Inventory management is an important part of compliance
Inventory management is an important part of compliance with legal cannabis, and most states have an established system like BioTrack, or Merc through which they can fulfill their seed-to-sale traceability requirements.
For the legal cannabis industry, retailers can’t be caught with a discrepancy in their inventory as it pertains to their records or their agreements with their suppliers, and must effectively account for every single gram of cannabis that is brought under their brand. At the same time, inventory management means being aware of your demand so that you can sufficiently supply your customers, and not be caught without product in times your customers demand it most. It also protects retailers from unnecessary losses when overstocking.
Here are a few ways that cannabis retail stores can minimize their risk of inventory problems:
Use Your Intel Properly
POS Systems as well as Enterprise Resource Planning and Data Analytics tools have come out in support of the cannabis industry and are tackling some of the most specific inventory management needs of cannabis retailers.
For instance, platforms like Headset and Baker allow dispensaries to see times of the day, week, month and year that demand particular higher inventory and alert cannabis retailers to the need to increase stock at high-demand times such as before weekends, or before holidays like 4/20.
Don’t Fall Victim to Lack of Automation
Simply put, if you’re using Excel spreadsheets, or manual counts where you’re writing information down on a scrap piece of paper, human error can run you into the risk of a compliance violation pretty fast.
Even though your state may have a required seed-to-sale traceability software platform, it’s a good idea to safeguard your specific products with a secondary inventory management system that helps you automate your product. Use pre-packaging to help with preciseness when placing your inventory on the shelves.
Train Your Staff on Inventory
Just because there is a high degree of automation available for the compliance requirements necessary for cannabis sales doesn’t mean cannabis employees should get slack on inventory or how to inventory counts properly and precisely.
No computerized system is foolproof, and employees should be trained on “old school” ways to do inventory as well as how to integrate their inventory counts into your chosen inventory management system… and this still doesn’t involve using unreliable tools like scrap paper to take inventory counts.
Make Employee Theft Policy a Priority
Along with safeguarding your cannabis retail by having employees log in to the POS system for authorization for purchases, limiting discounts to friends and family, or ensuring that employees are monitoring each other’s actions and not heavy-handing, enforcing employee theft policy should be a huge priority. The privilege of legal cannabis is showing that it won’t be abused by having unaccounted for cannabis or inventory gone missing. Establish a zero-tolerance policy on employee theft right from the beginning of the employment relationship and stay firm in its enforcement. Engage your employees in the inventory management work so that they know that every single gram is being monitored and traced, and that your POS system and inventory management system won’t let them get away with theft or fraud of any kind.
Don’t Overbuy Products
When people think about inventory management, they often think about running out of a specific product or having their shelves go empty. Inventory management is also about ensuring that you’re not overstocking your shelves, resulting in spoiled or expired product if it’s not purchased by your customers. You may also need to sell off your product at discounted rates that have you at a serious financial loss. Learn about what’s selling and what’s not by again using your intel to see what products are hot, and what are some less popular options going into people’s baskets. Be aware of the expiry date of all your products and make sure you’re stocking your products so you’re not losing the value and shelf date of certain products as time ticks on.
Set Par Levels
Par levels in retail means any amount of a specific product that must be available on hand for a specific period of time. For instance, based on your sales patterns for products you have in store, you should have X amount of X brand vaporizers in your store. When your inventory dips under your par level, you’ll know it’s time to order more. Setting par levels is a basic safeguard to ensure you’ll never be fully sold out of a product and that it will always be available on the shelves.
Keep Inventory Management Top of List
It can’t be fully overstated how important it is to ensure that inventory management practices in your cannabis dispensary are airtight, not only to meet your state compliance requirements, but to build trust within your staff and ensure you’re constantly moving product in a way that never has you at a loss. Be proactive about inventory management through your staff training, POS systems and by employing some of the age-old techniques in retail that have been designed to safeguard your business from empty shelves.