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How to work with suppliers as a dispensary owner

published on April 21, 2021
by James Hammer

As a dispensary owner, you need to ensure your store always has the right amount of products stocked up for our customers. These products are the lifeblood of your dispensary, and running out of them could lead to your customer base going to another competitor instead. Suppliers are crucial for this aspect of the business since they are the ones providing you with the product you need to make a steady profit.

However, as a dispensary owner, you also must ensure the product you are selling in your store is of the highest quality. Simply teaming up with any old vendor won’t work well for you in the long run. You need to ensure that the supplier is handing you over goods that well not only sell well but provide your customers with the cannabis they need. After all, it would be problematic if they were to not only give you terrible goods but also toxic that could endanger your consumer base.

Retailers and suppliers have a symbiotic relationship, responsible for each other’s growth and success. While customers are the lifeblood of dispensary, suppliers are the ones keeping your shelves stocked. Your business is only as good as the product you sell. Since supplies play a crucial role in your business, you must vet every one of them before entirely committing.

So how can you, as a dispensary owner, work with a supplier? For this article, we are going to go over how you can work with them.


Verify their credentials

As a dispensary owner, it should be obvious by now that cannabis is not federally legal, and selling cannabis products from suppliers that are not following regulations and cannot offer up any safety certification could lead to some severe problems. Unless you are interested in losing your license and business, you are going to need some transparency from these suppliers.

Transparency is an essential aspect of your relationship with these suppliers, so they should be able to provide you with certification for their packing components, excipients, and active ingredients and generally be transparent about everything regarding their products. Requesting to see their credentials reassure the safety of the product you receive. It also ensures that your dispensary is following any cannabis regulation it needs to comply with.

The best way you can find out about the performance of any product is to see whether other dispensaries are saying about them. Additionally, consumer and patient feedback regarding those products can give you some excellent insight into how the product can potentially perform.

Information provided by other dispensaries can not only attest to the quality of a product but also other factors of a supplier’s business, such as their reliability, swiftness in communication, and product delivery. The information you garner from other retailers will reveal to you the testament of the relationship they have with these suppliers.


Ask about their quality management system.

Along with checking over the supplier’s credentials, you should also inquire about the manufacturing of the marijuana products to ensure the dispensary will continuously receive high-quality products. Taking the time to have a more in-depth understanding of a supplier’s quality management allows you to feel more confident in trusting the products you receive.

That heavily stresses the importance of a supplier’s transparency, and quality assurance also permits the dispensary associates and budtenders to feel highly confident about the cannabis they sell to their customer base.


Deals and price points

There are all sorts of ways you could go about deciding on the products your dispensary should purchase. What would work best within your budget and inquiring what sort of deals or ways that the cost of a product can be lowered is an excellent measure. For instance, some suppliers may offer a sizable discount if a product is purchased in large quantities.

However, this method could vary depending on your state’s cannabis regulation. The best thing you can do is explore every possible offer that the supplier has, as it could make it far easier to negotiate other price points with them.


Barcode every product

There have been known reports about suppliers in Oregon, Nevada, Washington, and other states that have legalized recreational cannabis and make mistakes when it comes to remaining compliant and appropriately transferring products to dispensaries.

When you check over the products, there may be times where you see incorrect information, testing results, labels, or product counts. For instance, your supplier may say that they are transferring over 100 units of a product you requested and only receive 80 of them. The suppliers usually produce a ton of overhead in terms of time spent correcting these mistakes.

While this doesn’t mean you should not partner with that particular supplier, you should budget more time for making sure things like quantities or labeling are correct.

It is strongly recommended that you work alongside your supplier to produce scannable barcodes for every one of the products they sell and transfer to you. If something like not set up, you and your staff shall be stuck with too many new products that you need to barcode or re-barcode yourself. Barcoding products and scanning them at the checkout is an excellent practice that ensures you always remain compliant with your sales.


Responding to market conditions

With the way the cannabis market and industry are rapidly expanding, it is crucial to consider how quickly your supplier can adapt to these changes, whether it be from newly introduced regulations regarding cannabis, legal status, or any changes made to current regulations.

Although it is not just about reacting to any changes made by regulators but also remaining ahead of market trends. Suppliers need to remain on top of everything going on in the market and should be able to offer a more prosperous and popular product ahead of the excitement so dispensaries can maximize their profits. Another crucial matter is to make sure that the supplier would be able to swiftly provide you with the highly demanded product within short notice.


Expected gross margin

Another significant thing dispensaries need to inquire about is how much revenue they should expect to acquire from selling the supplier’s product on their storefront. The supplier’s gross margin is usually indicative of how their business is performing, and the gross margin will vary between every product. That said, the expectation that the supplier provides you with could be a decent indicator of whether or not your dispensary should be partnering with that supplier.


Provide feedback to your supplier

Developing a healthy relationship with your supplier is essential to ensuring your dealings end on a positive note. A useful method you could employ when dealing with various suppliers is to create a supplier scorecard. Every time your suppliers drop off the products you requested, the scorecard can help keep track of your evaluation of the order. You can evaluate if the order came on time, if it is the amount you requested, or if it is labeled appropriately, and so forth.

That allows you to build a personal history with each supplier to inform you during future decisions. It is vital to have quantitative data on hand to support your grading of the suppliers to determine which vendors are the most efficient and easiest to work with.

For much larger dispensaries, you may need to have varying employees doing the purchasing, receiving, and managing the products. If that is the case, you need to stress the importance of communication between these employees. One thing you should do is pass along the supplier scorecard to the purchasing manager. By doing so, they can offer feedback to those suppliers since they are the ones in charge of communicating with them.


See if your missions align

There is always room to get to know your supplier much better. Take the time to consider the company’s ethics when choosing a supplier. Some dispensaries like to work with people whose practices align with their own mission statement or ideology. Others may prefer to buy from suppliers that like to focus on sustainability, eco-friendly practices. Maybe you are interested in knowing about the diversity of the company or feel better by purchasing from companies that are minority or women-owned.

Consider finding a supplier that relates and aligns with your mission statement, and don’t be afraid to trust your instincts if something seems off.


Product variations

One of the many challenges when it comes to the cannabis industry is that products tend to appear and disappear rapidly. Furthermore, there are tons of small-batch products with variations. A strain for a single flower could contain 20% THC, but the next time you order a resupply, the product’s test results could show the potency at 23% THC. Depending on the harvest or supplier, these test results will change and lead to consistency problems.

As you would expect, customers sometimes consider products with varying THC levels as different products with different price tags. That means the same strain of flower with varying potencies may have another pricing value. Supplying your budtenders with talking points about why and how that happens will help with educating them and the customer if they are unaware.

The complication goes even further since suppliers could have an edible or stain is only available during certain times of the year. Work with your supplier to acquire complementary products that could replace the seasonal ones until that season returns.



The relationship between a supplier and dispensary owner is crucial to ensure both businesses successfully continue operating. As an owner, you need to communicate with your suppliers to ensure you are receiving the best possible products on the market. Working with them will lead to a fruitful relationship that guarantees both of you remain happy.