Note from Flowhub: This guest post was written by Ricki Rebeiro, owner of Oklahoma-based dispensary company ElectraLeaf. ElectraLeaf started from one stand-alone store and now has eight total licenses. Read on for Ricki's advice for new dispensary owners, based on his personal lessons learned working with many point-of-sale software providers in the cannabis industry. Thank you Ricki!
Owning, operating, and managing a cannabis dispensary is different from any other type of business. My professional experience started in retail, managing large-scale multi-franchise auto dealerships almost fifteen years ago. If you also have a retail management background, I can tell you there are many skills that’ll come in handy.
But there are other aspects of dispensary ownership that will be completely new and different.
Everyone who enters the cannabis industry undergoes a crash-course in laws, compliance, and marijuana inventory management. You must learn quickly, and often you don’t have anyone helping you do it. One particularly important consideration is your dispensary point-of-sale system.
I’ve seen many owners and operators struggle to get their dispensary up and running because they don’t know what questions to ask point-of-sale vendors. Your ability to process sales, manage cash, and stay in compliance is your number one priority. You absolutely need a POS solution, and there are several to choose from. New companies are cropping up all the time.
I’d like to help you learn from some of my mistakes. In this post, I’ll outline 5 key factors to consider when choosing a dispensary point-of-sale system and the important questions you need to ask before you sign a contract.
1. Check in
When you see hundreds of patients a day, as we do in our medical marijuana dispensaries in Oklahoma, efficiency is important. No one wants lines, so you need to make sure your system facilitates a quick and efficient in-store process for all patients.
Ask dispensary software vendors to show you the check in (as well as checkout) process during the demo, including:
- What is the process for checking in customers?
- Is there a way to capture customer sources, or how they heard about your dispensary? If you’re spending money on marketing or events, you need to capture this information to accurately gauge ROI.
- Do they have a ID scanner to streamline check in and verify age?
- Does scanning IDs put the patient into the system in a user-friendly and real-time manner?
- What is the customer experience of checking in?
The handheld, mobile Nug from Flowhub is the standard of doing business in my stores. It reduces human error and creates a positive experience for our medical marijuana patients.
Whether you have one cannabis business or many, you need to have visibility into the performance of all parts of the business. When you’re assessing vendors, look for the ability to see product breakdowns, easy-to-decipher tables of net sales, and comprehensive executive dashboards. Make sure you see these reporting capabilities in action during the demo and that they run quickly and easily.
Ask about the following reports:
- Par levels
- Employee performance, such as sales by budtender, time sheets, and activity by budtender (like cash drawers, making sales, etc.). To prevent theft and human error to your inventory, you need to be able to see every little movement that happens and who did it.
- Daily, weekly, and monthly reports to see busy times of day, busiest days, and average number of transactions and cart size. This will help save money by staffing your dispensary effectively.
- State reporting, like discrepancy reports or the OMMA Report in Oklahoma, or reports to accommodate your specific state’s needs.
3. Inventory and compliance
The single most important factor in cannabis that makes it different from other industries is the focus on inventory and its relationship to compliance. You may be tempted to underplay this, but cannabis compliance is everything in this business.
You must care, and you must get it right, or your business could be on the line. Having the right dispensary POS system will save you so much time, money, and stress in this department.
Having the right dispensary POS system will save you so much time, money, and stress.Ricki Rebeiro, Owner at ElectraLeaf
Ask the following questions about inventory and compliance:
- Can you transfer inventory between rooms, or even between stores? Or do you have to manually remove and add inventory to move it?
- Does the system work with a barcode scanner? How do barcodes look on labels? What size are they? You need to make sure your labels fit on your packages and that you can easily scan them to make a sale.
- How does the system handle inventory discrepancies or loss? When you first open a store, you don’t think about how much inventory loss or shrinkage will be until you can actually track it. You need to be able to track shrinkage or your inventory or state reporting will be incorrect.
- Does the system do step pricing? From an inventory perspective, if you’re doing 300 transactions a day and sell everyone an eighth that’s overweight by a half gram, you’ll lose $1,500 a day in inventory. It’s hard to track that on point-of-sale systems without step pricing. Not having step pricing puts you in a weird position in the state of Oklahoma because you have to report loss of flower that you can’t account for, but you know exactly where it went. Budtenders got lazy and patients got more bud than they paid for and no one knows that they are doing anything wrong. This is a major problem. I would go so far as to say you can’t operate a dispensary without step pricing.
- How does the system work with state reporting? For states with a reporting process like Metrc, make sure there’s an API with Metrc that allows for seamless pushes of sales to Metrc. For states like Oklahoma, make sure the system has figured out OMMA reporting.
- How does the system track purchase limits? What does that functionality look like and how accurate is it? Also, can you see purchase history?
To be truly effective for your business long-term, your point-of-sale system needs to be easy to use.
When you’re searching for a new point-of-sale software, pay close attention in the demo. Is it easy to navigate? Does the layout make sense? Can you quickly find what you want to do, even if you’re unfamiliar with all the functionality? Does it work on your preferred mac computers, or iPads, or other dispensary hardware?
Then, make sure your staff is on board. It can be difficult to get employees on the same page, so it’s important to have standard operating procedures to keep everything uniform, especially with more than one store. If your marijuana POS system is difficult to use, you will struggle with adoption and consistent use. If employees are using the system differently, you will quickly have problems with inventory, managing cannabis products, and report accuracy.
If you haven’t hired employees yet, ask the vendor for references. Call those dispensaries (or stop by) and ask their budtenders and managers how they like the platform. Especially early on, trust the input of your peers on matters such as these.
Talk to several different dispensaries to get a broader sense of whether your expectations will be met. They will also be able to explain what it’s like to get started on the system, onboarding timelines, and what to expect.
Read this next
Compliance Checklist for First-time Dispensary Owners
Anytime you work with technology, there will be issues. Resolving your issues quickly and easily is vital. If your dispensary pos system goes down, that could have a real impact on your bottom line.
Make sure the point-of-sale system you choose has great customer service. You’ll need it, especially in the early days as you input product, start to track inventory, and process cannabis sales.
Beyond support for issues, make sure the POS you choose is designed with your success in mind. Look for online support tools and resources, but also for a support team who will take the time to teach you how to better use the system.
Ultimately, make sure you trust the technology and team behind your point of sale with your business, because that’s what you’re doing. It’s easy to want to do business with people who want to help you and see your business thrive.
With that in mind, beware of empty promises. Don’t fall victim to being wined-and-dined by cannabis POS executives who then will disappear once you’re on the platform. The easiest way to test the quality of support is to again talk to dispensaries already using the system.
Then, try actually calling the support line. Does someone pick up? Are they friendly? Do they know how to help you (if not, are they willing to find the answers to your questions)? A little time researching here could save you many headaches in the future.
It can be scary out there. I have seen first-hand how some vendors are preying on new dispensary owners who don’t yet understand the bigger picture of management and cannabis compliance.
I’ve also seen other vendors who aren’t designed for cannabis try to enter the market. It may sound tempting, but don’t do it. You need a system that was built to do this, not one that could be retrofitted to work for your business.
By having the right POS that can manage inventory correctly, you’ll easily save $2,500 a month in inventory shrinkage.Ricki Rebeiro, Owner at ElectraLeaf
Finally, I get that this is an expense. Committing to a monthly capital expense before you open your doors is scary. But with software, and many things, you get what you pay for. And the cost will hit you somewhere. By choosing one of the cheaper POS systems, you may have immediate savings of $400 a month, but you’ll have significant loss. By having the right POS that can manage inventory correctly, you’ll easily save $2,500 a month in inventory shrinkage. Those small errors add up quickly.
As you start to evaluate cannabis POS systems, make sure you know what you’re getting yourself into. Take these questions with you and make sure you’re comfortable with the answer before signing.
In my years, I have seen many systems — and even used or contracted with a few — and have been disappointed more often than not. Signing with Flowhub has been the best point-of-sale decision I’ve ever made.
Flowhub has my best interest at heart, made onboarding extremely quick and easy, and includes all the functionality that I need to run a successful marijuana dispensary. I have not had one inventory or compliance issue on Flowhub. Not one.
Request a demo today to see for yourself.
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