It’s hard to think of a market developing and budding as rapidly as the recreational cannabis industry. In fact, Forbes recently reported that legal marijuana sales skyrocketed in 2016, amassing $6.7 billion in total revenue – a 30% increase in year-over year sales in the U.S. and Canada.* If you’re a cannabis retail store owner, the challenge is streamlining your store operations so you can scale alongside an ever growing wave of demand.
In 2017, the only way to efficiently, accurately, and securely scale is through implementing marijuana software for POS, back office, and state compliance reporting.
Since margins can be thin on product and finding the right pricing strategy often takes time, it’s easy to justify spending less on technology for your store. However, entrusting your compliance management process to an individual can be risky, even if they are skilled. Minor (human) errors can end up exposing your business to penalties by skewing data reported to the state.
Having listened to the challenges of countless store owners, we documented three common myths that need to be exposed.
MYTH #1: COMPLIANCE LAWS
“Our store is always ahead of the curve when it comes to compliance laws. Anytime a process needs to be changed, our compliance manager is on top of it!”
A recent survey of recreational cannabis retail stores in Washington tells all: 20% of retail stores in the state have run into a major compliance issue. At the top of the list remains the often overlooked, but closely monitored issue of selling to minors.^ And the list goes on: transaction limits, inventory tracking, and cash management are just a few of the continual offenses cited by the state.
While compliance managers often carry the task of keeping all store processes above board, this is a complex and laborious endeavor. Statewide compliance bulletins and e-mail updates can increase the likelihood of success in this respect, but countless opportunities for error still exist. What is a store to do when the compliance manager is on vacation and fails to update the store on new transaction limits for a particular product? What safeguards are in place to make sure you don’t exceed the transaction limits for any given customer?
Instead of keeping paper records of this information, marijuana software allows for all products to be traced from seed through to the point-of-sale system at the store from which it’s purchased.
MYTH #2: TRACKING SALES
“For years, we’ve kept sales records by hand with a pen, paper, and calculator the old fashion way. It’s got us this far!”
Last year, the state of Oregon ruled that recreational marijuana retailers are required to track sales, packages, transfers, plants and harvests, among other functions.** Not long after, marijuana software point-of-sale platforms were also approved of as a viable method of tracking cannabis sales.
But old habits die hard. Nearly 9 months later, “a significant percentage of retail stores continue to track sales by hand, turning a majority of dispensary employees into data entry clerks,” as one marijuana business executive put it.^^ Government regulations have become so granular and specific that even the most skilled, well-trained employees are inevitably limited in their effectiveness.
On the other hand, compliance-focused point-of-sale systems can ensure that proper taxes are calculated on every purchase and error-free sales reports are generated. – Even more directly valuable to the day-to-day operations of the store is the time and cost saved via a POS system.
MYTH #3: PRODUCT DISCOUNTS
“At the beginning of each week, I brief my staff about discounts our store is running, and we adjust prices during transactions. I’m sure there’s got to be a better way… But it’s what the team is used to.”
If your store is paying attention to sales trends, you’re aware that frequent discounts are a necessary part of generating traffic to your store. With the introduction of digital tools such as Weedmaps, customers can find discounts and deals any day of the week based on their location.
What’s most consuming about store discounts is not determining the strategy, but executing on it. Using a POS system optimized for automatic discounts can sometimes cut checkout times from as much as 5 minutes down to a minute or so. Add that up per day, per week, per month, etc, and the cost savings become hard to ignore.