Cannabis is a real player in the retail industry and, just like any other business, keeping accurate inventory records is a key component for success. The cannabis industry differs from some facets of the retail industry in its emphasis on complying with state regulations; it’s crucial to record accurate inventory to ensure you’re compliant with state guidelines.
Cannabis inventory management not only ensures your business is complying with regulations, it also directly increases your profitability. By maintaining accurate and updated inventory records in a system that allows you direct access to your numbers, you’ll always have a firm grasp on the state of your business. This makes it easy to order products accurately and create a plan of action to increase sales.
Even with a strong cannabis dispensary business plan, you may still falter if you don’t put your inventory management, record-keeping, and coordination in the front of your mind. There are several simple mistakes that business owners could make that might threaten their ability to comply with regulations or make a profit from their operations. Reviewing these potential mistakes, and how to avoid them, will help ensure you maintain compliance while growing a successful business.
Abstaining From Cannabis-Specific Business Software
Cannabis business owners may be tempted to rely on Excel spreadsheets or a generic inventory management system to stay organized. However, cannabis inventory is unique since it must comply with state regulations. Many inventory management systems on the market don’t provide the specific numbers and information needed to ensure you’re remaining compliant.
Generic inventory software or even manual inventory management can be time-consuming and labor-intensive. If you manage your inventory manually, there’s room for human error, which may not only affect your profitability, but may also unknowingly affect your compliance with industry regulations. Using generic inventory software leaves out the industry-specific numbers you may need to keep your business running smoothly and to comply with industry guidelines as well. It is essential to integrate your business records with METRC software for “seed to sale” records and proof of compliance.
METRC-integrated inventory software allows you access to your plant and retail inventory at any given time. With integration into your point-of-sale (POS) system, cannabis-specific inventory management software allows you to take a step back and simply manage your numbers instead of calculating each one manually. These accurate numbers are crucial because they allow you to prove you’re complying with regulations if you’re ever questioned.
Neglecting Inventory Spaces
Your inventory numbers don’t mean anything if your warehouse or storage space isn’t organized. Overstocking shelves with products that aren’t moving fast enough or leaving your warehouse cluttered so your staff can’t locate products when they need them is a mistake that could deplete profitability.
Getting your inventory space organized and analyzing your product numbers until you have them down to a science is the best way to ensure your business continues to thrive. If you manually count your goods or products irregularly, you’re leaving yourself vulnerable to error.
A fully integrated cannabis inventory and distribution compliance system can help you know what’s in your warehouse at all times so you don’t overstock with products you simply don’t need. With a trustworthy inventory management system in place, you won’t need to worry about an audit since you’ll have accurate, real-time data about what’s in your warehouse or stockroom.
Between ordering products, complying with industry regulations, and serving customers, you’ll likely find yourself busy. No matter how occupied you are, counting your inventory regularly is a crucial part of ensuring your business runs smoothly and continues to be successful. Even with the best inventory management software, it’s still important to regularly count your inventory.
The cannabis industry can be high-risk for theft, so it’s important to have a handle on your current inventory numbers. Don’t wait to implement this practice when you notice a problem or shortage. Be sure you have a regular inventory counting strategy in place for yourself and your staff.
Develop a specific routine for counting inventory that you implement daily, monthly, and yearly. By staying consistent with your audits, you can quickly identify potential problems, ensure you’re complying with guidelines, and have a better idea of how products are moving.
Using the Wrong Management Method
One of the most important compliance regulations you must adhere to is ensuring you don’t sell expired products. If you’re implementing the wrong management method, it’s easy to let these expired or stale products slip by, which can threaten the livelihood and reputation of your business.
Implementing the first-in-first-out (FIFO) inventory costing method keeps your products organized by expiration date. The products you’ve had the longest are at the front of the shelves, first in line to be sold. This helps reduce product waste and makes it easier to track your assets.
This is also a crucial step in being able to guarantee your product is high-quality and complies with state guidelines. By maintaining control over management methods, you can help keep your costs down and ensure the product that represents your brand satisfies customers.
The Hemp Business Journal predicts that the CBD industry will grow to $2.1 billion in consumer sales in 2020. As a cannabis industry professional, it’s crucial to be prepared for this uptick in growth with adequate product numbers while maintaining compliance. Identifying peak times that are conducive to a spike in cannabis sales and ensuring you have the proper inventory is important for your business’s success.
Sales and inventory reports you can pull instantly from your inventory management system are helpful tools when you’re trying to learn more about customer patterns. With an industry-specific system in place, you can pull numbers, predict your sales, and order your products accordingly. This can help reduce product waste while ensuring you can accommodate your customers with the products they want.
Navigating the cannabis industry to ensure you’re complying with state regulations can be tricky. With a cannabis-specific inventory management system in place, you can prove you’re adhering to these guidelines with accurate numbers and real-time data. Sales and inventory reports also make it easier for you to manage your stock and provide high-quality products to customers, growing your business and solidifying your reputation as a respectable company in the industry.