Cash Automation: The Cash Management Solution Dispensaries Need On 420 and Every Day
Updated: Mar 27
I work with cannabis business owners who have dispensaries at various stages of growth—from newly licensed startups to dispensaries struggling to standout in mature markets. What do they have in common? The daily struggle with
cash management. In fact, as they become more successful, the security of their cash and the safety of their budtenders and customers are even greater concerns. Their anxiety increases around Weed Day, an annual celebration in the cannabis community. In addition to worrying about whether they have enough staff and inventory to handle the increased demand, they are concerned about their capacity to count, secure and track their cash.
How do I help them with their cash challenges? I assist with implementing cash automation technology. This solution eliminates labor-intensive cash handling processes so that budtenders and other associates can focus on customer service, upselling and other strategic activities. This solution is particularly strategic during the 420 season, when there will be even more traffic in your store. To fully reap the benefits of Weed Day, you want your staff to have time to adequately serve shoppers, selling them additional products and building trust that inspires repeat business.
To be ready for the growing demand for cannabis, you want to adopt and fully leverage cash automation technology as an everyday best practice.
The Cash Conundrum
Strong cash flow, an indicator of business strength, poses a costly and risky administrative burden for cannabis businesses that have not automated cash management.
In most cannabis dispensaries, cash is counted multiple times throughout the day. The cash from one transaction might be touched at least six times. Each time this money is handled, there's a chance it can be miscounted or lost to internal theft or robbery.
Many dispensaries have to choose which function to emphasize: cash security or sales and marketing. That means growth is not likely to happen as quickly because too much focus is on the administrative burden of cash management. In these dispensaries, who has time to get to know customers, educate them on products and plan sales promotions? With staff bogged down by repetitive cash management tasks, growth can be anemic. There is no ROI on time and labor lost to manual cash processes; however, there’s plenty of upside to time and energy invested in upselling, improving customer experiences and building loyalty.
The High Cost of Manual Cash Management
Ultimately, if a dispensary lacks cash automation technology, at least 9.1% of its cash receipts is consumed by some aspect of managing cash. Where exactly do these costs come from?
Time and labor: It takes two people to count and verify cash. A typical transaction can range from $30 to $75. Large dispensaries can bring in as much as $80,000 per day, and as much as 50% more on 420. As a result, counting cash can take up a lot of time for both managers and budtenders—time that can be spent serving customers. Some dispensaries have a policy that no budtender can leave without balancing to the POS at the end of the day. These businesses often pay out significant overtime wages to cover the time it takes to complete end-of-day reconciliation.
Cash loss: If cashiers are not accountable for balancing cash to POS receipts or cash cannot be quickly counted and secured, it’s exposed to theft. This is a significant risk and a direct impact on your bottom line profits.
Banking fees: There are about 700 banks and credit unions taking deposits and working with cannabis organizations. Financial institutions charge dispensaries about four times the rate a grocery store or other general retailer would pay in bank fees due to the additional reporting and regulatory requirements. Another point worth mentioning is that when manual processes are used for deposit prep, there’s a high potential for human error—for example, a number transposed on a deposit slip. Banks charge hefty adjustment fees for inaccurate deposits.
Cash transport: Many dispensary owners also need to pay for the transport of cash to the municipal tax office or to their bank; cash automation secures your cash and enables you to optimize the frequency of armored transport.
Accounting, compliance and operations: Manual processes are prone to human error. As a result, more time is spent trying to reconcile inaccuracies. With cash automation, human error is minimized and the best solutions enable direct exports of data to your accounting system for easy, accurate monitoring and reporting.
Manually counting cash is labor intensive, stressful and inaccurate, which is why I advise dispensary owners to implement cash automation technology. (Check out our ebook for additional insights.)
Why Cash Automation Tech Is the Best Option for Cannabis Business Owners
Cash automation technology is not new. It's been used by banks for decades. The amount of cash flowing into the typical cannabis store can far surpass that of your average bank branch. That’s why it makes sense for cannabis businesses to leverage this solution to assist in the counting, processing and securing of cash.
A cash automation solution consists of both hardware and software. Cash automation software controls the cash recycler, which is the hardware component. Cash recyclers are vaulted machines that take in and dispense currency. As they do so, they accurately count and sort cash 80% faster than any human can. They also identify counterfeits and secure the cash. The software driving the recycler can be calibrated to align with your dispensary's cash management processes.
This technology can be a game changer in settings where there's a high volume of cash that needs to be reconciled. Today, many big-box retail stores and other businesses that have a significant number of daily cash transactions use this technology. Cannabis dispensaries are just getting into the game.
Cannabis dispensaries are the most heavily regulated retail establishments. Dramatically reducing the workload required for cash management frees up time that can be devoted to running sales promotions and strengthening customer relationships—initiatives that can generate loyalty and accelerate growth.
Here are just a few of the benefits owners gain when they implement cash automation technology in their stores:
Efficient cash management: Cash automation helps dispensaries reduce the time it takes to prepare start funds, make change, replenish tills and complete end-of-shift reconciliation. There’s no longer a need to count cash multiple times.
Cash security: In many cannabis dispensaries, it’s too easy to pocket cash because there’s so much of it. Owners report cash loss due to internal theft of as much as $1,000 per month. There’s also the risk of robbery. A cash automation solution would provide greater security to your cash as it keeps an accurate record of who put cash into the machine and who took it out. As a result, there’s less cash exposure, greater accountability on your team and significantly less cash shrinkage.
The ability to leverage cash on hand: It’s efficient for dispensaries to leverage cash on hand to pay wages and make payments to suppliers and other vendors. Few do so because of the administrative burden of tracking those payments with the accuracy needed to pass an audit or meet regulatory requirements. Leading-edge cash automation solutions have tracking capabilities that streamline payments, saving owners on bank deposit and cash in transit fees—and making their accountants happy.
Reduced bank fees: Cash automation solutions provide trending data regarding cash levels that you can use to plan bank deposits and change orders. With this information, you can reduce bank fees and decide how many banking relationships you need.
Cash visibility: Advanced cash automation solutions provide dashboards that let you monitor cash intakes and outflows in near real time. You can also see how your cash recyclers and dispensers are performing throughout your locations and which budtenders are not in balance on any given day. This is the intelligence you need to truly control cash—and cash automation systems make it available without the need to rely on periodic manual cash audits or other labor-intensive, unsecure processes.
Automate Your Cash
For 420 and every day, your dispensary needs the capacity to connect with shoppers and cultivate the customer loyalty that will grow and sustain your business. With cash automation technology, you'll be able to count cash faster, authenticate it quickly and secure it automatically. That means there’s more time and energy to put into developing a solid customer base.
If you want to implement cash automation at your dispensary, I can help you make that happen. Simply reach out to schedule a consultation.