Over the last several years, we have spent a lot of time studying how cannabis retailers make purchasing decisions.
Not just which products they buy, or how much they buy, but the entire sequence of events that begins once a buyer decides inventory needs to be ordered.
That sequence matters more than most operators realize.
In cannabis retail, inventory problems usually get diagnosed after the fact. A store has too much aging product. Cash is tied up in categories that are not moving. A vendor invoice arrives that does not match expectations. A buyer realizes a product was reordered twice. A store team receives items that were never supposed to be accepted.
By the time these issues become visible, the inventory is already in the building.
The mistake often happened earlier.
It happened somewhere between the purchasing decision, the vendor conversation, the submitted order, the delivery, the receiving process, and the invoice.
That is the part of retail operations we have become increasingly focused on, because it is 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 buyer’s job does not end when the order is placed
A lot of attention is paid to the buying decision itself. How much should we order? Which products deserve shelf space? What is selling? What is overstocked? What should we stop carrying?
Those are important questions.
But the work does not end once a buyer decides what should be ordered. In many ways, that is when the operational risk begins.
Across the hundreds of retailers we work with, orders often move through several different channels. Some 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. Some are internal transfers from a warehouse or production facility.
That 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.
The result is that a retailer may have a clear view of current inventory, but a much less clear view of what has already been ordered but has not yet arrived.
That gap creates real costs:
- Buyers duplicate work
- Store teams lose context
- Accounting teams chase down discrepancies
- Operators make inventory decisions without knowing what is already in flight
When purchasing information is scattered, the business spends more time reconstructing what happened than managing what should happen next.
What arrives is often different from what was ordered
Every cannabis retailer understands that orders change.
Vendors run out of a product, a strain is no longer available, a replacement is suggested, a new SKU gets added, a case count changes, a product that looked available during the sales conversation is gone by the time the order is packed, and so on.
Some of that is unavoidable.
The bigger issue is that many retailers do not have a clean, shared record of what was originally requested, what changed, and who approved the change.
That matters at receiving.
The person accepting a delivery is often not the person who built the order. 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.
- That is how substitutions slip through.
- That is how extra products get accepted.
- That is how a retailer ends up carrying inventory that was never part of the plan.
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.
Accounting inherits the same visibility problem
The same issue shows up again when invoices arrive.
Accounting teams are often asked to reconcile invoices with what was received, but the original purchasing decision may live elsewhere entirely. It may be in a buyer’s email, a text thread, a PDF, a marketplace order, a spreadsheet, or a vendor conversation.
That makes reconciliation slower and less reliable.
If an invoice includes a product that was substituted, was it approved? If the quantity changed, who agreed to it? If the cost changed, was the buyer aware of it? If the delivery includes products that were not on the original request, should they be paid for?
These questions are not theoretical. They determine whether the retailer is protecting margin, managing vendor relationships, and maintaining control over cash.
Inventory is usually the largest use of cash in a cannabis retail business. When the process for ordering, receiving, and reconciling inventory is fragmented, the financial impact does not remain contained within the purchasing department. It reaches the P&L, the balance sheet, and the vendor payment schedule.
Inventory problems often begin upstream
When a retailer is carrying too much product, the first assumption is often that demand planning failed or the brand didn’t promote its products hard enough.
Sometimes that is true.
But many inventory issues begin after the buying decision has already been made. A buyer may have ordered the right amount, but the vendor substituted slower-moving products. A buyer may have intentionally avoided a product, but it was still added to a delivery and accepted by the store.
A buyer may have planned around current inventory, but another order was already in flight and not visible. A buyer may have made a smart purchasing decision, but the receiving and reconciliation process failed to preserve that decision.
This is why purchasing workflows deserve more attention.
Cannabis retailers are already dealing with difficult inventory dynamics: changing consumer preferences, fast SKU rotation, strain variability, inconsistent product availability, promotional pressure, vendor minimums, and limited cash. The business is hard enough when the order process works cleanly.
When it does not, the retailer absorbs the cost as overstock, aged inventory, unnecessary discounts, strained vendor relationships, and lost time.
The industry has underbuilt for the buyer
One reason this problem persists is that cannabis retail technology has not been built deeply enough around the buyer’s actual day-to-day workflow.
There are systems for:
- compliance
- point of sale
- wholesale marketplaces
- accounting
- and spreadsheets fill in the gaps between all of them.
But the buyer’s job cuts across all of those systems. A buyer has to forecast demand, manage assortment, control spend, communicate with vendors, coordinate receiving, understand store-level needs, and protect cash flow.
That is a much bigger role than the industry often acknowledges.
When we study retail inventory performance, we inevitably end up studying the buyer’s workflow. The two are inseparable. If the buyer cannot clearly manage what is being ordered, what is already in flight, what vendors are changing, and what stores are receiving, inventory health suffers.
This is the part we obsess over because the impact is so large. A better purchasing process makes the buyer’s life easier, but more importantly, it helps stores avoid buying products they do not need, gives receiving teams better context, gives accounting cleaner records, and helps operators make decisions with fewer blind spots.
On average, retail stores across the US are overstocked by $50k per month per location. This number hasn’t changed in over 2 years, since we’ve been analyzing it.
When we say that mismanaging inventory can cost a retailer a ton, this is what we mean.
What better looks like
Retailers do not need more complexity in their operations. They need cleaner handoffs.
A mature purchasing process should make it easy to answer basic questions:
- What did we order?
- Who submitted it?
- What is still in flight?
- What changed before delivery?
- What did the store actually receive?
- What should accounting expect to see on the invoice?
Those answers should not require digging through inboxes, texts, PDFs, spreadsheets, and vendor portals. They should be part of the business’s operating rhythm.
Retailers that improve this process will save administrative time, which I’m sure they’d appreciate. They will also make better inventory decisions, reduce avoidable overstock, improve vendor accountability, and protect cash flow, which will help them open new stores rather than fight to survive.
That is why the order sequence deserves more attention, and why we centralized order management in our platform, Happy Buyers.
Many of the inventory problems cannabis retailers see on the shelf started long before the product arrived there.
