Standard Operating Procedures (SOPs) for Dispensaries
By Green Bits
Standard operating procedures, or SOPs, are the processes that keep your business running smoothly. Writing these procedures down and standardizing them is typically the first step in training your employees. This allows your employees to focus on specific aspects of the business as they stock product or register customers. If your employees do their tasks outlined in the SOPs well, they help the whole business function efficiently.
Developing SOPs is an integral part of running your business. Based on your business model, your goals, and the customer experience you want to deliver, how do you break everyday tasks down into a set of repeatable processes that employees can execute?
For a cannabis store, there are several processes involved in delivering the customer experience you want. If you’re a customer-driven company you must approach your business from your customers’ point of view.
How do people check in? How do they get into a queue? How do you sell them the products? How do you choose what products to carry? How do you fulfill those orders? These are all part of one very important core process centered around how your staff interacts with customers.
You want the customer experience running smoothly and efficiently all the time. You can measure this by looking at the average time a customer spends in the store. You can also ask customers: How happy were you after you made your purchase and left the store? Did you find the products you wanted? How did your budtender contribute to your experience?
These are customer-driven questions that can point toward how certain processes are aiding or hurting your business. How you achieve those goals is where standard operating procedures come in.
At check-in, you swipe someone’s ID. If they’re 21, you direct them into the store. That’s an example of the first basic standard operating procedure in relation to check-in and registration.
Processes that need well-defined SOPs include:
Imagine you order a product and when you go to pick it up, the store doesn’t have it. Inventory is a back-office process that ensures that a store never runs out of a product, such as Lemon Haze. It’s important to always monitor inventory levels and the speed at which a product is purchased and replaced. Other core processes related to inventory are purchasing, auditing, and restocking shelves so that employees can do their jobs easily.
If you order loose flower, you might need to repackage it into joints or small packages to put on the shelf. You want this process to be standardized to reduce errors and ensure everything is tracked according to state regulations.
Accounting and Overhead
Good record keeping is essential. SOPs for accounting include filing taxes appropriately, keeping tabs on revenue to inform decisions, and oversight over cash or inventory theft (if that’s an issue).
A large aspect of accounting and finance is making sure you collect the right amount of taxes. You need to keep track of all the taxes collected and keep accurate records of how much money is being made after adjusting for taxes.
Breaking Out Roles
Typically, SOPs are very specific and they vary from role to role. For example, in receiving orders, there should be a clear set of procedures an inventory manager must follow.
With Green Bits, a dispensary employee must first find the open purchase order, assign it to the product, and then make sure costs are in. The employee then makes sure the purchase order matches what was delivered and count the physical inventory in the system. This is all documented so employees can follow and repeat the operating procedures in the same way.
Each role at every level has a specific set of SOPs; however, several roles can be done by the same person. You might encounter this in very small dispensaries where the owner is the budtender and also manages inventory. The owner is likely doing the accounting and purchasing too. As a business grows, roles should get divided out and specialized. In a store that’s at scale—like one that’s doing $3 million a month in sales—purchasing is a full-time job. Instead of having an inventory person doing the purchasing, receiving, auditing, and restocking, these roles are broken out so that each role can be done well and with extreme attention to detail, which is key in the cannabis industry because of seed-to-sale tracking.
SOPs are the building blocks of higher-level systems and are necessary to business success. All procedures need to be adequately evaluated. For example, in order to evaluate receiving, a store needs to confirm that all products are counted accurately, labeled properly, and stocked in a way that facilitates easy auditing.
You should ask: How long does it take to accomplish a specific task? Are the quality metrics high? Does it achieve our business objectives?
What you want in an SOP is to make it as simple as possible so that operations are fast, consistent, and of high quality. Avoid SOPs that are extremely complicated because they may actually make it too difficult to train people. An SOP that leaves too many decisions up to the individual can also be an issue. If you leave it up to individuals to make decisions, the day-to-day operation may not be very consistent. This becomes exceptionally important in the administrative and finance realms. In summary, be sure to implement SOPs that enable you to have operations that are fast, consistent, and of high quality.
Lastly, when you’re designing these systems, ensure the standard operating procedures address top-line business needs. Sideline systems need to have enough hooks into these SOPs so that other systems, such as administrative and finance, can run effectively and build feedback loops.