Stay Compliant: 9 Essential Tips for Effective Cannabis Inventory Management
Cannabis inventory management is not just about streamlining operations—it’s a cornerstone for compliance.
Plant-touching businesses must track every seed, product and process through mandated systems like Metrc and BioTrack, keeping pace with unique regulatory demands.
These documentation requirements span every stage of the production process, including:
? Raw Materials
⚗️ Work-in-Progress (WIP)
? Finished Goods
Regulatory requirements can vary by market and include details that operators in many other industries rarely need to address—like keeping track of hundreds of RFID tags.
Accurate records empower business owners to:
? Make informed, data-driven decisions
↩️ Respond quickly to recalls, audits and other critical checks
? Ensure real-time inventory accuracy across sales platforms
Cannabis-specific ERP solutions are key for staying on top of these demands, helping operators meet compliance with real-time tracking across the board.
Streamline, stay compliant and protect your bottom line with smarter tools and systems.
For more insights on effective inventory management and staying compliant in the cannabis industry, check out our detailed explainer on the Figgro blog:
Cannabis inventory management is the foundation for efficient operations. It’s required by state regulators, who typically engage track-and-trace systems like Metrc and BioTrack to ensure each cannabis plant is accounted for from seed to sale.
Whether that plant becomes an ounce of flower sold in a dispensary, biomass for concentrates, edibles, topicals or other packaged products, operators must have records of its journey through the production process.This ensures every product is traceable back to it origin, protecting against diversion and meeting state mandated tracking requirements.
Accurate cannabis inventory records enable operators to comply with regulators and make data-driven decisions that can increase efficiency and boost profit margins.
Inventory management is crucial in any industry, and cannabis operators face additional compliance standards. Figgro’s cloud-based ERPs help manage inventory while handling chain-of-custody reporting, order management and compliance with state-specific regulations. What do cannabis businesses need to know about staying compliant? Here are 9 actionable tips:
1. Categorize Cannabis Inventory
Cannabis inventory typically falls into three categories:
- Raw Materials: Natural plant material like harvested flower.
- Work-in-Progress (WIP): Products in the process of transformation, such as bubble hash or extracts.
- Finished Goods: Ready-for-sale products like packaged edibles or tinctures.
It’s crucial to categorize and track each type separately to avoid compliance issues. Using Figgro’s cannabis-specific cloud ERP ensures real-time updates and helps operators stay compliant.
2. Track Cannabis Raw Materials With Precision
In most states, cannabis cultivators and product manufacturers must use track-and-trace systems to monitor raw materials from seed to sale. Every batch of raw material (e.g., flower or biomass) must be assigned a unique batch or lot number for traceability and accountability, especially in the case of recalls.
Proper labeling of raw materials should include:
- Product name
- Batch/lot number
- Harvest date
- Strain and potency information
- Source of cultivation
Maintaining records for storage conditions, such as temperature control and security, ensures compliance with product integrity standards.
3. Monitor Work-in-Progress (WIP) Inventory
Work-in-Progress (WIP) inventory refers to products in the process of being transformed but not yet finished. Examples include fresh-frozen biomass, bubble hash, or crude oil extracts awaiting further refinement. These intermediate products need to be carefully tracked, especially during chemical processes like extraction.
Ensure that WIP inventory is labeled consistently with batch numbers and tracked through the production process. Storing WIP products under regulated conditions (e.g., temperature-controlled storage for concentrates) helps maintain quality and comply with regulations.
Look for a cannabis ERP like Figgro that offers WIP production templates that operators can use to track inputs and outputs throughout the stage-wise conversion processes. Collecting those key data points will help growers optimize yields faster than ever before.
4. Ensure Proper Testing and Storage for WIP Inventory
Before raw materials can be processed or sold, they must be tested for contaminants. Third-party laboratory test results should be recorded in the inventory system, and some may be required on product labels once processed.
Regular audits of WIP storage areas ensure products are kept in proper conditions, and inventory logs must include details like temperature settings. Tracking the movement of WIP products, how long they have been stored, and where they are processed helps with compliance.
5. Perform Hazard Analysis and Testing for Cannabis Edible and Beverage Products
WIP inventory that incorporates cannabis into edible or drinkable products requires additional oversight. A Hazard Analysis and Critical Control Point (HACCP) program helps maintain food safety standards for edibles. Even without GMP (Good Manufacturing Practice) compliance, a strong HACCP program is beneficial in the protocols for product safety and quality.
6. Comply with Packaging and Labeling Requirements for Finished Goods
Finished goods inventory, such as packaged edibles or tinctures, must comply with state-specific packaging regulations. Packaging requirements typically include:
- Product name
- Batch/lot number
- Cannabinoid potency (THC/CBD content)
- Expiration or use-by date
- License number
- State-required warnings
- Childproof and tamper-evident packaging
Implementing quality control checks before finished goods enter sales inventory ensures that all labeling and packaging standards are met.
7. Adopt FIFO Practices for Cannabis Finished Goods Inventory
For perishable items like edibles, it’s important to use the First In, First Out (FIFO) method. This ensures older inventory is sold before newer stock, reducing waste and maintaining compliance with expiration date regulations. Organize storage so that older products are prioritized for sale, and use inventory software to flag items nearing expiration.
8. Synchronize Inventory and Sales Systems
Avoid overselling or running out of stock by synchronizing sales platforms with your inventory system. This ensures real-time accuracy, prevents compliance violations, and improves customer satisfaction.
How does a cloud-based ERP like Figgro assist cannabis operators? Figgro has a native e-commerce solution that syncs directly with the back-end inventory management module. In some cases, Figgro can even integrate with 3rd party selling platforms to synchronize data.
9. Automate Reporting for Cannabis Inventory Management
Before finished goods can be sold, they often must pass state-mandated testing for potency, pesticides, and other contaminants. During this process, products are placed on Quality Assurance Hold (QA Hold) and cannot be sold until testing is completed. Keep records of secure storage, disposal of expired or damaged products, and details of how much of each product was produced, sold, or destroyed.
Automate reporting with cannabis inventory management software to ensure compliance. Use automated alerts for products nearing expiration and follow state disposal protocols for unsellable goods. Regular reconciliations and audits of physical inventory ensure accurate record-keeping. By implementing these best practices, cannabis businesses can improve inventory efficiency and stay compliant with state regulations.
By implementing these actionable tips and using Figgro’s cloud-based ERP system, cannabis operators can streamline inventory management, ensure compliance, and optimize business performance.Simplify compliance and master inventory management with Figgro. Cannabis operators must track every plant through every stage of its lifecycle to comply with state regulations. Figgro makes it easy with a customizable, integrated inventory management solution designed specifically for your business. With Figgro, you’ll gain reliable data to drive smarter decisions and keep your operations running smoothly. Take control of your inventory and elevate your business today. Contact us now to see how Figgro can transform your operations!
