Software services have been an important facet of the legal cannabis industry since its inception. Over the years, tech companies have worked to solve the myriad problems faced by cannabis entrepreneurs. According to Ivan Suslov, COO of the point-of-sale software firm IndicaOnline, one of the greatest pain points for cannabis retailers has been inventory management. This prompted the company’s latest focus on RFID technology, which tags and categorizes items for easy sorting through the use of radio frequencies.
This Q&A covers the company background, how they identified the need for RFID inventory solutions, developing the appropriate systems, how their platform streamlines the work of cannabis retailers, and more! Scroll down for the full interview.
Ganjapreneur: The cannabis industry has been struggling with problems like inventory management while other retail sectors have access to tools and technology to solve these problems. What industry-specific factors might create this divide?
Ivan Suslov: I think there are a few reasons why the cannabis industry has had limited access to these technological tools that help manage inventory. First and foremost, the inventory itself can be difficult to maintain. Cannabis flower can lose weight when it dries which can quickly cause issues in your inventory. This is why prepackaged cannabis flower has become more prevalent in recent years. Cannabis retailers have also been shut out of traditional financing opportunities to invest in newer and more expensive technology to manage inventory.
How does Indica Online solve problems for cannabis retailers, and what markets are you currently able to serve?
IndicaOnline solves several problems for cannabis retailers, from automated compliance reporting, to loyalty, to marketing, and even product loss prevention. We will be releasing an update soon that will have features to support the ice cream truck model of delivery in addition to the hub-based model. This will allow drivers to fulfill orders on the go rather than return to the dispensary or hub to pick up a new set of orders. The goal is to reduce the delivery time for consumers while in turn cutting expenses for retailers.
We currently serve all states that use Metrc for their seed-to-sale tracking system and any states that have yet to select a seed-to-sale software, such as Oklahoma. We also currently have clients in Canada, Puerto Rico, and Jamaica who have been very successful using our software to streamline their storefront.
Where did Indica Online identify a need for RFID technology in cannabis retail? How can the adoption of this tech optimize logistics in a retail dispensary model?
Inventory management and loss prevention would be the two pieces of retail that would benefit the most from RFID technology. Once RFID technology is implemented, the dispensary operator will know exactly how much inventory they have and where it is located basically without leaving their office. The technology not only improves the accuracy of counting but also will streamline inventory receiving and transferring between the back stock, sorting and the sales floor.
What goes into the process of developing RFID inventory management solutions for the cannabis industry? How long did it take to bring the product to market?
We’ve been in contact with many dispensaries since the very beginning that evolved from being small mom and pop shops to large multi-state enterprises. During our conversations we started to notice that inventory management and loss prevention were becoming the two most problematic areas in dispensary operations. Many times, dispensary operators found themselves spending days and nights counting endless products in their inventory and ended up with missing units or inaccurate counts. This not only wasted a lot of time but also resulted in thousands of dollars of added payroll. By analyzing this and looking at other industries, we came to a conclusion that the implementation of RFID technology will solve most, if not all of these problems. It took us about a year of development and testing to come up with a working RFID solution for our retailers.
How did the company test this new technology before going live with the update? What bugs was the team able to work out in this process?
We are working with several different size retailers that are willing to adopt and test the technology and provide us with valuable feedback. Working with both smaller and larger dispensaries who test the technology prior to release has given us insight into how each can benefit from RFID. We understand that some things that must be implemented in an enterprise size dispensary might not be needed in a smaller store and trying to optimize the technology so that it will fit in perfectly in any size retail operation.
What is the biggest challenge that dispensary owners have in onboarding RFID inventory management systems with retailers?
One of the main goals when we built IndicaOnline is for it to be user friendly and from what we’ve learned so far, the implementation of RFID won’t be very difficult. Like with anything new, it’s a matter of adapting to a new flow but the biggest difference with RFID is that when you are counting your inventory, now you won’t need to count or look for every single piece. Instead, the manager will point the RFID scanner at the shelves and immediately will get a count of all the products there. It’s really revolutionary in the amount of time that will be saved versus manually auditing your inventory.
An added bonus is that the reader can double as a honing beacon for specific products and help reduce product loss. This is ideal when searching for products that will expire soon, so they can be discounted and sold as opposed to being destroyed after they expire.
Thank you, Ivan, for answering all of our questions! Learn more about IndicaOnline and its RFID inventory management tools at IndicaOnline.com.