Opening a cannabis dispensary is an exciting venture—but one that comes with its own set of challenges. One of the most important hurdles is managing your initial inventory. Order too much, and you risk tying up valuable cash in stock that sits on shelves. Order too little, and you could disappoint your customers before they even return for a second visit.
The right inventory strategy is critical, and it starts with a thoughtful approach to product categories, vendor relationships, price points, and storage considerations. In this post, we’ll walk through everything you need to know about creating your dispensary’s initial inventory.
Deciding on Product Categories & Percentages
The first step in inventory planning is determining what categories to stock. As a cannabis retailer, your store will carry a wide range of products: flower, pre-rolls, vapes, edibles, concentrates, and topicals. The key is balancing variety and demand.
Suggested Initial Breakdown:
- 35% Flower
- 20% Pre-rolls
- 25% Vapes (split between disposables, carts, and pods)
- 10% Edibles
- 7% Concentrates & Tinctures
- 3% Topicals
Why this mix?
Flower and pre-rolls typically account for a large chunk of sales—especially in traditional markets. However, vapes are on the rise, and they’re crucial for capturing convenience-seeking customers. Edibles continue to grow, while concentrates and topicals serve smaller, loyal customer bases. The goal is to have a broad mix without overcommitting to low-demand categories.
Vendor Relationships & Order Sizing Strategies
Your relationships with vendors are crucial to the success of your dispensary. Selecting the right vendors will help ensure you have access to quality products at competitive prices—and support when you need it most.
When placing your initial orders, don’t go all-in with one vendor. Diversify your suppliers to reduce the risk of overstocking or relying on a single source. The initial order should be modest, but smart. Start with smaller orders across a variety of product SKUs, allowing you to test what sells and what doesn’t.
Operator Insights:
- First orders often range $10,000–$15,000 per vendor.
- Buy in cases of multiple SKUs, not just bulk of one SKU (e.g., one case each of 10 flower strains instead of 10 cases of one strain).
- Track product sales carefully. What sells out quickly should be reordered. What sits on shelves for months may need to be cut.
Vendor Partnerships:
- Establish clear communication about delivery schedules, billing, and returns before placing orders.
- Start working with well-established brands—especially when entering a new market—to build trust and create a strong customer base.
Price Points & Product Variety
The goal is to ensure your inventory offers something for every customer—whether they’re shopping for a low-cost option or seeking a premium experience. Offering multiple price points is essential to attracting a diverse range of customers.
Suggested Price Ranges:
- Entry-Level: Budget-friendly vapes (distillate), basic flower ($20–$30)
- Mid-Range: Premium flower, live resin vapes ($40–$50)
- High-End: Live liquid diamonds, top-shelf strains ($60–$80 for vapes, $150+ for half-ounces)
It’s important to diversify your product offerings in every category to cover these price points. Some shoppers may start with affordable options but are more likely to return when they find a product that aligns with their preferences.
Timing of Orders & Storage Considerations
Before placing your initial orders, remember that you can’t order product until you’ve secured your Certificate of Occupancy (COO). However, you can request menus in advance to get a sense of what vendors offer. This preparation helps you hit the ground running once your COO is finalized.
Timeline to Order:
- Start vendor outreach 1 month before opening to review their product catalogs.
- Place first orders 2–3 weeks before inspection/COO approval.
- Expect delays on initial deliveries (due to vendor setup and compliance checks).
- After opening, establish weekly or bi-weekly order cycles with high-volume vendors.
Vault Capacity:
Your storage capacity (vault size) will limit how much inventory you can store. Before placing large orders, map out shelf space to ensure you’re staying within the legal storage limits.
Common Mistakes to Avoid
- Over-ordering one SKU – The temptation to buy more of the “best seller” is real. But it’s better to test a variety and reorder based on demand.
- Ignoring vape subcategories – Disposables, carts, and pods all sell differently. Pay attention to market preferences in your area.
- Skipping smaller sizes – Trial packs (edibles or 0.5g vapes) help new users sample without a large commitment. Stock these in addition to larger sizes.
- Failing to negotiate terms – Negotiate discounts and payment terms with vendors to make your budget go further.
- Not tracking customer requests – A simple product request sheet can provide invaluable insight into which products to prioritize for your next order.
Key Takeaways
- Start with a balanced mix: 35% flower, 20% pre-rolls, 25% vapes, 10% edibles, 7% concentrates, 3% topicals.
- Diversify your initial orders across multiple vendors with smaller case sizes.
- Cover all price points: budget, mid-range, and premium.
- Consider vault capacity and time your orders around COO approval and re-order cycles.
- Use customer feedback and sales data to refine future orders.
FAQ
- What’s the average cost of initial inventory for a dispensary?
Most operators spend $100,000–$150,000 on their first order, depending on store size, vault capacity, and expected sales. A good rule of thumb is to allocate around $125K for initial inventory if annual sales are projected at $3M.
- Should I buy more flower, pre-rolls, or vapes?
While flower and pre-rolls remain essential, vapes are quickly catching up. Split your inventory to ensure a balanced mix, with 50% of sales often coming from flower + pre-rolls.
- How do I know if a product will sell?
Start by ordering one case of new SKUs. If it sells out in 2 weeks, reorder more. If it sits for months, cut it.
- When should I reorder?
Establish weekly or bi-weekly cycles with high-volume vendors. Use inventory reports (like Dutchie or POS data) to forecast demand and track fast-moving items.
Final Thoughts
Launching a dispensary with the right initial inventory sets the tone for your business success. A balanced product mix, strong vendor relationships, and careful planning ensure that your dispensary can hit the ground running without overstocking or understocking.
✍️ By Daniel Sabet, Cannabis CFO & Financial Advisor at @GreenGrowthCPAs. Daniel advises cannabis operators nationwide on finance, compliance, and strategy.
