The old joke goes that no economist ever goes broke by predicting a recession. When they’re right, they look smart. When they’re wrong, nobody cares. The much-promised recessions of ’23 and ’24 didn’t happen, but nobody lost a job over it.
But just like rainmakers and doomsday prophets, professional economic forecasters move the goalposts when their claims don’t materialize. They know that, eventually, they’ll be right.
Despite claims that “vice products” are recession-proof, there are real consequences for smoke shop owners who make bad predictions. And while American consumers may reach for the bowl more often during market downturns, the industry has more to fear than macroeconomic conditions.
Smoke shops grapple with product bans, police clampdowns, legislative changes, and complications from the rise of legal dispensaries. And while you might not always accurately decipher the writing on the wall, you can take steps to lessen the impact of the unknown.
Start a Diversity Initiative
Diversifying your store’s offerings is a time-tested way to hedge against a recession and product bans. American consumers want choices, especially in a market as reactionary and innovative as smoke shops.
Some of the most popular products—kratom, Delta 8, shroom gummies—balance their legal status on a razor’s edge. Cities, counties, states, and the feds can decide at any point to eighty-six your wares without giving a rat’s ass about your bottom line. No matter what you’re selling, have a second option for customers who want to try out a product that just got axed.
Insulating your shop against a recession also means stocking goods beyond the standard glass, papers, and incense. Real diversity means stretching the definition of what a smoke shop can be.
The usual distributors can help you start, with many offering safe but interesting items like exotic snacks, candles, and cannabis-adjacent tchotchkes. But taking things further can enhance both your business and your vibe.
Consider the customers you already serve. If you’re in a college town, music posters, funky clothing, and gag gifts can add a potent new revenue stream to your bottom line.
If you’re in the suburbs, consider marking off part of your store for adult novelties. It can feel odd at first, but there are many people who want to spice up the bedroom but won’t step foot in a seedy adult store. Keep it light and judgment-free.
Some shops find a niche in the quasi-spiritual, stocking everything from tarot decks and astrology guides to healing crystals and Reiki manuals.
Or try using the convenience store trick of stocking impulse items next to the register. The usual stuff works: candy bars, soda, caffeine supplements, breath mints, gum.
Take a Cue from the Mob
That’s a nice store you got there. Be a shame if something happened to it. If you want real protection, you’ve got to pay… your customers. Loyalty programs work. You’re already competing against a small army of other shops in your zip code, so give your regulars a reason not to shop around.
There are models galore. Punch cards. A five percent discount on the store’s slowest day. The mafia that is Amazon perfected this idea. The company realized customers would buy more products if it meant avoiding shipping fees.
It can work the same in your store. Offering a discount on all purchases over a certain threshold can nudge customers to make that extra purchase they already want. The human mind is amazing at justifying this kind of spending.
Besides, everyone likes a freebie now and then. There’s nothing like getting rewarded for something you do anyway. Customers who feel a relief in their wallet don’t forget it easily.
Capitalize on the Trends
Cannabis legalization is changing the business. Some smoke shops are partnering with dispensaries; others are using the increased interest to their advantage.
Thanks to regulations, the dispensary experience isn’t great. There are bars on the windows, you can’t touch the products, and they scan your license like you’re some sort of felon. In many places, the wait is atrocious.
Smoke shops don’t suffer from those problems. That’s why you can win on customer service. Even if you can’t sell the hard stuff, you can deal in everything else. If dispensaries are the doctor, you’re the pharmacist. You’ve got the over-the-counter options—and the time to get personal.
Shop owners have found success by offering help on the edges of the space. A few offer hydroponic growing kits and materials to help first-time growers get their first buds. Others traffic in social activities—board games to play under the influence, 420 party supplies, recipe books, and weird and wonderful curiosities.
Still, others find ingenious ways to offer a value-added bonus to legalized weed, like themed arts-and-crafts kits and self-care items like bath bombs, mood lighting smart light bulbs, and personal massagers. At least one stocks special teas (the owner brews a pot and offers free samples on cold, busy days).
A few stores carve out a niche among people who take the natural experience of cannabis to heart. There’s a whole lifestyle that goes along with this kind of outlook. It includes dietary supplements like probiotics, non-magic mushroom supplements, organic powders, and lotions—all organic, all natural, and all very complementary to a certain kind of cannabis culture.
No matter what the professionals say, rough times will happen. Even though you probably can’t prevent losing a bit of business to market trends, you don’t have to lose your footing when the economy stumbles.
