Conduct cycle counts at minimum every 30 days for the most accurate dispensary inventory management

Do you know how much product loss you experience in a given week, month, year?

California cannabis retail operators are required to do full inventory counts at a minimum of every 30 days to make sure your physical inventory matches with your POS inventory and Metrc inventory. You're required by law to know your monthly inventory discrepancy percentage and keep it under 5 percent.

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While the minimum requirement is counting your inventory once every 30 days, we suggest conducting "Cycle Counts" much more frequently to keep your inventory organized both physically and digitally.

Cannabis dispensary inventory management requires diligent cycle counts

A Cycle Count is when a retail shop physically counts all of the inventory in their possession to compare what your inventory system THINKS you have with what's actually there. In a perfect world, those numbers always match exactly, but in reality that's rarely the case due to inventory shrinkage. The only way to find discrepancies between your assumed inventory numbers and actual inventory numbers is to do a full count of all physical products.

Cycle Counts is a feature that’s already included with Meadow, and we’ve seen it dramatically reduce theft and loss, ensure the right product mix on shelves, and smooth the transition to Metrc.  Here are some of the key features of our Cycle Counts tool:

  • Barcode scanning synced to an iPad or laptop for super fast and accurate counts.
  • Count while you're open using our 'Conflicts' tab, which identifies any changes in inventory (i.e. if someone sells a unit while you are counting inventory, you can easily adjust for the sale).
  • Easy delegation with allowances for multiple employees to do counts simultaneously.
  • Immediate loss/theft detection that notifies you of any discrepancy with your expected inventory.
  • Metrc optimization with drop-downs for counting within Metrc packages.
  • Other smart features, including: notes to record if a product was lost, found, damaged, moved, etc; manager review and approval settings; and summary reports with missing products and conflicts.

Another reason we always recommend using the Cycle Counts tool is because there are huge implications when it comes to avoiding an audit by the DCC (or worse!). Under Track and Trace, "a significant discrepancy in inventory is a five percent difference between the licensee’s physical inventory and the inventory recorded in the track and trace system."

If a significant discrepancy is identified, the licensee is required to notify the DCC within 24 hours. Failure to identify and report any inventory discrepancy over 5% will put you up for greater scrutiny and increase your chance of a painful audit. If you are not regularly counting your inventory, the percentage of discrepancy will likley become higher with time. To stay ahead of this, regularly count your inventory and report any discrepancies in a timely manor. If the discrepancy is not reported, you could risk losing your license. So, let’s put the safeguards in place to avoid these scenarios!

>>Get the free guidebook on the right way to do dispensary cycle counts now

Learn more about dispensary inventory management.

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