Setting up a legal marijuana retail business depends on state marijuana laws, license restrictions, special taxes, and much more. There are also dispensaries that sell cannabis for medicinal use and for recreational use. Is your dispensary where someone can pick up a prescription? Or does it target the casual customer who may stop in akin to visiting a liquor store? Either way, your business will need a safe and reliable dispensary POS to track your daily sales and keep customer information on file to stay compliant.
Dispensary POS systems are a point-of-sale software solution developed with cannabis dispensaries and marijuana outlets in mind. The solution puts an industry-specific focus on your traditional retail management needs to ensure full cannabis retail compliance. This includes age verification, purchase limits, and hours of operation compliance. Dispensary POS systems will also create needed reports to send to state officials as well as help you analyze business performance and help you increase your bottom line.
In light of the quick growth of cannabis retail businesses across the US, software vendors have been tweaking their solutions to ensure your solution helps you stay in line with the marijuana laws in your state.
Features of Dispensary POS Systems
Point of Sale (POS)
Supports payment collection, receipting, and back-office accounting processes. Integrates with scales to weigh product at checkout. Print labels and receipts. Scan barcodes on products. Apply discounts based on sales or loyalty rewards.
Track vendors and monitor wholesale ordering. Allow detailed statistics to find out your most efficient reorder process. Track customer purchase history and traffic patterns to determine future demand. Receive alerts when stock levels are running low to ensure efficient purchase times.
Store patient prescription information. Keep an open line of communication with local area doctors to confirm medical files. Keep track of customer purchase histories. Provide loyalties and discounts to frequent shoppers. Ensure customers are not exceeding any limits established by the state or their doctor.
Keep close records of your business operations to stay compliant with your state’s unique requirements surrounding the sale of cannabis. Make smarter decisions by managing income and expenses and learn where your business is succeeding and where your business can improve.
Benefits of Dispensary POS Systems
Industry-specific use. There are hundreds, if not thousands of retail stores all selling a variety of goods. While some industries may have their own version of POS solutions, a majority of POS options may simply be advertised as “retail POS” and provide more of an industry-neutral or generic way at running a retail business (track daily sales, monitor inventory, improve purchasing, etc.) However, these solutions will require a heavy amount of configuration and training to provide the features you need to run a successful marijuana dispensary
Keep track of state compliance. Many dispensary POS software solutions will have built-in compliance. It will help you submit information to any state reporting systems and help you submit the necessary information. Some states may require you to submit reports as frequently as daily. Failure to stay compliant can result in a loss of your license.
Improved inventory management leading to better profit margins. When products such as THC-infused foods and CBD oil are flying off the shelves, it can be hard to ensure you have enough product in stock to meet demand. Improved inventory management can alert you when certain products are being sold at a faster pace than expected, so you can place purchase orders for more and ensure you can’t meet your customer’s demands.
What Does Your Business Need?
Small businesses or start-ups: Dispensaries that are a small operation or perhaps just starting up will want their top priority to be staying compliant. Losing your license or perhaps facing fines during the critical first few months/years of being in business will be a quick way to lose any traction you’ve gained as a company.
Having a true dispensary POS solution (and not a generic retail POS system) will be the best way to ensure all your boxes are checked. If you are not able to find a dispensary POS software that fits within your budget, many software vendors may specialize in implementing their “generic” software into dispensaries via various add-ons, customization, or personalized consulting.
Well-established cannabis retail stores looking for additional features: Stores that have been in operation a while and have steady sales will want to ensure they have a better grasp on their inventory. Advanced dispensary POS systems will let you track your inventory in real-time. This means as you ring up items for a customer, your inventory levels are being decreased, and you’ll receive notifications of the best time to reorder goods based on the expected wait to receive more.
More advanced dispensary POS solutions will also offer features to help your business gain favor with its customers, such as loyalty programs, marketing features (sending automated emails to customers to check in), and e-commerce integration.
Medical dispensaries: This type of dispensary can only sell the clients with a proper prescription. Because of this, they’ll need to ensure they have the proper functionality to store patient information in their dispensary POS system. The business can ensure that their prescription is legitimate by checking with doctor’s offices, monitoring expiration dates, and ensuring that the customer is receiving the correct amount of product.
As medical marijuana is available in more states than recreational, most dispensary POS systems were originally developed with a medical dispensary in mind and has since adapted to include recreational facilities.
Pain Points of Dispensary POS Systems
Staying Compliant. Businesses that do not report the necessary details of their operation to the state face costly fines and store closures. Each local government that has legalized cannabis has its own unique requirements. Because of this, it may be hard to fine tune a non-specific POS to your local jurisdiction. These reports include on-demand sales reports and accurate inventory management. When pieces of inventory go missing due to human error, lack of quality assurance, poor packaging, or employee theft, you may face fines and even closures.
Difficulty finding reliable business partners. Outside of vendors, wholesalers, manufacturers, and the customer, a dispensary is like any other business that will need the use of outside assistance from accountants, lawyers, or technology providers. Any of these professionals will help your business stay on the right side of the law; the difficulty may be finding a technology partner that is well versed in the compliance issues your business face.
What is ok to sell and what is not? The 2018 Farm Bill seemed to pave the way for hemp-derived CBD products, but some local jurisdictions are being picky about what retailers can and can’t sell. In February 2019, New York City’s Department of Health implemented a ban on CBD as a food additive. While the sale of oil and vape cartridges are still fine, restaurants in NYC are no longer permitted to add anything to food or drink that is not approved safe. As it stands, CBD has not been deemed as a safe food additive in NYC. This means bakeries or coffee shops that added CBD to existing products may face a loss of business or have to make some serious revamp to their menus.
Dispensary POS System Trends
The rise of branded products. In 2014, marijuana flower was 63% of all cannabis sales; most of which was unbranded. As concentrates, edibles, and topicals began to increase in popularity (all under branded names), as of 2018 flower has dropped to 43% of the market while these branded products have increased dramatically.
Changing the consumer buying experience for the better. Dispensaries are putting a major focus on how consumers want their buying experience to be. Some speculate that the industry will position itself similar to the adult beverage industry with a three-tier system (producers, distributors, and retailers). This means that producers can only sell to wholesale distributors who then sell to retailers who finally sell to the customers.
The belief is that the more this process becomes normalized into a typical retail scenario (similar to purchasing alcohol), the easier it will be to get rid of the stigma of buying cannabis.
Worldwide consumer spending on legal cannabis is expected to jump 40%. Worldwide, legal cannabis sales is an $18.1 billion industry, with $14.4 billion coming from the US.