Why Monitoring Margins Is the Secret Weapon of Successful Companies

In the cannabis industry, revenue grabs attention — but margins determine survival. With tight competition, fluctuating wholesale prices, and the relentless weight of 280E, dispensaries that don’t actively track and manage margins are often blindsided by shrinking profitability.

Strong margin management is one of the most powerful levers a dispensary has. At P&V Green Advisory, we help operators monitor margins in real time and compare them against industry benchmarks so they can make informed, profitable decisions every day.

Here’s why margins matter more than ever — and how dispensaries can use them as a strategic advantage.

1. Revenue Doesn't Tell You If You're Winning — Margins Do

Two dispensaries can generate the same revenue yet have dramatically different levels of profitability.

Why?

Because margin is influenced by:

• supplier pricing

• inventory mix

• discounting behavior

• shrinkage

• cost of compliance

• operational efficiency

A dispensary with strong margins can reinvest in growth. One with weak margins is just trying to stay alive.

2. Benchmarking Margins Reveals Your Competitive Position

Margins only become meaningful when compared to industry standards. Strong operators know their benchmarks:

Typical adult-use retail margins:

• Flower: 45%–55%

• Vapes: 45%–60%

• Edibles: 50%–65%

• Concentrates: 35%–50%

• Accessories: 60%–75%

If you’re below benchmarks, you’re either:

• paying too much,

• discounting too aggressively,

• or losing to inefficiency or shrinkage.

Tracking margins by category — and against statewide averages — gives immediate insight into where improvement is needed.

3. Margin Monitoring Prevents Cash Flow Surprises

Sudden cash shortages often trace back to margin erosion, not lack of sales.

Common culprits:

• improper pricing

• bundling or discount-heavy promotions

• rising COGS that aren’t passed to the customer

• old inventory tying up capital

• poor purchasing discipline

A dispensary that monitors margin trends can adjust pricing, renegotiate supplier terms, or change ordering patterns before a cash crisis happens.

4. Margins Are Directly Linked to 280E and Tax Liability

Higher margins help dispensaries absorb the brutal impact of 280E, but they also help you:

• maximize allowable COGS

• reduce effective tax rate

• uncover areas to reallocate costs under 471(c)

• improve after-tax profitability

Many operators don’t realize how much tax they’re overpaying because their margin structure is unclear or misclassified.

Margin clarity = tax clarity.

5. Dashboards Make Margin Management Simple and Actionable

At P&V Green Advisory, we build dashboards that track:

• gross margin by category

• gross margin by SKU

• margin contribution by vendor

• discount impact

• COGS variance

• industry benchmark comparisons

• after-tax margin performance

This turns margin management into a daily strategic tool, not a mystery you look at once a quarter.

Master Your Margins, Master Your Business

Dispensaries that closely track margins outperform those that don’t — every time. Margins are more than accounting metrics; they’re a reflection of strategy, purchasing discipline, pricing power, and operational control.

When margins are monitored and benchmarked regularly, they tell you:

• which products drive profit

• which suppliers deserve priority

• where pricing needs adjustment

• where shrinkage is occurring

• how your operation compares to the competition

Most importantly, margins give dispensary owners the insight needed to make confident, profitable decisions.

At P&V Green Advisory, we help cannabis operators understand, manage, and improve their margins — and ultimately, their bottom line.