Flawed Ordering Process Leaves Cannabis Retailers Sitting On Dead Stock

Scattered Ordering Channels Create Blind Spots

A report published in the Cannabis Industry Journal finds that cannabis retailers are losing money on dead stock because of a poorly structured ordering process. The report is based on several years of study of how retailers make purchasing decisions, covering the full sequence from the purchasing decision through the vendor conversation, the submitted order, the delivery, the receiving process, and the invoice.

According to the report, orders across the hundreds of retailers studied move through several different channels. Some orders are placed through wholesale marketplaces, some are sent by email, some happen through texts with vendor reps, some are built in spreadsheets, some involve PDFs, and some are internal transfers from a warehouse or production facility.

The report states this approach may work well enough when one person is managing one store and has every vendor conversation in their head. It becomes much harder when a retailer has multiple locations, multiple buyers, multiple receiving teams, and multiple people involved in accounting.

Receiving Mistakes Compound Into Margin Loss

The report finds that inventory problems are usually diagnosed after the fact, when a store has too much aging product, cash is tied up in categories that are not moving, or a buyer realizes a product was reordered twice. By the time these issues become visible, the inventory is already in the building.

The report identifies receiving as a key breakdown point. In a multi-store operation, the buyer may be working from a central office while a store manager, inventory associate, or, more likely, a budtender receives the product. If that person does not have the original order in front of them, they are being asked to make a judgment call without the context needed to make an informed decision.

Orders also change frequently, the report notes, because vendors run out of a product, a strain is no longer available, a replacement is suggested, a new SKU gets added, or a case count changes. Many retailers do not have a clean, shared record of what was originally requested, what changed, and who approved the change.

Fixing The Process Before The Order Ships

The report states that a single receiving mistake may not look catastrophic, but repeated across vendors, stores, and months, those mistakes can turn into excess inventory, margin erosion, and cash tied up in products the buyer did not actually intend to purchase.

The report argues that the operational risk begins once a buyer decides what should be ordered, not before. It identifies the ordering sequence as one of the least structured parts of the cannabis buying process and one of the easiest places for margin, cash flow, and accountability to quietly break down.

The report’s conclusion is that retailers need visibility into what has already been ordered but has not yet arrived, so the business spends less time reconstructing what happened and more time managing what should happen next.

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