Glossary of Dispensary Terminology

Internal Revenue Code Section 280E states that businesses selling controlled substances (cannabis) cannot deduct any expenses that are incurred in the production, distribution, and sale of those substances. This means that cannabis companies are not able to deduct many of the same expenses that non-cannabis businesses can. One exception to this rule is the ability to deduct Cost of Goods Sold (COGS). Here's a full list of what you can and cannot deduct according to 280E.

Expenses that cannot be deducted include rent, shipping, employee costs, overhead, etc. The implications of 280E are that without typical deductions, it’s more expensive to run a cannabis business than other types of businesses.

The origins of 420 have been traced to a secret code used by friends at San Rafael High School in the early 1970s. They would often meet at 4:20 p.m. to consume cannabis. Since then, it's become a widely used phrase. 420 refers both to that time of day and April 20th. Dispensaries usually reach peak sales on and around the 4/20 holiday when consumers across the country gather to celebrate cannabis.

Similar to 420, 710 references July 10th, a day to celebrate dabbing cannabis concentrates and extracts. When flipped upside down and backward, the numbers “710” spell “oil,” which is a word used to describe concentrates such as hash oil, wax, shatter, etc. Like 4/20, dispensaries often see a spike in concentrate and extract sales on 710, and many offer discounts or special events to celebrate.

Adult-use describes the recreational use of cannabis. This means consumers over a certain age can legally use cannabis. Each legal market has unique rules around adult-use, including the legal age, purchase limits, and dispensary requirements, but all adult-use markets allow the sale of marijuana with a valid ID. The opposite of adult-use is medical, where consumers must have a medical card to acquire cannabis products.

The Alaska Alcohol and Marijuana Control Board is a department within the Alaska Department of Commerce, Community, and Economic Development that is established as a regulatory and quasi-judicial agency for the control of the cultivation, manufacture, and sale of marijuana in the state. For more information, visit the AMCO website.

API stands for application programming interface, which allows technology products and services to communicate with each other through the internet. Simply put, API is the code or back-end commands that let two (or more) programs “talk” to each other. APIs allow developers to enhance functionality and speed up development. In cannabis, APIs are often found in the technology stack.

For example, Flowhub has a robust API network that allows you to integrate other business tools. Our Metrc API allows for seamless reporting and compliance safeguards. Metrc speaks to Flowhub, and Flowhub speaks to Metrc, allowing a two-way share of information. Another example is integrating a loyalty platform, integrating order-ahead, or integrating your debit card scanner with your cannabis POS to reduce human error.

For retail licenses who buy products from a licensed third-party and separate business entity, the cannabis excise tax is paid on what is defined as an “arm’s length transaction”. This means that the retailer pays for the excise tax when purchasing products from a supplier (a.k.a. wholesale purchase). The amount of that tax is included in the sales price for the customer, which includes the markup percentage from the wholesale cost and does not need to be calculated again during the retail sale.

Back of house (BOH) refers to the area in dispensaries that is not seen by customers. It is where inventory is stored, audited, and transferred, and is also primarily where inventory managers will operate. Most markets require a secure room for auditing inventory. BOH often also includes a restroom and/or break room for staff only, offices, secure cash storage, and/or storage for non-cannabis products.

Badder/batter and budder are terms that are used to describe the appearance of cannabis extracts. Batter or badder has the look and feel of frosting and usually has a soft, golden color. Budder's look is similar to actual butter and has a much softer texture.

Beehive delivery is a bulk delivery option where a cannabis retailer follows a designated route to deliver pre-ordered cannabis products to one individual at a time.

A dispensary's beginning inventory is reported to their state track-and-trace system in order to account for all on-hand cannabis products. The beginning inventory will need to be given proper naming conventions, counted, and entered into either a CSV or directly into the tracking system. This process is meant to identify all of a dispensary's inventory within their state's required tracking system, such as Metrc.

BioTrack is a cannabis seed-to-sale traceability platform used by state regulators to ensure that cannabis is tracked and traced throughout its lifecycle.

Brand standards are the rules and guidelines attributed to the look and feel of a cannabis business. They are more than just a logo, but every aspect of the company’s customer-facing communication, whether it’s social media, website, or in-store experience. Brand standards outline how (and where) your logo is used, your primary and extended color palette, company bio, in-store design expectations, and more.

A budtender is a person who sells cannabis products to customers/patients at a dispensary. Budtenders are often the employees who engage dispensary visitors, process transactions, and provide education to customers.

BOPIS is a dispensary workflow that allows customers or patients to browse products online and select which ones they would like to pick up at the physical store. This provides convenience for the shopper as they can pick and choose what they want to buy without walking around a dispensary.

The California Bureau of Cannabis Control is an agency of the state of California tasked with regulating the medical and adult-use of cannabis. For more information, visit the BCC website.

Cannabidiol (CBD) is a naturally occurring compound in the resinous flower of cannabis. It is one of the hundreds of phytocannabinoids found in the plant and has been found to have therapeutic properties. CBD does not have psychoactive effects like THC and is often used for relaxation, as a sleep aid, and for pain relief.

A cannabinoid is a chemical compound found in cannabis (Phytocannabinoids) and also produced within the human body (Endocannabinoids). Phytocannabinoids mimic the effects of endocannabinoids and are associated with the euphoric effects of THC in humans.

Cannabinol (CBN) is among the many minor cannabinoids produced in cannabis. CBN is a non-intoxicating compound that is created when THC ages and therefore, is often found in high quantities in older cannabis. CBN is primarily used as a sleep aid, but it has also been found to have pain and inflammation-reducing qualities.

Cannabis is a plant in the Cannabaceae, or hemp family. Parts of the plant, including dried flowers and leaves, have been used for medicinal and recreational purposes in numerous forms throughout history. The cannabis plant can also be used to make hemp products.

POS software allows dispensaries to streamline, automate, and safe-guard the checkout process. Good dispensary point-of-sale systems integrate with your inventory, your state seed-to-sale tracking system (like Metrc), your loyalty program, and your debit card payment processor. They also prohibit selling over the state’s purchase limit amount. POS software should be easy and intuitive to use, and function as expected so budtenders can easily and accurately sell to cannabis customers.

In the U.S., cannabis markets refer to the local or state areas that dispensaries operate in due to the varying laws and regulations imposed by those jurisdictions. This variation in regulations means that each state (or market) has unique business models, consumer expectations, and ways of operating. In other industries, the market could be more granular, like by city, or larger, like by region.

Cannabis is taxed differently than other goods and services. Cannabis taxes and tax rates will vary by state (and sometimes by county and/or city). Read this blog post to learn how to calculate cannabis taxes.

Oregon's Cannabis Tracking System (CTS) is an integral part of medical and recreational marijuana products in the state's legal adult-use consumer and medical markets.

All OLCC recreational marijuana licensees and their employees are required to use CTS.

A cannabis caregiver is a person who is registered with their state, qualified by all state standards, and has agreed to assist with a registered qualifying patient’s medical use of marijuana. In short, a caregiver is a person that can help a patient purchase and medicate with cannabis.

Because cannabis is still federally illegal, dispensaries do not have the same access to banking services such as checking accounts, loans, and credit card processing. This means that many legal dispensaries are forced to operate on a cash-only (or primarily cash) basis, presenting multiple problems for store owners. Cash management is often a time consuming and difficult process, but until alternatives are presented, it’s one of the few options available. Read this post for 18 tips for safe and effective dispensary cash management.

A cashless ATM is a process of scanning a customer's debit card to pay for a transaction and charging the customer a fee as if they withdrew money from an ATM.

A Certificate of Analysis, or COA, is a document provided by a third party that analyzes the compounds found in cannabis. The COA outlines the strain’s cannabinoid and terpene profiles, as well as tests for pesticide residue or heavy metals. There is also information included on the product’s manufacturer, testing method used, and batch data. Not all manufacturers are required to provide a COA.

A clone is a cannabis plant that is an exact genetic copy of its mother plant. It is a young female cannabis plant with stable genetics. Typically, growers elect to raise clones purchased from reputable breeders because they pose less risk of getting a plant with poor characteristics.

The process of closed-loop extraction begins when raw cannabis flower is sprayed with a pressurized solvent (usually butane or propane) which separates the cannabinoid and resin-producing trichomes from the plant. Afterward, what’s left is a layer of sticky resin, which is then purged, dried, and processed into the desired form of concentrate, such as live resin, wax, or shatter.

Compliance refers to following rules or expectations. Within cannabis, regulatory agencies care about three main things — public safety, illicit markets, and tax revenue. The rules for each market and license type vary. For retailers, there are regulations around where dispensaries can be located, who can enter, how much cannabis they can purchase, and how their goods are packaged and labeled. There are also strict rules on inventory management. In Metrc states, every sale must be reported to Metrc, and every plant must be tracked from the time it’s a seedling to the time it’s sold. Non-compliance could lead to loss of license and/or fines.

The compliance manager at a dispensary must monitor the changing state and local regulations, develop and maintain records, and create policies and procedures to keep staff accountable. They also perform regular audits of inventory and facility operations. If any problems arise from the aforementioned duties, the compliance manager must take immediate corrective action.

A cannabis concentrate is a broad term to describe a product that is derived from a cannabis flower that is processed into a concentrated form. There are many forms of concentrates such as tinctures, concentrates, vaporizer cartridges, hash, shatter, and wax.

Consumer demographics are statistical data relating to the unique, identifying characteristics of customers. This can include age, location, gender, marital status, buyer type, and much more. Understanding consumer demographics can help a cannabis business make informed decisions regarding marketing, communications, inventory, product selection, etc. See this resource for a breakdown of cannabis consumer demographics by market.

Cultivation is the process of growing cannabis plants. This can be done through either indoor or outdoor farming and requires in-depth knowledge of proper soil, growth temperatures, light, water, pest management, and more.

Cumulative taxes calculate each tax against the gross receipt plus applied taxes. In California, this is a layered taxation that goes in the order of excise tax, sales tax, then local business taxes. See this post for how to calculate cumulative taxes.

Curbside pickup is a process where dispensaries offer an online menu for customers or patients to shop and place an order. They can then come to the store and pick up their products without entering the physical dispensary. Budtenders collect payment and deliver the products to the customer's car. This process was popularized by the onset of the COVID-19 pandemic in 2020.

The customer experience includes every aspect of customer interaction within a cannabis dispensary, brand, and products. This can include what a customer thinks of a website, or the flow of a dispensary, or the quality of the cannabis they purchased. Improving customer experience is imperative for cultivating high revenue and attracting returning customers.

Customer retention is the process by which customers return to your dispensary for future purchases. Attracting new customers is one tactic for store growth; retaining the customers you already brought in is another. You can easily retain customers by providing quality products, and appropriate prices, and satisfying them in all parts of the customer experience. If they have a poor experience, they will take their business elsewhere. See this post to learn how to succeed at dispensary customer retention.

Typically, the decriminalization of cannabis offenses means that there will be no arrest, jail time, or criminal record for the first-time possession of a small amount of marijuana for personal consumption. Here is a list of states that have decriminalized cannabis.

Deli-style is a dispensary workflow that includes budtenders bringing flower over to a customer or patient in a jar and weighing it out in front of them. They can usually look at and smell the product but are not allowed to touch it. There are pros and cons to deli-style selling. Customers love the transparency, but it is extra work for the staff. Other risks include slowing down check out, labeling containers in-store, accidental spillage, and overweighing.

In states where cannabis delivery is legal, there are requirements for cannabis distributors or dispensaries to fill out a delivery manifest (shipping manifest). This must accurately reflect the inventory being transported and cannot be altered or voided at any point during transport. It's helpful to use cannabis delivery standard operating procedures to maintain accurate reporting.

A Digital payment is the transfer of currency from one account to another using digital payment technologies, such as mobile wallets like Aeropay or mobile payment apps. Digital payments are growing in popularity at dispensaries because they are a compliant payment solution for retailers.

A discrepancy is an instance of difference or inconsistency. Discrepancies within cannabis businesses relate to inventory and can lead to issues in both reporting accuracy and compliance with the state. Here’s a resource that highlights 6 common inventory discrepancies at dispensaries.

A dispensary is owned by a licensee in a legal market and is a place where customers or patients can access legal cannabis safely. There are two types of dispensaries — medical and adult-use. Depending on state and local laws, a dispensary may operate as both.

A distributor supplies cannabis products to cannabis businesses and consumers. Distributors may also provide secure storage services for other cannabis businesses as it can be dangerous to store large quantities of products in areas without high security.

Ecommerce is the process of conducting business online. Specific to cannabis businesses, ecommerce could include order ahead, online ordering, delivery, and curbside pickup. With the onset of the COVID-19 pandemic, dispensaries had to shift operations to accommodate ecommerce, and many states updated regulations to allow for this type of business process. To learn more about setting up ecommerce in your dispensary, read this post with dispensary workflows or utilize order ahead/delivery standard operating procedures.

An edible is a food product that contains cannabinoids, mainly CBD or THC. Edibles may include things like pastries, gummies, candies, brownies, beverages, and more. There are also varying levels of dosage in edibles.

An "eighth" of cannabis refers to 3.5 grams of flower. The reasoning is that 8 eighths make up an ounce of marijuana.

Employee permissions are the level of access granted by dispensary managers or owners to their employees. This can involve access to inventory, cash drawers, reporting, or other aspects of the POS software. Setting appropriate permissions ensures employees aren't able to see information or make changes that aren't applicable to them.

An entourage effect in cannabis refers to how certain compounds within a marijuana plant interact with each other in the human body. An entourage effect occurs when multiple compounds within the cannabis plant interact in sync, often producing more pleasant or potent effects than they would if a person only ingested one compound.

An excise tax is a business tax — specifically for cannabis products — that is passed on to the customer. All legal recreational cannabis sales must include an excise tax which is collected quarterly by the state to be used for various initiatives such as mental health treatment, substance abuse programs, environmental efforts, and cannabis research. Excise tax rates vary by state.

An exit package is a sealed container provided by a dispensary at the point of sale in which all sealed cannabis packages are placed. The package is required by state regulations and must be designed to keep the contents secure and child-resistant.

Expansion is the process of opening up a second, third, fourth, etc. physical dispensary. Expansion can also mean growing existing dispensary revenue by improving processes, updating technology, or eliminating waste.

In Colorado, an individual patient may have no more than six marijuana plants, with three or fewer being mature. A patient may be prescribed more than this allotment by their physician. This is referred to as an “extended plant count.”

Cannabis extracts are specific concentrates that are produced with the use of a solvent. Common solvents used for this include propane, butane, and ethanol. Types of cannabis extracts include crumble, wax, shatter, budder, live resin, etc.

A File Naming Convention (FNC) is a standardized way of naming products. A FNC takes into account what a product is and how it relates to other products. Simply put, it’s the way a dispensary names and labels its products. For cannabis businesses, where inventory compliance is required, naming conventions are especially important. See this post for the best practice in naming conventions for your cannabis products.

First In First Out (FIFO) is an inventory management system used in many industries to ensure that products are sold long before they expire. Check out this post by Northstar to learn more about FIFO.

Flower is the general term used to describe the consumable (smokable) part of a female cannabis plant. Most dispensaries sell several types or strains of flower, each with different flavor profiles, price points, and expected feelings or effects associated with them.

Franchising is a business model that allows a franchisee access to a business’s ( the franchisor's) proprietary knowledge, processes, and trademarks. The franchisee is allowed to sell a product or provide a service under the business’s name. Franchising is popular in fast food, fitness, and other industries, and is growing in popularity in cannabis. Several brands now offer franchise opportunities. The benefit of a franchise is quick time-to-market, fewer start-up decisions (like products, logo, and store layout), and advice from industry experts. The downside is decreased decision-making authority and flexibility within the business and paying fees to the franchisor.

In a cannabis dispensary, the Front of House (FOH) is the customer-facing part of the business. It often includes a receptionist/greeter who will check IDs and manage a queue. It's also where customers/patients talk with budtenders to find the products they're looking for and eventually check out and purchase those products. Maintaining a friendly, informative, organized, and efficient environment in the front of house is imperative for dispensary success.

Ganja is a slang term for marijuana. The word is associated with the West Indies, but actually originated in India.

Similar to a wine sommelier, a cigar aficionado, or a master chocolatier, a Ganjier is a certified professional of cannabis. The Ganjier is equipped with the knowledge and ability to successfully assess cannabis quality among other cannabis business expertise.

A dispensary’s hardware will usually include computers or tablets to enter in sales and run payments, mobile scanners to check IDs and audit inventory, receipt printers, label printers, and any other physical technology needed to run a cannabis business. It’s important that your hardware is compatible with your software, modern and high-speed, and aligns with the store layout or flow of your store.

Headless ecommerce is the separation of the front end and back end of an ecommerce application. This allows brands to embed technology from third parties while also being able to build whatever they want on their end.

Hemp is derived from non-intoxicating cannabis Sativa L. Hemp is genetically distinct from marijuana and has a variety of uses including fiber from the stems, protein from the seeds, and oils from the leaves and flowers. Hemp does not produce high levels of THC, but it can produce very high quantities of CBD. Hemp is regulated very differently from cannabis as it's legal to cultivate and sell under The Agricultural Improvement Act of 2018 (2018 Farm Bill).

Hybrid strains of cannabis are a mixture of Indica and Sativa strains. They allow the consumer or grower of the plant to take advantage of the best parts of each parent plant and create a hybrid option that fits their desired effect and flavor profile.

The ice cream cannabis delivery model involves a driver carrying cannabis inventory in their vehicle and making multiple deliveries in one trip.

Just like your neighborhood ice-cream truck, cannabis drivers are allowed to receive and process orders within the vehicle and oversee inventory management, driving, and selling. This process is also called “dynamic delivery" or “warehouse on wheels.”

The illicit or “black” market for cannabis includes all sellers of marijuana products that are doing so illegally. This could be a store that is not properly licensed in a legal state or a dealer that is selling cannabis illegally to consumers in legal or not legal markets, therefore avoiding regulations, taxes, and all other laws and regulations in place by the state. The term “black market” is not the preferred nomenclature nowadays because of its racist connotations.

Indica is a subspecies of the cannabis plant. Cannabis Indica strains generally have a short stem and broad leaves and are associated with a more physical high in comparison to Sativa strains, which are often considered more cerebral. However, this thinking is no longer scientifically accurate as it has been found that different combinations of cannabinoids and terpenes are much more telling of the effects of the strain. Many dispensaries and cannabis industry professionals are moving away from the traditional Indica vs. Sativa nomenclature as it's more beneficial for customers to purchase products based on feelings or moods.

An integration is the process of joining two technology solutions together through an API, for more info, see API.

Auditing inventory is the process by which a dispensary inventory manager or employee physically counts all inventory in the store. Once inventory is counted, you'll find and reconcile discrepancies between the physical count and the recorded counts in Metrc and your POS.

Here is an inventory audit SOP template that walks through step-by-step best practices for auditing dispensary inventory.

Inventory intake is what happens when new products are delivered to your dispensary. It's the process of bringing inventory into the store, including comparing the manifest with what was ordered, counting to ensure all inventory was sent, labeling the packages, securing storing the items, and adding the products to your POS and Metrc inventories.

Here is an inventory intake SOP template that walks you through the step-by-step best practices for bringing new products into your store and preparing them for sale.

Inventory management is the process of tracking where cannabis inventory is, how much of it you have, when more products need to be reordered, what products are close to expiration, and what discrepancies exist between your physical inventory and your inventories in your POS and Metrc. In order to remain compliant with the state, managers must track products at an individual package level and audit inventory regularly.

The inventory manager at a dispensary will perform inventory audits on a regular basis. They also keep track of inventory that needs to be ordered or that will expire soon. They label all products and take note of ones that are nearing expiration and move them to the correct shelves in the dispensary. The manager will have to keep the inventory in the store organized and keep track of any discrepancies. Because of the intense regulations around cannabis businesses, the inventory manager role is very important.

Inventory shrinkage is defined as inventory and revenue loss due to internal and external theft, vendor fraud, damage to inventory, or human errors in the customer’s favor. To calculate your retail shrink rate, take the book value (the amount recorded previously) of the total inventory and subtract the physical inventory value (the actual amount).

An inventory transfer is the documentation or request by a cannabis business to move their products from one licensed facility to another.

Kief, also known as pollen or dry sift, refers to the resin glands which contain the terpenes and cannabinoids from the marijuana plant. While flower without kief still contains those elements, kief alone will contain much higher levels than the remainder of the plant.

Dispensary kiosks offer cannabis retailers a new way to support customers and connect them to products they’ll love. A cannabis kiosk allows a customer to browse the product catalog, learn about those products, and make a purchase — all without having to interact with a budtender.

The best cannabis kiosk technology providers combine cannabis education and product consultation with an intelligently designed shopping experience to leave customers more confident and loyal and stores more profitable.

A legal market is usually a state-specific cannabis market that allows for either medical or recreational cannabis consumption and purchase. Legal markets in the United States include Alaska, Arizona, California, Colorado, Florida, Maine, Maryland, Massachusetts, Michigan, Missouri, Montana, Nevada, Oklahoma, Oregon, and many more.

Cannabis legalization can be broken into two parts: medical and recreational. Medical legalization means that a cannabis patient can access medical marijuana if they receive the proper documentation from a doctor and follow the specified state protocols. Recreational legalization means that anyone over a state-specified age can purchase cannabis from a licensed retailer with a valid ID.

Legalization as a whole means that a person cannot be arrested, ticketed, or convicted for cannabis consumption, purchase, or ownership if that person is following all necessary rules/laws.

Cannabis licenses vary by state in terms of difficulty to obtain, cost, competitiveness, and other factors, but all legal markets require dispensaries to be licensed.

Once an owner has a license, they can legally operate a cannabis dispensary in the state in which the license is obtained. Any dispensaries or cannabis sellers without a license are considered part of the illicit market.

A licensee is a person who has obtained a license to grow, distribute, sell, deliver or test cannabis.

A limited access area is a building, room, or other contiguous area upon the licensed premises where marijuana is grown, cultivated, stored, weighed, packaged, sold, or processed for sale, under control of the licensee. This area is not accessible to customers/patients or any other non-employees.

Live resin is a cannabis concentrate that is created by flash freezing a marijuana plant immediately after harvesting and keeping it at freezing temperatures throughout the extraction process. Live resin is usually extracted using a solvent such as butane. This ensures that the concentrate will maintain its terpene profile and retain its original fragrance and flavor.

Living soil is a planting material used for cannabis that has active microbiology and biodiversity. This may include worms, bacteria, protozoa, amoebas, and kelp extracts. This type of cultivation technique is considered healthier and safer than standard soil use because it helps eliminate the need for fertilizers and bottled nutrients.

Looping is the illegal practice of customers purchasing their daily limit of cannabis and then "looping" around the block to purchase more cannabis at either another dispensary or the same store. This is done to get around cannabis purchase limits which are required in many states. To keep customers from purchasing more than they are allowed, Flowhub has built-in purchase limits that automatically prevent a sale greater than a customer's daily, weekly, or monthly allotment.

A cannabis loyalty program rewards repeat customers by offering special discounts, deals, and incentives when they frequent a dispensary. Loyalty programs are helpful for improving customer retention and helping to differentiate from competitors.

The Maine Office of Marijuana Policy is the regulatory body of Maine’s medical and adult-use cannabis businesses and policies. For more information, visit their website.

Marijuana is a term referring to cannabis, specifically when it is smoked. There is a movement to limit the usage of this term because of its historical connotations with anti-cannabis propaganda from the 1930s.

The Marijuana Enforcement Division (MED) is a Colorado regulatory agency that specifically regulates Colorado cannabis companies. The MED ensures that dispensaries remain compliant with all Colorado cannabis laws through multiple avenues, including fines and license removal. For more information, go to the MED site.

The Maryland Medical Cannabis Commission (MMCC) develops policies, procedures, and regulations to implement programs that ensure medical cannabis is available to qualifying patients in a safe and effective manner. The MMCC oversees all licensing, registration, inspection, and testing measures pertaining to Maryland’s medical cannabis program and provides relevant program information to patients, providers, growers, dispensers, processors, testing laboratories and caregivers. For more information, visit the MMCC website.

The Massachusetts Cannabis Control Commission is the regulatory body in the state of Massachusetts. The commission oversees the medical and adult use marijuana markets in the state. For more information, visit their website.

A Medical Marijuana Card is an identification card issued by a state to allow patients with clearance from a doctor to obtain, possess, or cultivate cannabis for medical use. The process for obtaining a card varies by state, but all legal medical markets require a medical marijuana card (or official identifier).

Metrc (Marijuana Enforcement Tracking Compliance) is a software platform developed by Franwell that is designed to track all of the inventory moving through a cannabis dispensary. Enforcement agencies use data inconsistencies in Metrc as red flags to detect diversion. If these red flags are severe enough, they may spur an investigation that could lead to shutting down operations and hefty fines.

Multi-location dispensaries consists of two or more stores operated under the same brand and ownership. Multi-location dispensaries often operate in the same state or local jurisdiction.

Multi-State Operators or MSOs are cannabis companies with operations in multiple legal states. The largest MSOs manage and control their own supply chain, including cultivation, manufacturing, wholesaling, and distribution.

The Nevada Department of Taxation is the regulatory authority in Nevada that oversees the cannabis industry. For more information, visit their website.

Non-compliance in the cannabis industry means that a marijuana business is not in compliance with specific state or local laws. The business will be at risk of penalties from either the state or local government which include but are not limited to, fines, revoking of a license, or other consequences.

The Oklahoma Medical Marijuana Authority, or OMMA, was established to oversee the medical marijuana program for the state of Oklahoma. It is responsible for licensing, regulating, and administering the program as authorized by state law. Operating under the Oklahoma State Department of Health, the primary goal is to ensure safe and responsible cannabis practices for the people of Oklahoma. Note: The state of Oklahoma is moving to Metrc as its seed-to-sale system.

Onboarding, also called implementation, is the process of integrating a new employee into a cannabis work environment. It is designed to give the new hire all of the tools necessary to be successful in the business. This may be an informal or formal plan, but will include job expectations, company policies, training on job-specific roles or technology, and other information as necessary.

An online menu is a list or catalog of products that a dispensary offers. The menu may be integrated through an industry partner, like Dispense or Leafly, or may be done by the dispensary on their website. Online menus allow customers to see what products are for sale and/or in stock without visiting the physical store.

Order Ahead for dispensaries is the process of offering customers/patients the ability to pick out what they want through an online menu, and formally place their order. Once the products are selected and order placed by the customer, the dispensary receives the order and prepares it. The dispensary notifies the customer when the order is ready and the customer/patient goes to the dispensary to pay and pick up their order. It's helpful to use dispensary order ahead standard operating procedures to remain compliant and organized.

The Oregon Liquor Control Commission (OLCC) is a government agency of the state of Oregon. The agency was originally established to control liquor sales in the state, but with the legalization of recreational use cannabis in 2014, authority of regulation was given to the OLCC. For more information on the OLCC, visit the OLCC website.

Out-the-door (OTD) pricing is the process of including all relevant taxes or additional charges in the final cost of a product sold at a dispensary. Customers that are purchasing cannabis products will know the final price before that product is rung up. The pros of using OTD pricing include customers knowing exactly what they are going to pay and eliminating adding up taxes during transactions.

One aspect of compliance, especially in Metrc, involves a seed-to-sale process that gives each item a UID (Unique Identifier). There are two types of tagged inventory in Metrc: plant tags and package tags. Package tags have a distinct UID that identifies a product or products that are ready for sale or transfer to another licensee. This is how the state tracks a plant through the entire supply chain, ensuring that legal cannabis is sold to legal customers, and doesn't end up in the illicit market.

A dispensary’s par level is the minimum amount of inventory needed to meet customer demand. A par level report generates a list of the items that are at or below par level so you can order more. Identifying par levels will help ensure you don’t run out of products, which leads to lost revenue.

A patient at a dispensary has a state-issued medical card which gives them access to medical dispensaries. Patients are not the same as customers (Adult-Use/Rec) as they usually are allowed more affordable prices, more products, and in states where only medical marijuana is legal, access to cannabis products.

Payments are the different forms of payment accepted by a dispensary. Currently, dispensaries are only allowed to accept cash, ACH, cryptocurrencies, and point of banking transactions. Credit and debit card transactions are still technically not a legal form of payment because these card processors operate under federal oversight and cannabis is federally illegal. Point of banking, which uses bank card, is accepted because it's essentially an ATM transaction. Learn more about the difference in our payment processing guide.

The pizza-style cannabis delivery setup looks and functions essentially the same as a traditional pizza spot. There is a central location (your brick-and-mortar dispensary) where you receive, package, label, and dispatch the cannabis products.

Deliveries are made one transaction at a time. In some states, there is an option to take multiple orders at a time to cut back on delivery time, but all orders must be processed and packaged before leaving the dispensary. Check your state and local regulations for clarification.

A relatively new concept in cannabis payments, point of banking functions similar to traditional ATMs, where a customer inserts their bank card and enters their personal identification number (PIN). However, instead of giving back cash, the transaction is electronic, providing proof that cash has been debited from the customers’ bank account and deposited into a business account. This process — especially if integrated with a dispensary point of sale — feels like a traditional debit transaction for customers and streamlines checkout. See our guide to learn more about point of banking and the rules of cannabis payment processing.

Point of sale or POS relates to the moment that a customer is making a purchase. This is when a dispensary will calculate taxes, adjust inventory, offer specials/discounts, and collect payment. Dispensaries need POS software built specifically for the cannabis industry to automate the check out process, improve customer experience, facilitate quick transactions, and maintain compliance.

Some municipalities charge dispensaries a flat post-tax fee, instead of a tax. The post-tax fee will list as a separate fee for a transaction. This can create issues with accounting and reporting if the dispensary chooses to try to work around the fee by doing things like adding an accessory to the cart for each retail sale.

Potency relates to the strength or level of THC or other cannabinoids found in a cannabis product. The higher the potency of THC in a product, generally the more the effects will be felt.

Pre-pack, or pre-packaging, refers to the dispensary process of packaging marijuana before selling it to a customer. This provides a faster customer checkout experience and also allows the seller to control the portions that are sold.

The downside is that customers/patients do not get a hands-on experience in the dispensary. Unless sniffer jars are available, they may not be able to smell or see what they're buying.

Learn more: 4 benefits of pre-packed cannabis flower

A pre-roll is a joint that has already been prepared by either a cannabis dispensary or vendor. They are consumer-ready and save the buyer the trouble of grinding and rolling their own joint.

A dispensary’s product catalog is the source of truth for every inventory item that comes into the store. It creates a uniform way of showing products both in menus and in reporting. It’s essential to standardize your naming conventions to ensure that there are no redundancies or errors that may compromise your ability to remain compliant and organized.

Propane Hash Oil (PHO) is a cannabis extract that is made using propane as the solvent.

A provisioning center is a legal term used in Michigan to describe a medical cannabis dispensary. It is a location where cannabis is sold to registered medical patients and primary caregivers. Michigan law has made it clear that a dispensary in the state must only call itself by the term ‘provisioning center’ as well as use the term ‘marihuana’.

Purchase limits are the maximum amount of cannabis that a consumer is allowed to be prescribed or purchase from a marijuana dispensary. This amount varies depending on the state and whether the consumer is a medical patient or an adult-use consumer. Some states have daily limits; others have monthly limits. Purchase limits were created in an effort to minimize diversion to the illicit market.

A restricted access area is a secure area within a dispensary. The area is not permissible to enter for patients without a proper medical card or that are under 21 for adult-use dispensaries. The restricted access area is considered the space in the dispensary where products are displayed and sold. No one under 21 or without a legal medical card may enter this area.

Retail dispensaries are shops that legally provide cannabis to adults for recreational purposes. These shops function in many ways like a standard retail store, exceptions being state compliance mandates and payment limitations.

Radio Frequency Identification Tags (RFIDs) are used by state traceability systems to keep track of cannabis platns. These tags contain a chip and antenna for wireless identification of the objects they are attached to.

Rick Simpson Oil is a cannabis concentrate created in 2003 by Rick Simpson to treat his basal cell carcinoma. RSO is widely used for medical benefits and has been found to relieve cancer symptoms.

Rosin is a cannabis extract that is created by applying heat and pressure to the flower in order to withdraw resinous sap.

Sativa cannabis plants are taller than Indica plants. They also have narrower leaves and longer flowering cycles. The effects of Sativa are often attributed with energetic feelings, although due to years of cross-breeding, the effects are more easily identified through cannabinoid and terpene levels.

A seed-to-sale solution is an all-in-one system that tracks every stage of the cannabis supply chain. It tracks the entire process from the cannabis seed to sale, including growing, manufacturing, testing, distributing, and selling.

A common misconception that is affiliated with seed-to-sale software is that it is a comprehensive solution for vertically integrated cannabis dispensaries. In reality, seed-to-sale systems come with a long list of downsides that many are unaware of.

Shake consists of smaller marijuana buds that fall off of the larger nuggets. Shake can be of varying qualities and is often sold for a lower price than the standard bud at a dispensary.

Shatter is a cannabis extract that is typically made through butane extraction. The extract has grown in popularity due to its glassy look and high THC content.

SMS is an abbreviation for Short Message Service. An SMS message contains no images or videos and is limited to 160 characters. SMS messages are often used by dispensaries to send texts directly to customers highlighting things like promotions, loyalty points, changes in store processes, notify that orders are ready, or conduct satisfaction surveys.

Dispensary software includes all sales, inventory, reporting, and managing tools that a cannabis business uses. This software may be either cloud-based (log in and access through the web) or locally installed (physically installed on the computer).

Cannabis specials are deals, discounts, or promotions offered by a dispensary to help retain customers and keep up with competition. Common dispensary specials include “Buy Something, Get Reward’ or ‘BOGO,’ cart-level discounts, and event discounts.

Standard Operating Procedures (SOPs) help create efficiencies, maintain compliance, promote transparency, and mitigate risk within a cannabis dispensary. Simply put, SOPs are detailed, written explanations of how everything should be done, or what process needs to be followed to accurately complete a task within a cannabis dispensary. In most legal states, SOPs are required to procure a license.

Access our free library of editable dispensary SOP templates to help get started!

State reporting is the process of sending data to the state track-and-trace program. Reporting must be done correctly and consistently to stay compliant. Each state has different regulations on how and when sales data is shared with them.

The store layout of a dispensary includes every aspect of the way the physical space is set up. Some factors that contribute to how a dispensary’s design should look include: the brand, state requirements, inventory, staff, location, and customers. 4 common models for dispensary store layouts are the bank model, the pharmacy model, the mobile model, and the kiosk model. There is no right or wrong for store layout or workflow, it’s dependent on how you choose to move customers and inventory through the store.

To determine which dispensary store layout is best for you, take our quiz!

Cannabis strains come from the process of breeding male cannabis plants with females to create different varieties that include some aspects of each parent plants. Different strains are associated with different effects due to lineage information and terpene content.

A dispensary’s tech stack includes all of the technology and tools that they use. This may be an array of retail and inventory management hardware and software, digital signage, kiosks, apps, and anything else that proves useful for day-to-day operations as well as long-term sustainability. It’s ideal, and most efficient, for your tech stack, or whole store technology ecosystem, to integrate with each other.

Terpenes create the flavor profile in cannabis flower. They are oils that are secreted in the same glands as cannabinoids, such as CBD and THC, and they were developed by the plant to repel predators and lure pollinators. For more on terpenes, check out the terpene guide from Maggie's Farms.

Delta-9-tetrahydrocannabinol (THC) is a cannabinoid found in cannabis. THC is the most well-known molecule in marijuana and is sought after for its euphoric, psychological effects.

Tetrahydrocannabinolic acid (THCa) is an inactive compound found in the trichomes of living cannabis plants. THCA doesn't get one “high,” although it is the precursor to THC, which it becomes through a process called decarboxylation.

Cannabis tinctures are made by infusing cannabis with alcohol. They are often used for medicinal purposes, are taken orally, and can contain high levels of both THC and CBD.

Similar to how liquor stores display the highest quality products on the top shelf, top-shelf is an expression often used in cannabis dispensaries to highlight high-quality products being sold. These typically come from premium growers and are sold at a higher price than other products at that dispensary.

Topicals are cannabis-infused lotions, oils, and balms that users apply directly to the skin for pain and inflammation relief. Cannabis topicals are non-intoxicating so the user can experience the medicinal properties of cannabis without the psychoactive effects.

Traceability systems in cannabis refer to software that tracks the lifecycle of a cannabis plant from the seed to its sale at a licensed dispensary through RFID tags.

A track and trace system is an inventory control system used by state regulators in legal cannabis markets to track from cultivation to sale. The system tracks the cannabis from the planted seed to the packaged product to the moment it is sold to a cannabis consumer or patient.

Compliance with the state track and trace system is required and highly important for cannabis businesses. The most common track and trace system is Metrc, though Biotrack and Leaf Data Systems are used in other legal markets.

Uptime is the time that a website or application is available in a given period. It’s presented as a ratio of time available divided by total time.

For example, a website may have 99.9% uptime. This allows for 43 minutes and 49 seconds of downtime per month.

A vape is a marijuana smoking device that creates enough heat to turn the active compounds in cannabis flower or concentrate into a vapor. This may be done with a cannabis vape pen, or other tools to vaporize flower. Vaping is a preferable alternative to smoking because it does not release tar odors that can be associated with burning marijuana. There are still studies being conducted on whether vaporizing cannabis is a healthier alternative to smoking. For the time being, there are risks associated with vaping depending on the type of cartridge, device, and ingredients used.

Vertically integrated cannabis businesses own and manage all aspects of the supply chain. They own the cultivation, lab, manufacturing, and retail sectors of the business. This means that they can save money and time and consolidate the quality of their products.

Visual merchandising describes the way a dispensary displays its products in order to appease customers and improve the amount purchased. This may include glass display cases, digital signage, or the general dispensary design.

Wax is a cannabis concentrate that often looks similar to honey and contains very high levels of THC.

Weed is a slang term for cannabis. It has grown in popularity as younger generations try to distance themselves from other ways slang terms such as “dope,” “kush,” or “reefer.”

For dispensaries that offer deli-style flower, a weigh heavy threshold allows the budtender weighing the weed to "weigh heavy" and not force the budtender to break up big nugs. The dispensary sets a threshold that gets added to the weight tier so that extra weight is added free of charge.

Example: A customer want to buy an eighth (3.5g). The budtender weighs out 3.7g because they're big nugs. The extra 0.2g are offered for $0. The customer only pays for the 3.5g.

A cannabis wholesaler is a licensed person or business that sells cannabis products directly to other businesses for resale, such as dispensaries. Wholesalers often provide larger quantities of either their own brand or a variety of brands, which may come at a discount for the reseller to profit from once sold individually.

Dispensary workflows are the processes by which employees, managers, and owners get work done. Workflows may revolve around different aspects of each job, like creating new workflows to handle online ordering and curbside pickup or understanding the inventory intake process.