Getting High-Tech: Technology for Cannabis Dispensaries

 
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Behind every retail industry you’ll find a growing number of technology platforms designed to improve efficiency. We’ve seen it all - customized text message campaigns, regulation compliant point of sale, white label apps, loyalty programs, text-to-order and more. Today we are seeing these systems make their way to the cannabis industry. And who would we be if we didn’t address the hottest new trend in retail…. your friendly neighborhood dispensary!

Now legal recreationally in 10 states and medically in 33, it was only a matter of time before tech companies started rolling out solutions for the dispensaries that have started popping up in your neighborhood. In some cities it feels like you’re walking into a coffee shop to order a latte - so why should the checkout process be any different?

The Stone-d Age: A History of Weed Dealers

Back in the day the dealer-buyer relationship consisted of texting secret code language to pick up or hand-deliver the goods. The technology behind buying and distributing the greens was pretty much as low-tech as it gets. 

Not only has the means of obtaining product changed, there are now more secure dispensary-specific point-of-sale systems. If you plan on opening a cannabis dispensary you likely need a system that also integrates a reliable scale to measure out the goods and a barcode scanner for products such as edibles, joints or oils that are pre-packaged by mass distributors. 

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Do U Take Paypal? Payment Processing for Cannabis Businesses

Visa, MasterCard, Discover, and American Express have forbidden marijuana payment processing on their networks since the sale of cannabis is illegal on a federal level; this leaves cannabis businesses struggling to process credit cards. Quick payment options such as Paypal, Venmo or Square may seem like an easy answer, however may be risking when it comes to reporting. There are of course loopholes around some of the grey-areas that can make credit-card processing possible, but at this point we are seeing most places stick to cash-only to avoid these risks.

Once the substance was legalized in a handful of states, new tech companies started investing in compliant point-of-sale systems for brick-and-mortar shops (even if that means cash only). Some of the most popular systems we’ve seen are Cova, Greenbits, and MJ Freeway. Each system has your typical POS features such as revenue tracking, collecting customer information, and loyalty programs - but with added industry-specific features such as scale and scanner integration, seed-to-sale reporting, and regulation compliance. By default cash is the only payment enabled, credit card processing is typically something that needs to be turned on and integrated with a third-party payment processor.

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Growing Revenue: Tracking Dispensary Sales and Customer Data

Keeping track of sales and reporting earnings is crucial to any business, especially when it comes to the regulations behind cannabis. Every state (even specific cities) that has legalized marijuana enforces different regulations and fees. Using a point-of-sale that accurately tracks these regulations is key to running a successful business and helps avoid closures or costly fees. GreenBits provides specific knowledge docs broken down by state, and can even prevent sales after reaching the state allowed limit. 

A detailed CRM (customer relationship management system) also helps maintain patient records for dispensaries operating medicinally. Baker or WebJoint claim to be industry-specific CRMs however, a new small-sized business may want to consider a more mainstream system where customized fields give more flexibility to your business. As long as your point-of-sale is tracking customer data you can be creative with how you engage your customers.

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Case Study: Three Brick-And-Mortar Marijuana Shops Using Retail Technology 

In many markets, cash still rules everything around marijuana, in that most banks and credit card processors are still operating what is technically a federally-illegal business. Two places where this is evident are Seattle’s Have A Heart, and Greenwolf, a funky little shop in LA’s Los Feliz neighborhood. We visited both these locations to learn more about how dispensaries are managing their transactions. We also stopped by Med Men in LA, which to our surprise, was able to accept credit and debit cards.

Have A Heart has a welcoming, old-school coffee house vibe with a door that opens right into the retail shop.  A greeter checks a visitor’s ID, and then the shopper is able to locate a weedtender on the sales floor and ask questions or just select products. The weedtender takes the purchases to the cash wrap, at which point a cashless shopper needs to visit the ATM onsite. This prevents the shop from having to deal with federal regulatory issues regarding credit card payments (and paying an average of 2.5%+ in fees), plus gives them a few extra bucks from the ATM fees. For point-of-sale, Have A Heart uses Greenbits, a cloud-based “seed-to-sale” system that allows for tracking of flower sold in a shop back to where it was grown, and allows for the same kind of traceability features desired by food manufacturers and pharmaceutical companies.

Greenwolf in Los Angeles, comes off as a bit more of a sequestered headshop with an edgier entry process. Tucked in the courtyard of what looks like a nearly abandoned apartment building (think “post-apocalyptic Melrose Place”) shoppers find their way in through a waiting room area where ID’s are checked and security staff flex to discourage any potential nonsense. Once inside, it’s a small, nondescript but well-lit retail space that could just as easily be selling a small selection of jewelry, or effects pedals, or family-reunion merchandise. The weedtenders expect that shoppers already know what they are looking for, so they can transit the products over to the checkout counter.  If a shopper has missed the “cash only” signs, he or she will be directed to go find an ATM “a couple blocks away.” Greenwolf uses 420software.com, another seed-to-sale, cloud-based solution that runs on iPads.

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One More Stop Before The Airport

Entering the downtown Los Angeles location of Med Men, one of the country’s biggest players in the dispensary business, is a little bit like entering a nightclub. As the downtown streets start to cool off at night and fill up with diners and art walk participants, a door-person out on the sidewalk checks shoppers’ identification, asks for a phone number, and enters the customers data into Med Men’s proprietary Enterprise Resource Planning (“ERP”) system using a portable device (looks like an iPhone or one of the slightly larger mobile POS devices used by companies like Toast and Upserve). Once inside the shop, an army of weedtenders wait to guide customers to the right fit for their cannabis needs. Med Men has a shinier retail experience than some other dispensaries:  they could very well be the Apple Store of retail cannabis. Oh, and they take credit and debit cards! t’s hard to determine who does Med Men’s credit card processing, and a request to take photos of their mobile payment and ordering devices was met with suspicion and a polite “no.”

In what could almost be a finger in the eye of states without recreational cannabis, Med Men boasts a location literally blocks away from LAX, and while one could argue that it’s in place to greet people fresh off the plane, the staff have well-rehearsed responses to questions such as  - “Is there a garbage can where I can throw away all of the packaging before I stuff it in my backpack and go to the airport?”

Staff (quietly):  “There’s a dumpster out back.  Just make sure it all gets into the dumpster.”

Looking for technology solutions for your new or existing dispensary? We’re here to help! Contact us to get started.

 

Luisa Castellanos

IT Support for Retail & Hospitality