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Retail Inventory Management, Part Two

Today, we will be discussing inventory and inventory management in Part two of a series on inventory management and control. Previously, we discussed our system for evaluating new products to determine what makes the cut and onto our shelves.

Part two will deal with drilling down on what type of products will be carried. In the early days, during the Summer of 2014, deciding what would be on our shelves was easy because there was scant little available! We had 6 total items; 2 types of pre rolls and 4 types of flower. We wanted all that we could obtain, there was no process in determining what we would carry, Demand dictated that we snagged all that we possibly could and for several months, it was not nearly enough.

Slowly, in the second quarter 2015, our dispensary began to see the first real and significant progress in the variety as well as quality of products and growers from which to choose. And it was at this time we began formulating an in-house system for deciding which products would get the nod and the shelf space. We discussed this process at length in my previous inventory management article.

Cannabis Central has a purchasing manager, Margo, who does a terrific job working with, constantly adjusting, and, if you will, massaging our inventory. Whereas in 2014 we had a 1/4 page menu, now we have a 10 page menu. We had 6-8 items in those early days, now we have nearly 200 products available in my shop. So quite obviously the job of determining what we stock is a much larger job! There was a time when we would say aloud, “The more we have, the more we sell”. To a degree, and in simpler times before the sheer number, variety and scope of State-licensed products was as it is today, this was our inventory mantra. “If you buy it, they will come”. Today, there are 6 licensed retail stores in our 40,000 population County and we have to be much more surgical in our approach.   

 We have challenged Margo to look at the shelves, what we have in stock and imagine “the perfect inventory”. This is not an exact science, it’s more of an art. Knowing our customers, or at least believing we do, working within an inventory budget, considering the season, upcoming events like concerts or holidays, all contribute to our thinking process regarding the product mix that we will be carrying.

This is a bit like assembling a sports team. For example, we do not work with any grower from when we first opened. Of the 2 we did begin with, one has shut down and the other just fell out of favor for a variety of reasons. Those two “starters” have either retired or been cut. We are constantly evaluating “talent” but this is  not to say we do not believe in a sense of loyalty and we do not replace vendors lightly. But “players” need to “compete” for shelf space every day with every delivery. 

We learned early on that just because a grower has historically produced “top shelf” products, a variety of factors may have changed. Businesses change, personnel changes, growers change and therefore quality, or the perception of quality, changes. It’s never stagnant, product production is very dynamic, in fact quality is moving in one direction or another constantly. So we watch even those who have been with us for a long time.

We cannot allow ourselves to become complacent about quality. The good grower/processors will be looking for ways and methods to improve on a nearly constant basis. And the good and secure grower/processor will be open to criticism and customer comments/complaints and will work with us to settle the situation to the best of our ability within the constraints of the law.  

In a growing industry, maintaining the status quo is synonymous with going backward. The overall quality of products is measurably better than it was in the beginning and variety and quality are improving and changing daily it seems. It is truly inspiring to see business owners and managers rise to the challenges they are facing within our industry in Washington State.

Overall, business owners have done a marvelous job, but as in nature, the strong survive and the weak and sick get picked off. It is our job to treat vendors with the respect they deserve, and no one knows better than I they have a difficult job to do in an ever increasingly tight and competitive marketplace.

But is also not our job to coddle those who are failing. Our job as business owners is to maximize profit, but a part of our job is to take care of our industry as well. Doing business with the unhealthy producers makes the overall industry less healthy. We are doing our part to make the industry better and more efficient by watching our inventory like mothers watching their babies. Our future depends on our diligence and never ending search for “the perfect inventory”. 

In Case You Missed It

An Operator’s Insights on Retail Inventory Management, Part One

Rob Hendrix

Rob Hendrix

Rob Hendrix has been a resident of Ellensburg, Washington since 1990. After 29 years in the retail automotive business, the last 7 as GM at a dealership in Yakima, he opened Cannabis Central, a retail location in Washington in August of 2014 and has operated profitably and violation free since. As a result of his extensive experience and success, he founded Cannabis Consulting Nationwide and is its Founder/Owner.

Hendrix has successfully navigated the invasive rules and regulations in Washington since launch. He has been politically active, is a member of the Washington Cannabusiness Association (WACA) and a member since September 2014 and a board member since January 2016.

Hendrix understands the challenges associated with starting any business but understands better than most the “extra” stress that comes with opening a retail cannabis store including issues related to; banking, finance, security, insurance, community reaction and push back, dealing effectively with local government and law enforcement, as well as family and friend reaction.

Hendrix has been married to his wife Diane for nearly 40 years and has 3 children and 5 grandchildren. He is available to help anyone already in the business or those who are contemplating getting into cannabis retail and can be reached at:

Cannabis Central LLC/Cannabis Consulting Nationwide LLC
Cell: 509.833.5556
Office: 509.201.1144

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