Exploring Inventory Struggles at Cannabis Dispensaries

If you’ve ever gone to a dispensary only to find that they’re out of your favorite strain or the one edible that helps your back pain without putting you to sleep, no one would blame you for being a little frustrated. After all, it’s a cannabis dispensary. They literally have one job to do: sell weed and weed products. Pot has been legal for years now, how hard can it be to keep enough products on your shelves?

While your first instinct may be to take that frustration out on your friendly neighborhood budtender or on their manager, just take a deep breath and try to see it from their side. Budtenders and their managers also understand that they should always have enough product on hand. It’s literally their one job to do and they want to do it well. Also, you may not be the first frustrated customer they’ve dealt with today.

The employees themselves may be unsure of the hard counts, which can cause real headaches for the dispensary. “Why is this?” you may be asking. “Why can’t the dispensary maintain accurate counts of their products?” The answer is that there may be several reasons for this, ranging from simple employee error to how cannabis is tracked by the state.

Since it always pays to be an informed cannabis consumer, and since it may take the heat off your noble budtender simply trying to do their job, let’s delve into the many reasons your dispensary might be short on your favorite product.

The first reason could be budget. Because the cannabis industry is still so relatively new, nearly all shops are owned privately instead of by a larger corporation. While small business ownership is great for a number of reasons, it does mean that there isn’t anywhere else to pull money from. If a shop is just starting out, or has hit a momentary rough patch due to the many issues that can crop up for a small business, they may be short on cash and have had to limit their order from producers.

There are many factors behind inventory discrepancies at dispensaries.

The second reason could be the challenges of syncing up the state’s cannabis tracking software with the shop’s point of sale (POS) system. For this example we’ll use METRC in Colorado. Each dispensary uses one of many POS systems that all sync up with METRC. However, sometimes the count will be off, either because a shipment was fulfilled wrong, an employee scanned it wrong, or whatever other reason. This can throw the count off in the computer system, which means managers then have to go to the back of their point of sale system and make adjustments, which throws off things tracked in METRC. 

Finally, due to the strict control of cannabis by state government’s marijuana enforcement boards, dispensary owners and managers are forced to be over-cautious when placing orders and usually favor smaller orders over larger ones. To understand why, let’s use a thought experiment.

This example is intended to help you understand the parallels of inventory struggles between “regular” industries and the cannabis industry. Additionally, we’ll show how the strict regulations of the cannabis industry make it even more challenging for dispensaries.

Imagine if you run a convenience store and you decide to order twenty five cases of the very popular (and made up for this example) energy drink “Dragon Lightning.” The delivery driver drops off the order at your store. You glance over the stacked cases on the dolly without doing a full count since it’s been one sale after another today, you’ve worked through your lunch break, and there’s already another customer at the counter waiting to buy your last can of Dragon Lightning. You sign off on the order, wheel it into the refrigeration room, and deal with the customer. Your employee stocks the Dragon Lightning into your cooler and you’re back in business. A month later you’re out of Dragon Lightning again. Even Dragon Lightning’s least popular flavor “Black Licorice and Apricot Apocalypse” is gone from your coolers. Something’s not right about that, so you check your sales against your inventory.

You’re missing at least a case of Dragon Lightning. Maybe the distributor miscounted the order before they delivered it to you. Maybe one of the cases fell off somewhere en route. Maybe someone lifted a case before it got to you. You didn’t have time to check that day so you really can’t be sure and there’s no point in calling the distributor. Maybe your employee entered the count wrong. You just hired someone new and they could have put in the wrong code while selling a can of Dragon Lightning’s Orange Grape Ballistic Missile.

Whatever the reason, that case of Dragon Lightning is gone. It happens in retail all the time and it’s no big deal. You’re out some money, corporate may have some questions, but overall you’ll just mark it down as “wasted/missing” and be more careful next time.

In the highly regulated cannabis industry, you would have a lot more to answer for if any of your product went unaccounted for. If that missing case of Dragon Lightning were instead a case of gummies or a couple dozen grams of flower, you could face fines, your business could be shuttered, or you could lose your license to operate. Thus, dispensary owners can be much more cautious about ordering too much product.

Missing cannabis products can result in big issues for dispensaries.

As mentioned before, cannabis and products are tracked meticulously from seed to sale. Even with this, mistakes do happen. Some product may get scanned wrong by a new employee or there could have been a mix-up with the delivery. If the orders are small, it’s not a huge deal. One tube of chocolate chip cookies or a couple grams of product can be adjusted in whatever cannabis tracking software the state government is using. This sort of thing happens all the time.

However, if the same thing happens with a large quantity of product, things can get real dicey for the dispensary real fast. A large amount of missing live resin or 100 grams of missing weed, even if something innocent happened, gets flagged in the system and can trigger an investigation. This means that whatever the state’s marijuana enforcement division can come down to the dispensary and start making demands. They can audit the dispensary’s transactions, gather the budtenders for individual interviews, demand access to the security camera footage, and much more. They can also temporarily close down the shop while they do the investigation, impose fines, or remove the dispensary’s business license altogether.

With consequences like these for basic errors that happen regularly in every retail-based business, dispensaries are wary about dealing with larger amounts of product. All this is to say, they would rather risk running out of product and dealing with a couple of angry customers than order a larger amount and risk losing their license.

So, the next time you visit a dispensary that’s out of your favorite product, just relax. If it happens all the time, maybe find a new dispensary. If it’s only once in a while, just know that the manager and the employees are working their hardest to keep your favorite products on the shelves as well as keeping their small business open.