16 min read
Must-Have Technology Solutions for Dispensaries
Over the past few years, the cannabis market has expanded enormously, going beyond the traditional brick-and-mortar dispensary. To satisfy the increasing customer demands, this industry has managed to soar by expanding its technology space, becoming known as cannatech. The term encompasses all tech-enabled and data management services that modernize customer experience, expand product reach, and allow customers and producers to comply with all cannabis laws and regulations.
IT services have played a big role in the marijuana business, providing solutions to reach a wider customer base and develop a superior shopping experience on par with traditional retail. From online sales to fast deliveries to enhanced in-store shopping, dispensaries are setting up for success by adopting tools and technologies that best fit their business needs. Each tool has specific features and functionalities, which are worth discussing in more detail.
What Is a Cannabis Software Tech Stack?
The term tech stack indicates all technologies, tools and software used by a dispensary to carry out its operations. Each cannabis business has its own tech stack, where each tool is interconnected with the others to form a cohesive ecosystem. For instance, by integrating online menus with your Point Of Sale, you will be able to update your inventory automatically, without entering any manual data after each sale.
A successful cannabis tech stack is one where all tools work together to provide the best customer experience – from seed-to-sale to FMS to ERP. As your cannabis business grows, so should your tech tools. It is important to select software that will help you improve your services and keep your transactions in order while staying compliant with state regulations.
When dealing with the cannabis market, one must reckon with all local and state laws. Each state has its own rules on cannabis usage and possession, which adds a new layer of complexity to the whole business model. It is also crucial to pay attention to the different requirements between medical and recreational marijuana – some states allow the former but prohibit the latter. As a result, the business needs point-of-sale (POS) that monitors the evolving regulatory landscape of the cannabis industry.
One way to keep track of the manufacturing, production, distribution, and sale of cannabis products is through a state-mandated software called Metrc (Marijuana Enforcement Tracking Reporting & Compliance). This platform traces all cannabis business operations, ensuring that there is no breach of law and that all dispensaries comply with the proper regulations.
Metrc does not only track businesses, but the products as well. All marijuana items must be properly tagged and labeled, distinguishing between those meant for medical patients and those for recreational users. The best way to update Metrc’s track-and-trace system is to link it to the main point-of-sale (POS). Aside from Metrc, states may prefer other third-party software such as BioTrackTHC or MJ Freeway.
Point of Sale
The Point of Sale is more than just a digital cash registry – it is the center of your dispensary and the heart of your business. With a POS, you can quickly update your inventory list as you sell, manage your transactions in real-time, and ensure that all business operations comply with local and state cannabis regulations. There are 6 main POS options: IndicaOnline, Green Bits, Flowhub, Treez, Cova Software, and Meadow.
Using a POS does not only benefit the business from a technical point of view, but it also enhances customer experience – if all sales operations run smoothly, customers will consider your dispensary trustworthy and competent. Choosing the right POS is crucial for a successful performance, though each system varies depending on the needs of each dispensary. Just like budtenders are an important point of contact with customers, a reliable POS system will successfully integrate all your technology tools, improving business performance and boosting sales.
POS systems must also automatically report the data to Metrc through the use of metrics API, making them a critical part of the cannabis dispensaries. This allows business owners to track their inventory catalog while making sure all products are sold according to state rules.
Backup Internet Services
To businesses, a fast internet connection is like oxygen – they cannot progress without it. Cannabis dispensaries are no different, especially if they use cloud-based software for their transactions. But the internet has one big caveat: it may go down unexpectedly. Backup internet service is the best solution against loss of data or damage to the applications in case of an internet outage. You can either use a mobile hotspot or buy another line as a backup.
No connection can be effective 100 percent of the time, so being prepared is essential. Indica offers an OFFLINE feature where the dispensary POS system can still process transactions while offline. This will allow the business to continue as usual: employees can adjust the inventory in real-time, process walk-in orders and payments even in the absence of the Internet.
Having a delivery service is a crucial part of any marijuana business – it boosts sales and gives customers a more relaxing shopping experience. Just like any cannabis-related operation, compliance is critical, even during the delivery process, especially since each state’s requirements may differ. For instance, cannabis deliveries within the state of California must be made in unmarked vehicles where only the driver is allowed to enter.
By keeping deliveries on schedule, a business maintains a positive and continuous relationship with customers over time. This is the case of many delivery apps, which provide specialized services to meet the market demands:
Through the IndicaOnline delivery app, drivers can accept new orders, access customer’s information, and process paperless transactions fast directly from their mobile devices.
Many know it as “the Uber of marijuana” for its popular cannabis delivery services throughout California. Their service is aimed at dispensaries and licensed retailers.
This app ensures cannabis delivery is efficient and hassle-free. It also offers great inventory management features ensuring all operations are up-to-date and that the business remains compliant with state regulations.
Over the last few years, e-commerce has become an essential tool for the success of small and large businesses, as consumers feel more comfortable with shopping online. To meet the new market needs, cannabis dispensaries are slowly shifting to online product sales, including online ordering, delivery and pickup options, and fast payments. Potify and Weedmaps are among the most popular providers of medical and recreational marijuana. Consumers can either walk into one of their brick-and-mortar locations or order their products online directly from dispensaries. Other popular e-commerce options are Dutchie, Leafly, Olla, and Leafbuyer.
Shopping for marijuana online has its advantages.
- You can check the most up-to-date price information for cannabis products
- Wide variety of product search
- Better dispensary visibility
- Customer specials and deals
- Contactless transactions
- Reduced waiting times
Although e-commerce provides a comfortable shopping experience, things may still be complicated when it comes to cannabis purchases. In particular, two main issues are worth mentioning:
- Payments: many dispensaries do not accept online transactions, which usually occur via certified apps authorized to accept CBD and THC sales, or by cash.
- Delivery: Shipping marijuana items across state borders is highly problematic, as many states are still not allowing the use of recreational cannabis. Each step of the delivery process must be recorded and tracked from the moment the product leaves the dispensary until it is delivered to the consumer.
HR and Payroll
Software platforms are the most effective solution to employee payment and tax filing. In the case of marijuana businesses, it is best to use cannabis-friendly software to avoid any legal or logistical troubles over time. These platforms help with many HR and payroll functions such as:
- Employee scheduling
- Time-off requests
- Benefits management
- Filing federal, state, and local payroll taxes
- Managing hiring and applicant tracking
4 main dispensary software solutions improve HR and Payroll operations: Gusto, Vangst – focused on recruiting, Greenhouse – focused on recruiting and applicant tracking, and Wurk.
Business protection is a must for cannabis markets, especially in states where marijuana is only partially legalized. In 2017, Marijuana Business Magazine estimated that dispensaries spent between $30,000 and $40,000 on their security systems, while cultivators spent up to $100,000 to protect their production. Dispensary security systems include the following features:
- Monitoring of building exterior and interior
- Customer and employee protection
- Inventory protection
- Secured access
- Theft detection
Protecting brick-and-mortar locations is not enough – cannabis businesses must also prevent any data deletion or fraudulent transactions from hackers. Marijuana businesses are an easy target of cyber-attacks, which may involve installing malware on POS terminals, phishing, or accessing unsecured Wi-Fi networks. For this reason, IT systems must be watched very carefully, just like a business owner would keep track of its operation or cannabis inventory. Constant monitoring will prevent new attacks from unwanted ransomware.
Keeping the books in order is crucial for any business. An accounting dispensary software helps cannabis businesses with managing cash flows, tracking outstanding invoices, and creating P&Ls and balance sheets much faster. FreshBooks, QuickBooks, Wave Accounting, and Xero are the four most popular accounting tools on the market, and they provide businesses with a wide variety of features:
- Sending invoices to clients and vendors (receivables)
- Recording payments made to vendors (payables)
- Expense tracking and reconciliation
- Simplified financial reporting
- Sending purchase orders
- Ensuring tax compliance
Marijuana dispensaries opt for inventory management to monitor all merchandise movements – transfers, sales and restock, and to make sure all supply information is always up to date. The most comprehensive inventory management systems do not only monitor product levels but also integrate POS solutions to maintain compliance with state regulations while offering a user-friendly platform and fast payments.
IndicaOnline’s inventory system is cloud-based. It includes a user-friendly interface that allows for easy tracking of all inventories, both consumable and non-consumable items, as well as managing all vendors’ profiles.
FloEnvy records every step of the cannabis production and distribution process – from labor efficiency management to logging cultivation variables. This system also generates data on cost savings, cycle management, and work schedule.
It is excellent for both cannabis retailers and wholesalers. Its platform is very comprehensive, including multiple services from inventory management to POS analytics to state reporting and compliance.
Flowhub’s inventory system focuses on profitability and compliance. Its auditing app monitors dispensary automated reporting, and updates locations in real-time. Flowhub makes it easier to scan barcodes, locate inventory discrepancies and manage the entire supply chain – all from one centralized platform.
Mobile apps are another efficient solution for any business that is looking to use technology to expand its client base, and they have played a big role in enhancing the cannabis market on a larger scale. The Covid-19 pandemic shifted businesses upside down, so much so that they were forced to change their entire strategy. Cannabis business owners took advantage of the long lockdowns to improve their mobile applications, allowing curbside pick-ups and deliveries directly from the customers’ mobile phones, without the need to walk into a dispensary. Together with IndicaOnline, other apps worth mentioning are WeedMaps, Leafly, and Canix.
The mobile app integrates well with POS and allows full control of the delivery process by activating its Dispatcher Mode. This reduces the chances of delivery delays, ensures accurate order information, and allows the user to monitor the entire delivery process from start to finish.
One of the app’s main functions is alerting users to their closest cannabis dispensary based on where they are located.
Users like this app because they can retrieve all the information they need from other users’ reviews. This app provides information on cannabis strains to help users choose the strain that is best for them.
This seed-to-sale platform is used by manufacturers and distributors to track sales, inventory and yield reporting. It also integrates with Metrc, RFID scanners, and QuickBooks online – it is well known for being a very comprehensive ERP system.
Customer Data & Privacy Issues
Customer data privacy is often the subject of debate in the business sector, but when it relates to the cannabis and healthcare industry, the matter gets more complicated. While all businesses are responsible for the protection of sensitive consumer information, many do not include it in their list of priorities, and others do not even consider it a risk at all. Collecting sensitive customer information gives dispensaries the responsibility to safeguard and protect their patients’ data.
The cannabis industry is not immune to privacy violations, as demonstrated by past security breaches such as MJ Freeway and THSuite. To enforce their data security system, dispensaries collaborate with POS and CRM/loyalty partners, ensuring that the exchange of data between their point-of-sale and state reporting is secure. Data privacy is part of a company’s due diligence, so it is important to be cautious and sensitive to the matter of data privacy, especially when it relates to an evolving industry such as the cannabis one.
CRM and Loyalty
Building solid customer relationships allows your business to enhance its reputation and increase market share. This also applies to the cannabis industry. Integrating Customer Relationship Management (CRM) solutions allows dispensaries to analyze customer behaviors, purchasing habits and outline the best marketing strategies to boost sales. IndicaOnline, Sprout, and Springbig are two of the most popular CRM options for the cannabis industry. They are well known for using CRM strategies to develop brand awareness and use mobile platforms to engage with their customers.
Just like CRM solutions offer powerful insight into consumer behavior and sales trends, loyalty programs help retail businesses build up their brand and increase affinity with their customers. Loyalty programs can highly benefit the marijuana business, especially given that more and more dispensaries are opened each day, increasing competition and, with it, the desire for customer retention and brand recognition.
Digital Signage and Menus
Digital signages and menus are very important for a successful customer experience. They both allow the customer to feel more “at home” when entering a cannabis dispensary, and to learn more about the products. Menus are a chance to showcase the dispensary’s product line, though they need to be constantly updated, especially when a product is out of stock.
According to recent statistics, the bright colors of digital media are more impactful than the static images of static menus or chalkboards. For this reason, cannabis dispensaries are adopting digital signs to promote their products or limited-time discounts. The moving visuals of digital screens catch the attention of the viewer from first sight, leading them towards learning more about the store’s inventory. Some of the most popular digital signage for dispensaries are GreenScreens, Enlighten, Divvy Digital, and Ping HD.
One of the advantages of POS systems is that they allow collecting data on any aspect of the business, from sales trends to customer preferences to seed-to-sale information. All of this helps dispensaries make data-driven decisions to grow their business and improve financial performance.
Cannabis industry analytics is fundamental for the business, especially when dispensaries are looking to expand their customer base and beat the competition. Four dispensary analytics solutions are worth mentioning: Headset, Greendata.ai, Cannabis Big Data, and BDS Analytics. In particular, BDS uses data from the dispensary’s POS to research consumer habits, market share, and where the dispensary stands in terms of revenue and finances.
As per State regulations, marijuana dispensaries are required to leverage RFID technology to track each plant they grow. Radio Frequency Identification (RFID) is an advanced labeling system to identify and track items using radiofrequency. Each time a plant is harvested, it needs to be updated within the RFID records. This ensures compliance with state production laws, and it keeps all production numbers accurate.
As the marijuana industry expands, so does its demand. Once tags have been applied to all the plants across the grow house, the RFID will update the main inventory. Individual tags also facilitate the reading of information for each plant. Since these smart labels can store a wide range of data, implementing this technology will not only maintain an accurate stock count of each plant but will also save time on manual counts, reducing expenses.
Kiosks allow customers to obtain more information about certain products and eventually decide whether to purchase them or not. Some kiosks may be simply educational, while others are more focused on increasing sales. Due to the sharp expansion of the cannabis business, the structure of kiosks is sliding away from the traditional retail-based stand, and slowly turning into a self-service digital experience.
A market analysis conducted by popular retail sectors has shown that customers are more attracted to buy off of a digital kiosk than a conventional one. Digital, self-service kiosks do reduce wait times, they offer a user-friendly touchscreen configuration, and allow customers to browse the entire product line in real-time. When applied to the cannabis business, these features contribute to maximizing the overall buying experience and customer satisfaction.
When it comes to cannabis dispensaries, IT Support is not only limited to the moving hardware – laptops, servers, and desktops, but also to the intricate net of business and customer data stored within its systems. Record Keeping, Inventories, POS Systems, and Mobile Apps are only a few of the many technology tools that sustain your cannabis dispensary. Without appropriate IT support, all these tools would be at risk of damage, loss, or worse, cyber-attacks.
Just like all the hardware must be properly maintained and upgraded, dispensaries’ online operations must also be safeguarded against hacking and ransomware. Preventive IT operations will also make data less vulnerable to attacks and ensure all information is cloud-protected and backed up periodically.
Smart scales are the ultimate tool for accurate cannabis compliance. During harvesting and production, maintaining an accurate record of each plant is essential to make sure all State regulations are met. This technology solution is a time-saver, as it makes inventory tracking and altering much easier and faster. To ensure its information is accurate and fully compliant, dispensary scales must be of a specific type, a National Type Evaluation Program (NTEP) category.
The cannabis industry is quickly expanding throughout the US, as more states legalize marijuana consumption and adopt new technological solutions to expand the business and deliver exceptional customer service. Cannabis market sales are projected to reach $97 billion by 2026, placing cannabis into a more prominent position on a global scale.
Implementing technology solutions will help dispensaries meet new consumer demands. Providing excellent customer service, tailor-made shopping experiences, and immediate product availability are only a few of the goals that, once attained, will bring the cannabis business to a whole new level.