What you buy for your dispensary is your foundation. It’s what makes your dispensary function and carries implications for every aspect of the business. Before buying products for your cannabis dispensary, consider the challenges you will face.
There’s an avalanche of things to think about, and naturally one of the most important items to consider is what cannabis products you purchase and the rationale behind those purchases.
Here are five major challenges most operators run into:
These 5 topics can be broken down into two categories: controllable and uncontrollable factors.
For anything you can control, you can put in standard operating procedures (SOPs) that can allow flexibility but guidance for your teams to operate.
For you non-controllables, you can set your teams up with the knowledge to navigate and circumvent these issues as they arrive. What you do to prepare your teams will have a material effect on how well they can execute the goals.
The cannabis industry is new. Even though this is not news to any of us, it does mean that a lot of what happens in the industry still needs to be figured out.
When purchasing cannabis for your dispensary it's important to know that you will have issues that might already be figured out in traditional retail.
The five categories above can be broken down into two more simple larger functions: process (payment, delivery, storage) and consistency (quality and availability).
By lumping these into larger categories we can identify what we can control and what is out of our control. Ideally you will find vendors that make all these factors easy on your dispensary, but that may not be the case at all in reality.
Knowing these factors and where you need more support is how you can hone in your operations to be more efficient and consistent.
The easier you make it on your teams to execute on these factors the more likely your teams will be able to deliver on sales and growth goals.
How to Prepare for Purchasing
Before getting too detailed, we must look at our two larger categories for what we can control and what we can prepare for our non-controllables. One of the biggest problems you run into at a dispensary is the operations are just clunky.
It's hard to find products, team members do not know when items are arriving, and the flow of a day can be dictated by when and what comes into the store.
Clear planning allows you as an operator to build strong SOPs and work instructions to ensure that your teams can operate efficiently.
These allow you to control the flow of products and how they come in. By creating the standards for your teams, you can more easily navigate your non-controllables.
SOPs should be broad, easy to read, and ready to present to regulators. Work instructions should be detailed, include pictures, and outline clear objectives for your team at the dispensary. Work instructions should be the details you don't include in your SOPs.
Keeping these two items separate allows you to be nimbler and change your operations without unnecessary back and forth with state regulators.
The Key is Communication & Consistency
By creating these items upfront, you develop a workflow and process that allows your teams to function without having additional problem solving.
This will allow you to have better control on your flow of products, manage your days on hand more effectively, and allow your teams to process and act on products faster so they can focus on sales and supporting the customers.
Consistency is where more nuance and less control come into play. You are working with third-party vendors which means they will operate how they see fit.
The two major things to look for from third-party vendors are: quality and availability.
Not all vendors are created equal which means some vendors are reliable for support while others might not be. Controlling your processes lets you navigate varied quality and availability between vendors more easily.
Your teams will become reliant on some products to deliver the best customer experience. Even with the recreational side of this business, there are plenty of people who rely on certain products as medicine.
Having clear operational standards helps you hold vendors accountable and educate your staff on expectations for quality or availability issues.
Communication is the key factor in ensuring your teams are set up for success.
The largest problem for a lot of dispensaries is standardization. Teams do not know what to do when things change or are not defined. If you can solve this problem for your teams, you can set your dispensary up for long term success.
More Tips to Consider Before Buying Products
We briefly discussed the difference between SOP’s and work instructions, but the other thing to add into that is checklists and defined space. Your SOPs can be seen as the lines in a coloring book.
They should be defined by the regulations and give you a broad understanding of what should be happening. The real magic is with work instructions, checklists, and defined workspaces.
By preemptively setting your teams up with digestible and simple ways of working, you can combat the 5 categories we discussed above.
There are a few tips and tricks you can do to make this even easier on your teams. As with everything in the cannabis industry, being confident in compliance ensures your teams are successful and your operations are clear.
Cannabis is still often a cash business. This means not every vendor will have terms and often payment is expected upfront. Ensure finance, buying, and dispensaries have a clear line of communication.
Define your CRM and have rigorous accountability and standards in how you approve, confirm, and process invoices.
Turnaround time on an order is often up to the vendor's capacity, meaning you can wind up with deliveries during your highest customer volume times.
Create standards with your vendors and staff. Create a standard day for delivery with each vendor or a calendar where vendors set up days to deliver products.
Ensure your teams are fully aware of the intake process and have standardized space to move products through the building.
Vendors are still working on CPG so items will come in boxes of all shapes and sizes. Every product should have a standard for how it's handled.
Some vendors have efficiently packaged CPG while others send it in a box and expect you to figure it out. By creating a standard for every order, your teams can quickly define where these items live and how they are tracked.
You will find some vendors have products that are always available at the same quality, while others’ products fluctuate greatly. This is where tools and having a standard for your buying team come into place.
There are countless ways to create or outsource your ability to track and manage your inventory. Have a clear data pipeline for managing how much product is coming in, how quickly it's moving, and how often you need to re-order.
A good rule of thumb is to turn over all products in the store every 30 days.
Not all vendors have the best products and testing does not give you the entire story. Quality assurance is a vital part of the operations aspect of the business. Education!
The best way to combat inconsistent quality is education. Give your teams a chance to try products, encourage vendors to educate your staff, and make sure they know what they are talking about!
When you take the time to set your teams up for success, when you give them an answer to problems and empower them to feel confident to make judgment calls, process products, and help your customers without having to wonder if they are doing the right thing.
As the leader you have the power to control and effect every one of these aspects in your store.
Purchasing products for your cannabis dispensary should be exciting. This is your chance to define what type of dispensary you are, who you are trying to help in the market, and the nuts and bolts behind your dispensary operations.
If you can begin by understanding what you can and can’t control, you can define the work for yourself more clearly. Setting clearly-defined standards allows your teams to think less and execute more.
Andrew Zaferis is a former Retail Director for Cresco and General Manager of Native Roots. Follow him on LinkedIn. Like this post? Book a demo with Happy Cabbage to learn how our tool Dawnstar can help you reduce SKUs and know what to buy.