Cannabis Technology Vendors: What To Look For & When to Talk

Cannabis Tech Vendors: A Key Piece to Your Retail Success

Technology is one of the foundational aspects of opening and running a cannabis dispensary. There are many purpose-built solutions for different aspects of managing a cannabis store, including:

• Point of Sale (POS)
• inventory management
• Security
• Human resources (HR)
• Ecommerce
• Loyalty
• Payroll

The cannabis industry is a very unique retail space because it’s heavily regulated. This makes it best for cannabis dispensaries to work with vendors that are built specifically for the cannabis industry as these vendors should understand everything you need to for compliance.

 

The 4 Fundamental Technologies to Open a Dispensary

Not every technology solution is critical for a cannabis retailer. Every business case is unique and retailers need technologies that make meaningful contributions to their success—no business wants to be paying for, or bogged down by, technologies they don’t need. That said, there are technologies that are common among most successful cannabis retailers. Many retailers do more, for sure, but these are the four fundamental technologies you need:

1. POS system
2. Inventory management
3. Website, ecommerce and online menus
4. In-store menu boards and digital signage

As previously mentioned, it’s critical that each of these be a cannabis-specific solution, purpose-built for the cannabis industry. This will help your dispensary be more efficient and ensure you are compliant. 

When it comes to the four fundamental technologies, there are two that really stand apart as being the most important: POS systems and inventory management. Let’s dive into

 

What a Dispensary POS System Does

A cannabis POS system is the software that facilitates in-store sales. Obviously, being able to take payment from customers is important to your business so this technology is the single most important technology decision you will make (or any decision in your cannabis business, really).

The best cannabis POS solutions do more than simply ‘take payments,’ however. They help increase sales and make cannabis shoppers into loyal customers, by enabling your staff to provide store-wide compliant, quick and personalized shopping experiences. They are also easy to use since they’re designed to be intuitive.

 

How to Evaluate POS Vendors

When deciding which cannabis POS system to use for your dispensary, there are a number of considerations:

1) Capabilities:

What does the POS system do for your business beyond taking payment? Personalized shopping with customer insights—including purchase history and preferences, an easy-to-use user interface, inventory management tools, quick access to detailed product info to help your staff sell, and loyalty programs are some of the capabilities you should look for.

2) Compliance:

A cannabis POS solution should make compliance easy, fast and minimize the possibility of human error. Look for a POS that offers built-in ID scanners and age verification. They should be independently verified to follow best practices and standards for data security and the protection of personally identifiable information. 

3) Reputation:

Look for a cannabis POS system that is used by other retail brands that are comparable to yours, has a number of testimonials and can provide compelling case studies of success. 

4) Reliability:

As the cannabis retail industry is fairly new, dispensaries need to be aware of technology company’s longevity and track record. You do not want to choose a POS solution that goes out of business, or one that jeopardizes your business with frequent downtime. Search the vendor’s name along with keywords related to crashes, lawsuits, or other red flags you may want to avoid. 

5) Cost:

Like everything in your business, you have to balance wants and needs with cost. Be sure to consider not only upfront costs but the recurring monthly or transactional costs of a POS system and how that translates for your store.

6) Integrations:

Your cannabis POS should be able to enhance your entire retail ecosystem by integrating with other high quality software systems. It should enable your dispensary to seamlessly take your customers from online to in-store for browsing and purchasing. Integrations are so important, let’s look at them in a bit more detail.

 

The Importance of Software Integration

Integrations are important because it impacts compliance and customer experience by giving you the freedom to choose best-in-class solutions across your product needs. If you choose a world-class POS that integrates with Leafly, for example, to give real-time inventory management then you have two world-class solutions to elevate your cannabis retail brand. You should look for a POS that integrates with:

• Compliance: The first integration any cannabis-ready POS system must offer is an integration with your state or provincial traceability system like METRC and BioTrack for compliance. It’s worth noting, not all integrations are equal—look for a POS that has real-time 2-way syncing whenever possible, and consider one with built-in tools like traceability dashboards for added convenience.

• Online inventory management: If a customer looks online for a product and arrives at your store to purchase, that product better be available in store to provide a great customer experience. 

• Ecommerce solutions: By integrating your POS and your ecommerce, you seamlessly keep your product information up to date, you get combined data and analytics for your online and in-store shopping, providing you useful data you can use to boost revenue. SImply put, your POS system integrated with your ecommerce solution will reduce costs with increased efficiency and drive more sales. 

• Open API: There are always innovative new solutions on the horizon. A POS with mature, open API makes it easy for the best new software systems to integrate quickly, and makes it possible for you to have custom integrations built as your business grows.

 

When Should a Cannabis Retailer Evaluate POS Software Vendors?

Now that we know what to look for in a cannabis POS vendor, we need to know when the search should begin. Like so many things in business, the answer to this is as soon as possible. In some cases, like in New York State, you actually have to choose the POS technology as part of the cannabis license application process. But, even if it isn’t a formal requirement, you want to know which POS vendor you will be using before you submit your application as this will make your application stronger and provide you several competitive advantages.

 Competitive Advantages to Choosing Dispensary POS Software Early

Beyond making your application stronger, there are other significant advantages to researching and choosing your POS solution early, even if it isn’t mandatory. First, you can rely on the insight of your soon-to-be technology partner to assist you with compliance and inventory management right from the start with vendors who have a strong track record in onboarding and ongoing support. You and your team also learn to use the systems properly before your retail store has launched, meaning your store is much less likely to have issues (technical or human) at launch. In Canada, some savvy cannabis retailers have opened their doors while waiting for their license (which is a multi-step licensing and operational approval process), selling only cannabis accessories and merchandise to both promote their brand and learn the ins and outs of their software solutions. We are now starting to see CBD stores follow that same playbook.

Timeline for Getting Your Critical Cannabis Dispensary Technology Solutions

Your timeline can realistically start about six months to a year before your dispensary is fully open for business. It depends greatly on the licensing process and timelines in your market, and of course your strategy. ASAP is always the best approach, but here is a comfortable timeline that won’t leave you scrambling to put your tech to the test last minute:

 Six months before opening:

Thoroughly review your business plan to understand the technology you’ll need and the number of employees you’ll have. Begin vetting vendors who meet your criteria in the POS space.

 Five months before opening:

Work with your compliance team to ensure your security technology will work for your building plan, and consult with your chosen POS provider about recommendations and integration.

 Four months before opening:

Choose your ecommerce solution, especially if you are working with an agency to design a full website. You’ll want to start establishing an online presence early to build brand awareness.

 Three months before opening:

Select your hardware, and solutions like in-store apps, kiosks or menu boards. Your POS provider will be integral in making recommendations and helping you ensure compatibility for a seamless experience.

 Two months before opening:

Select your HR software ahead of your final hiring round and give yourself time to learn the system you’ll be using for onboarding, payroll, and employee scheduling. Start creating Standard Operating Procedures as you decide on operational processes around your tech stack.

One month before opening:

Leave this time for testing, training and getting all your inventory and compliance setup.

 

The Right POS Solution is Key to a Successful Cannabis Dispensary

Technology is a critical tool for  any successful cannabis retailer. And perhaps the most critical technology is your cannabis POS system. When looking for a vendor, be sure to start the search as early as possible and take into consideration the key features and capabilities we covered in this article to best match the unique needs of your cannabis retail store. Cova Software is an industry leader in compliant solutions for cannabis retailers across North America, and can provide a free consultation or personalized demo of the award-winning Cova POS system.

Furthermore, Cova is a valued partner of the seasoned cannabis consulting team at Canna Advisors, contributing to our collective decades of knowledge helping clients win cannabis licenses. Contact us today to see how we can help you start and grow your business.