It’s like a dream come true for point of sale (POS) VARs. There’s a new consumer market with a product that people are clamoring for to the tune of $10 billion per year and anticipated growth of 28% over the next three years: Cannabis.
If you haven’t considered expanding into the cannabis point of sale market, you could be missing out on one of the biggest opportunities your business will ever encounter.
A Snapshot of a Rising Industry
The legal cannabis industry is growing fast. Currently, cannabis is legal for recreational use in nine states and the District of Columbia, and medical marijuana is legal in 30 states. A report from cannabis industry analysts at Arcview Market Research and BDS Analytics estimated 2017 legal sales to reach $9.7 billion, a whopping 33% increase over 2016. Moreover, their report estimates the market will reach $24.5 billion by 2021.
The product line is more diverse than you may think. Dispensaries sell oil, hash, shatter, and rosin that can be smoked or vaped. They may also offer bakes goods and candy, as well as the traditional flower. Medical dispensaries sell products including CBD (cannabidiol) usually in the form of oil or candy, which is used to treat epilepsy or pain.
There are 9,397 active licenses for marijuana businesses in the U.S.—and all of them need a POS system to help manage their business.
What’s Different About Cannabis POS?
There are some aspects of selling cannabis retail or through a dispensary that make it different from other business operations and that require different features than other retail POS systems. Here are five examples:
1. It’s a cash business.
At least for now, cannabis businesses primarily deal in cash. There are still federal laws that define it as illegal, and banks, caught in the middle in states that have made it legal, are reluctant to open accounts for these businesses. Politics and legal battles aside, this presents unique challenges to cannabis businesses—which could really use trusted advisors well versed in retail and POS technology as well as strict cannabis regulations to help them solve business challenges such as this.
2. Scales need to be sensitive.
You may have sold scales for deli, grocery, or bulk items. But cannabis scales have to be more accurate than a hundredth of a pound. The sensitivity of a cannabis sale must be accurate to a fraction of a gram—both to comply with regulations and to ensure maximum profits.
3. Labels are strictly regulated.
Cannabis customers are limited to a specific quantity they can purchase per day. That may seem straightforward, but considering a customer may be purchasing baked goods, candies, or oil, the quantity of controlled substance won’t be immediately obvious without a label. Some states also require labels to include information about testing that has been done on the products and traceability information back to the source of the cannabis flower.
4. Receipts are more than proof of purchase.
The information that needs to be included on a receipt provided by cannabis businesses are different depending on the regulations in each state. In Oregon, for example, receipts need to include store name and address, product category, something that identifies the products that are taxed, a breakdown of state and local tax, and a disclaimer that receipts are required for tax disputes. In California, for example, it’s important to instruct your customers to save all copies of receipts from each day’s sales for a minimum of three years in the event that the cannabis store is subject to an audit. Advice your customers to check on their individual state’s regulations regarding cannabis receipts.
5. Stores need heightened security.
With an all-cash business, a desirable product, and tough regulatory scrutiny, cannabis stores and dispensaries will need a robust security solution. Today’s state-of-the-art solutions enable business owners to track inventory with GPS, monitor facilities inside and out with high-resolution IP camera systems, guard blind spots in the store with hidden cameras, and protect their businesses with sensitive alarm systems that send alerts in the event of a break-in or fire. Integrating security with the POS system can provide information that helps business owners identify people responsible if theft occurs and give law enforcements the details it needs to act.
The cannabis industry is in its earliest stages, so it will be important for you to establish partnerships that will help you develop this part of your business as you expand your VAR into a new market, stay on top of regulatory developments, and search the market for solutions that will provide your customers with the greatest value.
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