First-time churn
These are customers who bought once and vanished.
Steve’s team calls this the “first-time churn rate,” and it’s often around 50%.
⏳ Lapsed customers
These are people who haven’t shopped in 60+ days, often due to lack of habit, follow-up, or opt-in to a communication program.
Both groups represent low-hanging fruit, but only if you’ve collected the right data and contact info.
Retention needs to happen at the register
Better retention starts before customers walk out the door. One of the most effective and overlooked strategies is training budtenders to initiate meaningful conversations about your loyalty program.
A simple question like, “Are you part of our loyalty program?” opens the door. If the answer is yes, budtenders can confirm enrollment, apply points in the POS system, and reinforce the value of staying engaged. If the answer is no, it becomes an opportunity to explain the benefits—how the program works, what rewards are available, and how it helps them save on future visits.
This conversation should also include capturing SMS and email consent.
“Most stores only collect contact info from 5–10% of first-time customers.”
Without an email or phone number, you can’t follow up, and most first-timers never return on their own.
Budtenders should be trained to explain how signing up for messages ensures they never miss a reward, exclusive offer, or personalized deal. When customers understand the value they’re leaving on the table, they’re far more likely to opt in, stay connected, and come back.
Read next
How to Develop Budtender Skills with Dispensary Sales Frameworks
The best dispensaries are capturing 40%+ opt-in rates by offering the right incentives.
Example:
“Join our loyalty program today and get 500 bonus points.”
Why this works:
- Points feel more valuable than discounts
- Can only be redeemed at your store
- Incentivizes a second visit by design
A common mistake
In 2025, many cannabis retailers still look at average order value (AOV) to determine customer quality.
Steve commonly sees the shortcomings of this approach:
“Averages are imaginary numbers. One customer might spend $20 one time and $100 the next. That doesn’t mean their average spend is meaningful.”
Instead, segment customers by visit count and look at real purchase behavior, and how profitable each customer is over time.
Then use this data to re-engage your best customers with targeted incentives that drive them back in-store.
Successful loyalty programs
Events like 4/20 are a huge opportunity for dispensaries to acquire, and retain new high value customers.
But the key is to use events like 4/20 as an opportunity to build your loyalty program, not just a sales event to drive low margin revenue.
“Instead of just giving away discounts, tie those promotions to opt-ins. Use 4/20 and events to build your list.”
Example:
Keep your standard 30% off promo. But add: “Join our loyalty program today and get 500 bonus points.”
This simple tweak can turn thousands of one-time buyers into long-term customers.
Key takeaways
- Retention starts at the register, so improve contact capture rate ASAP
- First-time churn and lapsed buyers are your biggest missed opportunities
- AOV is misleading, so track visit count and real behavior instead
- Email is a tool, not the strategy, so build a full retention system
- Use promotions to grow your list, not just spike sales
- Loyalty programs work best when tied to data, timing, and the right incentives
Want to improve your dispensary’s retention?
Follow Steve on LinkedIn for daily breakdowns and examples, or visit Tact Firm if you want help implementing your own retention engine.
If you’re ready to power your retention strategy with better tech, Flowhub can help. Request a demo today!
