Going Beyond Inventory Audits

Ryan LewisUncategorized

Going beyond inventory audits

I’m sure that you or your employees do inventory audits through your point of sale system on a regular basis. But what happens when something doesn’t add up? Sadly, at many of the businesses I’ve worked with they simply adjust the inventory and think nothing of it. While small amounts of inventory shortages can be expected in almost any industry, in the cannabis industry there are two important differences. First, cannabis is a controlled substance and theft can be considered failure to track from seed to sale; and second, in almost every state with regulated sales, patients and customers aren’t allowed to handle product until the sale is complete. Basically, if your employees can’t manage your inventory, you could lose your business. What this usually means is that employees are either mis-ringing sales and missing some items, items are being miscounted during sales or inventory audits, or the option nobody wants to think about: theft.

Just how much do these inventory shortages cost?

I’ve seen shrink reports showing almost $25,000 in missing product over a twelve-month period! But don’t worry, there’s still hope. In a lot of cases, reducing these losses in the future is as simple as improving point-of-sale procedures and Budtender training. Check out the following tips for improving tracking within your dispensary:

If your employees are manually entering products by either selecting from a list of products or typing a product name, switch to scanning each product with a barcode scanner. Train your budtenders to keep unscanned product on one side, and scanned products on the other side of the scanner. This can help to keep them organized, and reduce losses due to entry errors.

Are your Budtenders weighing buds at the sales counter? While this practice is often seen as a boutique touch, it comes with a substantial cost. Just by weighing heavy alone, in a small store selling only 15lbs per month I’ve seen as much as $10,000 in lost sales, never mind the buds that roll onto the floor. Switching to prepackaged grams, eighths, and other increments can drastically reduce losses at the bud counter, and help to preserve the quality of the product as well.

Do you or your managers conduct follow-up investigations for discrepancies found during inventory audits? If not, you should create a procedure. For product overstock, reviewing inventory movements from the storage area to the sales floor should help identify most discrepancies. This process should also include reviewing any previous adjustments to ensure that the discrepancy isn’t a mistake, and may go as far as reviewing security footage and transactions for large discrepancies. If evidence of theft is discovered during the investigation, you must file a police report and notify the state authority of the theft. Be sure to keep a log of all inventory investigations, in case an inspector or investigator needs them.

If you have questions about establishing good point-of-sale practices or anything else for your canna-business, please contact us today!