How Does a Cannabis POS Help with Inventory Management

Treez Team

Do you have a cannabis dispensary business and maintain your inventory in an Excel sheet? If yes, can you tell us how confident you’re with the data entered every day around the products you sold, the inventory remaining and the items you will need in the next few days? 

Studies have found that businesses lose 30% of their revenue because of wrong data, which accounts for almost $14.2 million annually. 

In the case of a cannabis business, wrong data can also result in not being able to meet consumer demand. And in worse scenarios, run into compliance issues with the state that can halt your business altogether! 

Now what if we said that a cannabis POS can also help you with better inventory management and not just ringing up sales. 

In this blog, we explore how a good cannabis POS like Sell Treez helps with efficient inventory management. 

What is cannabis POS and inventory management software? 

Cannabis point of sale (POS) software is a computer application that combines hardware and software to help you streamline the sales and commerce process. The best point of sale software will enable cannabis dispensaries and retailers to record their sales, product catalogs, discounts, and keep track of the inventory on a day to day level without much manual intervention. 

We’re going to look into the inventory management role a cannabis POS plays in detail below. But let’s start from the basics. 

What are the benefits of inventory management? 

When you have a structured excel sheet to maintain records, why consider a cannabis POS for inventory management? Let’s take a look at some of the benefits of efficient inventory management for cannabis dispensaries and retailers: 

  • Meet consumer demand - When your inventory is well-managed, you’ll be able to serve your customers better. From being able to restock popular products on time to predicting the need for new products, better inventory management leads to understanding consumer demand more proactively. This gives you the chance to not just acquire more customers, but ensure they return for more as well. 
  • Better cash flow - Since you manage your inventory well, you are less likely to have dead stock that can result in losing product costs and the cost of holding/ storing them. It also helps bring in a data-driven approach to investing in new stock, which assists in better cash flow. 
  • Lesser errors - As your dispensary or retail business grows, relying on manual data entry can result in errors. These errors have an impact on both the ability to make informed business decisions and being in compliance to run your cannabis entity. 

Common inventory management strategies for cannabis dispensaries and retailers  

Cannabis is a perishable product, and managing inventory is crucial because once a product's shelf life expires, you can't sell it. So cannabis dispensary retail managers follow various inventory management strategies to keep the products moving. 

Here are some common inventory management strategies that most of them follow: 

First-in, First-out (FIFO)

This is one of the best strategies that work well for dispensaries. In this strategy, you focus on selling products sitting on the shelf for the longest to sell them out before the expiration date. This way you can minimize wastage and improve cash flow.

  1. Just in time (JIT)
    This strategy works well for large dispensaries. It focuses on the dispensary’s ability to reduce the quantity of company equity sitting in dead stock (excess inventory that is no longer wanted or needed by a company). While it can help reduce holding costs, this strategy requires accurate forecasting to prevent stockouts, which is possible if you make use of a cannabis POS that can track sellable velocity - a metric that measures how quickly a product moves when available to be sold. 
  2. Last-in, first-out (LIFO)
    This strategy suggests selling out the product that has come last in the inventory. While this strategy may work for non-perishable items, it doesn't stand fit for cannabis dispensaries, which is a perishable product.
  3. Last-in, first-out (LIFO)
    This strategy suggests selling out the product that has come last in the inventory. While this strategy may work for non-perishable items, it doesn't stand fit for cannabis dispensaries, which is a perishable product.

How does cannabis POS help with inventory management?

A good cannabis POS usually has various modules and features that can help with efficient inventory management: 

  1. Sales and inventory data 
    An intelligent cannabis POS system like SellTreez will provide you with consolidated sales and inventory data. This allows you to implement the best inventory management strategy, set replenishment workflows and also calculate gross margin improvement over a period of time. This helps cannabis dispensaries and retailers optimize their cash flow.  
  2. Print labels
    A cannabis POS system comes in handy when you need to print labels. A POS system like Treez lets you select the size and print as many labels as you need in one go. You can stick the labels to any of your inventory items.
  3. Split batches
    If you need to act on a section of the batch, not the entire batch, you must split the stock into batches. A cannabis dispensary POS system lets you do just that. You can split one batch at a time by either distributing the products in equal numbers automatically or manually. After splitting the batches, the new batch will have separate lines in the inventory control.
  4. Merge batches
    If you want to combine a number of small batches, a POS system lets you merge the batches with an easy module. You can set the batches you want to merge with various conditions by clicking the merge button.
  5. Destroy inventory
    If you need to remove an inventory, you can do so by selecting each product and the reason for destruction. A POS system comes with some default destruction reasons, or you can input them manually. 
  6. Return inventory
    Need to return stock? Update it in real-time in your POS system in a few clicks. A cannabis POS inventory management system helps you easily return stock and update the record. You can return the whole batch or segregate it into small batches and return a selected few. 
  7. Move inventory
    With a smart cannabis POS, you can quickly move products to a new location. Move as many batches as you want — either the entire batch or a part of it with only a couple of clicks.
  8. Filter, search, and sort
    This is one of the most valuable features of a cannabis POS in dispensary inventory management. The feature helps you search and filter products by brand or name. It allows you to quickly gain an insight into how many products you have in stock and which ones you’re running low in stock. 
  9. Inventory card
    An inventory card feature helps you to find out additional information about the selected product, like batch details, package details, cost of the product, etc.

Recommended reads: 


Cannabis POS systems are usually considered as a solution to simplify taking and recording sales. But the truth is, that a good POS will always help bring together different functions of a cannabis business - including inventory management. 

This is why we built SellTreez POS to be an enterprise grade solution for cannabis dispensaries and retailers. The intelligent POS system of Treez lets you manage stock, identity and replace fast selling items quickly, reduce deadstock and loss, and streamline your dispensary operations from one dashboard. 

More articles