Fundamentals of Receiving and Organizing Inventory
By Green Bits
Understanding the fundamentals of how to receive and organize inventory at a dispensary is essential to staying compliant. In this article, we cover what goes into receiving inventory and what to look out for. We also recommend ways to organize and manage your physical inventory to stay compliant and ensure you don't sell any expired products to customers.
As you are likely aware, once a dispensary accepts product from a supplier, the dispensary is now legally responsible for that inventory. If a state enforcement agent comes in, the dispensary has to prove that the cannabis received is there, that it was purchased legally, and that they have accurate records of it. Needless to say, it’s crucial that counts of product coming in are accurate. Responsibility is transferred to the dispensary, and it’s measured by tracking numbers down to the batch number or plant.
When you receive a product, you are recording which batch or plant numbers you received. Sometimes you might order a pound of Strawberry Cough and half of that pound shows up from one plant and the other half from another. That pound will be two separate line items on the manifest. Be sure to record this when you reconcile it. You’ll go into the state traceability system and mark that you received the product and how much you received. You are then legally responsible for that amount. In certain states, suppliers won’t have labeling or test results on products. Dispensaries will have to label these themselves and provide barcodes to track it.
Next, a dispensary will want to make sure all their menus are up to date. The moment a product is received, it should appear in the online inventory, in-store menus, and any printed materials. This can get a little complicated when a dispensary can carry 300+ products that rotate seasonally.
Everything must be accurately measured and recorded to ensure nothing is over-dispensed at the registers. This can easily take a couple of hours a day. However, software can take care of the complex tasks of the tracking and labeling. For example, Green Bits integrates directly into the state system (Metrc, BioTrackTHC, and Leaf Data Systems) to report and track inventory, which makes enforcing transaction limits easy at the register.
When tracking inventory, the best practice is first in, first out, or FIFO. This practice ensures product freshness.
For example, let’s say your store is selling eighths of OG Kush. You ordered 100 units two weeks ago, and the week before that you ordered another 100 units. FIFO means that you place the newer items behind older items to make sure you clear older items first. The first products that came into your store are the first ones to go out. All stocking procedures should follow this rule.
If you don’t have software and are trying to manage traceability manually, you might want to group items together by state tracking numbers. You could organize by plant number and batch number and sell through those specific numbers before restocking another one. Typically, state tracking numbers will follow FIFO anyway, and this makes inventory easier to audit manually.
Lastly, inventory will usually be grouped in physical rooms, so if there are multiple rooms in a store’s inventory, your system should also track those rooms. This is particularly important for stores that are quite busy. Usually there is stock in both the front and the back of the store. Have someone check product levels and restock items that are running low. That same person should also record what is being moved and where.