The cannabis industry is growing exponentially, with its global market value expected to hit the $47 billion mark by 2025. It has become the world’s most commonly cultivated and used drug following its legalization in many countries. Thus, thanks to the decrease in stigmas surrounding it, new consumers are trying out the drug each year. And as a result, many cannabis businesses are popping up to meet the high consumer demand.
For the daily operations of your weed dispensary, do you have the right tools in place? One of the crucial tools you’ll need is dispensary management software. This is a dedicated point-of-sale (POS) system. It is uniquely designed to fulfil the special needs of the retail marijuana industry.
Essentially, the primary demands of a marijuana dispensary vary from those of a conventional retail store. For example, compliance with industry standards and policies is a major pain point in any marijuana dispensary. As a result, a conventional retail management system may not meet the needs of your dispensary. This is why you should choose a cannabis-integrated POS system, which will turn your weed business into a profitable venture.
So, in what ways does your cannabis business stand to gain from implementing a dispensary management system? Read on to find out.
Regulatory Compliance
The cannabis industry is laden with a host of regulations and tax implications. On top of being a highly regulated industry, those laws and requirements keep changing regularly. Failure to observe these compliance aspects may lead to severe consequences. You may face costly fines, loss of license, and even criminal prosecution.
Most states require cannabis dispensaries to table compliance reports to them regularly. These may include:
- Seed to sale traceability
- Waste disposal protocols
- Testing procedures
- Compliant packaging or labeling
- Transportation protocols
- Product recall capability
- Tax payments
- Purchase limits
Remember that regulatory compliance is obligatory. It’s crucial to adhere to these regulations to avoid crossing swords with auditors, state regulators, and law enforcement. The good news is dispensary management software offers regulatory compliance functionality. Thanks to a centralized database and in-built reporting, you can access real-time data reports necessary for compliance initiatives.
Real-time Inventory Tracking
The success of your cannabis dispensary relies on how efficiently you track your inventory in real time. Cannabis POS software will help you stay updated with your merchandise quantity. This inventory tracking functionality can help you in a few main ways:
Reordering Stock
Let’s assume your OG Kush is selling fast, especially during the holidays. The software will track the sales and automatically notify you of the need to restock more OG Kush owing to the high demand. The report will also provide you with insights into what goods are on demand. In the end, you can make an informed decision on when to reorder to keep high-demand merchandise in stock.
Report Lost/Stolen Products
Dispensary operators must report any lost or stolen weed products. This is part of the state regulations governing cannabis dispensaries. This aims to stop weed from being unlawfully channeled to the black market or ending up in the hands of minors. So, how can dispensaries figure out where precisely a loss happened?
The solution is in the installation of a dedicated POS system. The software is customized to track merchandise once you receive it from the distributor. This feature allows you to pinpoint where the drop-off took place. It comes in handy when filling out comprehensive reports on lost products. In some states, a product loss of above three percent may flag your cannabis dispensary for a regulatory audit.
Integrate Physical and Digital Inventory
Imagine a scenario where a walk-in customer orders the last tincture bottle in stock. Immediately, an online customer buys the very same tincture before you have the time to pull it off the website. Dispensary management software can synchronize both physical and digital inventories. Thus, when a customer places an in-person order, the goods are automatically pulled off the online storefront.
Data Analytics
Today, marijuana storefronts are a source of major data. You can tap into this data by setting up dispensary management software. The generated data can help you remove the guesswork and make decisions based on tangible evidence. Some of the most important applications of data analytics include:
Dispensary Staffing
Some days are busier than others in cannabis dispensaries. Customer traffic data from the POS system can be used to anticipate which days will be busier. Therefore, retail owners can know the number of employees needed to cater to incoming orders efficiently. The business owner can also position budtenders where they are required the most.
Crafting a Great Customer Experience
Cannabis dispensaries usually get more customer traffic on weekends and holidays. You can use this important insight to create promotions on items like edibles, bongs, or bowls. Choose a weekday, say Thursday, for such promotions so that you can spread out the traffic during the week.
Also, you can profile your customers based on their gender, age, and purchasing power. This allows you to offer a more tailored experience to each customer demographic.
Empower your employees with immediate insights generated from customer data. When budtenders have access to data on past customer purchases, they can advise their future purchases accordingly. This could even lead to long-term connections with customers.
Improve Budtender Performance
Budtenders play a vital role in a cannabis retail dispensary. They enlighten the customers on different weed strains. They also guide weed consumers to well-suited products based on their individual needs. Most importantly, they turn prospective customers into loyal ones. You need to challenge your budtenders to up their game to make your marijuana retail store as productive as possible.
Based on the data generated by your dispensary POS system, you can track the performance of your dispensary staff members. Here are the six key performance indicators for monitoring budtenders:
- Dollar amount sold per unit
- Percentage margin
- Sales volume
- Units per transaction
- Average transaction value
- Percentage of transactions with discounts
Share the data insights from your POS system with your employees. Sales teams improve when they know what metrics are being monitored. Ideally, you want to spur healthy competition among your sales team. So, consider celebrating top-performing budtenders by making them teachers and guides. This will spur them to train other staff members on best practices. Equally, underperformers will be motivated to work hard to see their names mentioned in a positive light.
And how do you help the underperforming staff? Use the data insights to perform targeted skills training and develop training initiatives to address what you wish to improve.
Customer Loyalty Program
Weed businesses can grapple with customer engagement difficulties. The reasons are varied and centre on long-established stigmas against cannabis. Customer loyalty programs can come in handy when addressing such challenges. A dispensary management system helps you automate discount offers and track your existing customers.
Your cannabis point-of-sale system can generate data on what products your customers love. You can use this data to create a good loyalty program to attract existing customers to shop more. Also, look for POS software with practical digital marketing tools, like SMS notifications and email marketing. This enables you to notify your customers of any limited offers or sales.
Types of Loyalty Programs
- Visit-based: Customers are rewarded depending on the number of times they visit your retail or online dispensary. Every visit, the customer can earn several points or dollars.
- Spending-based: Customers are rewarded based on the amount they spend per visit. The higher their spending, the more they accumulate redeemable points for product rewards.
- Social media rewards: Customers to earn redeemable points for posting photos and videos about your cannabis products on social media.
- Referrals: New customers can enjoy exclusive discounts. Also, those who refer new customers can get free products.
An effective loyalty program is relevant and can always be adjusted if need be. Regardless of your choice of a loyalty program, your dispensary can benefit in the following ways:
- Customer loyalty: Just like other business sectors, cannabis dispensaries cherish loyal customers. Because it’s challenging to convert new customers, it makes sense to retain the present ones. Customer loyalty programs aim to reward and captivate existing clients. This attracts repeat customers who continue to visit your dispensary again and again.
- New leads: You want to retain existing customers and attract new clients as well. A good deal will undoubtedly bring new customers to your dispensary. After making their initial purchase, you can use their contact information to send them regular updates on new deals and offers.
- Study customer data: The customer loyalty program is a chance to gather customer data. For example, which weed strain is popular with them? From the data insights, you can decide which items to stock and market.
- More customer spending: You can expect customers to spend more when they visit your dispensary. This is because they want to earn discounts and incentives.
Multi-location Support
You’re probably looking to own and operate cannabis dispensaries in different locations. If that’s the case, you need a reliable system that allows you to manage all the respective dispensaries from one centralized device—a solution to streamline all operations. The answer is a cannabis point-of-sale system. With it, you can manage employees, add inventory, and track operational costs for several locations.
As the cannabis industry grows and competition intensifies, dispensaries need to find alternative ways to target a wider audience. That’s why profitable dispensaries sell through various channels. For example, mobile shops and online stores. As such, operators can market to more potential clients and deliver a unique customer experience. This can only be made possible by using a robust cannabis POS system.
How to Choose a Cannabis Dispensary POS System
Now that you know how dispensary management software can help your cannabis business, the big question is, how do you choose the right one? Remember, POS systems differ and can perform varied functionalities.
Here are a few key aspects to consider when searching for the most suitable dispensary POS system:
Product Design and User Experience
The cannabis industry requires a dedicated software system, not a generic POS system. You need a system to handle your inventory tracking and management. Only a dispensary POS system is designed to deal with the unique challenges faced by cannabis businesses. Also, an intuitive and user-friendly system enhances the productivity of your budtenders, giving them quick access to product information and customer data.
Compliance
The weed industry is overly regulated. Dispensaries must comply with the stringent policy regulations enacted in the different states within which they operate. A convenient marijuana POS system allows dispensary operators to stay aboveboard. Many states require dispensaries to track inventory and sales regularly. So, opt for a POS system that automatically relays real-time compliance reports to the tracking system. By doing so, your business can stay compliant and avoid hefty fines or loss of license.
Inventory Management and Reporting Capabilities
You need to track your inventory to avoid understocking or overstocking. Choose dispensary management software that provides inventory valuation. You can accurately predict the strains, variety, and quantity of items you need to stock up based on your generated sales data. Regulations in the cannabis circles demand that you have the proper documentation from seed to sale. The right POS system provides effective reporting capabilities for your compliance audits.
Hardware and Software Synchronization
Your point-of-sale software should seamlessly sync with all the physical hardware in use in different areas of your dispensary. This will guarantee the efficiency of operations. These can include your HR, accounting, staffing, and security solutions.
The Bottom Line
The cannabis industry is fast-paced and highly profitable, especially with more places legalizing it. So, opening a cannabis dispensary is a viable business decision. Your business can benefit from the automation provided by a cannabis POS system.
Running a successful cannabis dispensary means streamlining typical business operations. These include accounting, tax payments, inventory tracking, and compliance audits. A centralized POS system allows you to leverage a wide selection of tools and data insights. In the end, you can run your dispensary successfully, thanks to well-informed decision-making.
