The U.S. cannabis market saw a jaw-dropping $30B+ in retail sales in 2023.
But traditional POS giants like Square aren’t powering these transactions. Cannabis dispensaries aren’t your average retailer and require specific dispensary POS technology for more reasons than one.
Cannabis retailers are state-licensed operations, but they aren’t federally compliant until the federal government takes more action. Dispensaries have to juggle constantly changing regulations to operate in compliance amidst the excitement of a growing market, and one that’s powering half a million jobs and billions of dollars in economic value.
That’s why every cannabis dispensary works with a dispensary POS system designed specifically for its unique compliance and consumer needs.
Cannabis point of sale systems keep dispensaries legally compliant
State regulations require licensed cannabis dispensaries (as well as cultivation and manufacturing facilities) to report specific inventory and sales data to the government through a specified track-and-trace system. In most states, the system is Metrc or BioTrack.
No other industry faces as complex of regulations as cannabis dispensaries because they sell a product that’s both state-legal and federally illegal at the same time. State governments place strict oversight on licensed cannabis businesses, and it’s up to operators to understand every detail of remaining compliant.
Read next:
8 Factors Every Dispensary Needs in a Point of Sale
With cannabis POS systems, the worry is eliminated. Aside from features like age verifications and purchase limits, using cannabis point-of-sale software means even multi-state operators don’t have to stress about the state-by-state regulations that can (and often do) change every few months because their dispensary POS system does it for them.
Dispensary POS systems like Flowhub are solely focused on the uniquely complex cannabis market and ensuring total compliance for retailers, while generic retail POS software companies are also focusing on other growing industries.
Dispensary POS systems = stress-free payment processing
The challenge of selling a product that’s both state-legal and federally illegal extends to accepting payments from consumers.
While it’s not illegal for financial institutions like banks and credit unions to work with cannabis companies, thanks to a clarification made by The Treasury Department in 2014, many of these traditional finance institutions are hesitant to do so. Initiatives like The SAFE Banking Act have been moving through the Congressional floor for years, but it’s still yet to pass both chambers.
Cannabis dispensaries can’t take credit cards, and only 67% of consumers across all sectors carry cash at any given time. Beyond the customer inconvenience, cash also poses logistical and safety risks for cannabis dispensaries. It’s a high-risk option to have mostly cash on-site, and mostly cash sales make daily reporting a nightmare.
Dispensary POS systems have reliable payment processing in place for cannabis retailers to accept debit card payments. With Flowhub Pay, dispensary operators have seen an average 33% increase in revenue after using our payment processing platform. Plus, there’s no transaction cost or monthly fees for dispensaries. In fact, dispensaries earn rebates back on every transaction depending on the consumer convenience fee!
Simplify and streamline taxes (in every state) with cannabis POS software
Cannabis taxes are one of the most complex parts of running a dispensary, especially if you’re operating in multiple states.
On top of paying a sales tax like any normal consumer packaged goods (CPG) product, cannabis consumers are also charged an excise tax that varies by state. In some cases, there’s a local tax that depends on the municipality where the dispensary is located if that local government chooses to apply this tax.
Every state has a different tax rate percentage for cannabis purchases, and that percentage can vary drastically—even in one dispensary location, as medical cannabis purchases are typically taxed less than adult-use purchases.
Quick hit
What's the best dispensary POS software?
Dispensary POS systems must accurately calculate the tax rate of products depending on specific parameters that vary based on laws and location. Sophisticated cannabis point-of-sale software can auto-calculate the correct out-the-door price to consumers, so there are zero surprises for the customer at checkout and no confusing tax calculations for your team.
Partner with cannabis people who get it
It’s no secret: this industry is tough. Most non-cannabis professionals don’t understand the complexities of the cannabis market, and beyond that, they don’t have a grasp on the culture that keeps our industry a fun place to work. With cannabis-specific POS systems, the product is designed to be flexible and support the most pressing pain points of dispensary owners—even as they change over time.
Plus, Flowhub is committed to giving back and building a diverse, successful industry. The Flowhub Social Equity Program gives eligible applicants Flowhub’s software for just $4.20 a month for 3 years. Over $8M in award value has been granted to underrepresented dispensary owners since its launch in 2021, with their dispensary sales growing an average of 15% month over month with Flowhub.
Entrepreneurs are struggling to get into cannabis, and there is disproportionate access to capital that others take for granted. It’s time we offer some form of reciprocity to those targeted by the War on Drugs.
Kyle Sherman, Founder and CEO at Flowhub
As you select retail POS software for your cannabis dispensary, consider the long-term costs of not complying with state regulations. Cannabis-specific platforms like Flowhub are designed to ensure there are zero discrepancies between what happens in your store and what you report to state regulators.
Find a partner in Flowhub and book a demo to learn why 1,000+ dispensary owners trust us to keep their cannabis business running smoothly.
