It may sound glamorous, but being a dispensary buyer is no different than doing the same job in any other retail operation. Just ask Mitchell Craig, buyer at Magnolia Wellness, an 8-year-old medical dispensary in Oakland, Calif. Craig’s background managing the back end at a large outdoor-clothing outlet, and his seven years of cannabis experience, helped him advance into this prime industry position. Now, most of his days are spent monitoring inventory data and researching product ratings, which he readily admits he prefers over outdoor wear.
Here, Craig shares his insights into product selection and menu variety, how sales data impacts purchasing, how he chooses vendor partners and more.
What’s Popular?Dispensary menus need to be competitive in the marketplace, so as a buyer, Craig must constantly track inventory levels to see which products sell and why. He has to purchase cannabis flower, ingestible medicines, concentrates, topicals, vaporizer pens and an array of other suitable medical-grade products, assuring that the dispensary carries a mix of powerhouse brands like Flow Kana, Kiva and Korova, as well as unique local products like Frenchy Cannoli hashes.
“I always pay attention to patient feedback,” says Craig. “They determine what sells, and a good purchasing agent always has to take time to analyze buying trends.”
He also depends on feedback from dispensary staff, especially those who are patients themselves. Craig gives samples to these staff members, as they have a baseline understanding of how to rate the potency and quality of cannabis products, and can give accurate feedback based on their own experiences.
Craig used to be a Magnolia budtender and still works the dispensary bar during busy times. He enjoys directly interacting with the members, and uses these times to stay fluent in operations of the dispensary’s point-of-sale software (POS).
“The POS system is used by the budtenders to track individual sales,” says Craig. “I constantly comb through this data to make purchasing decisions.” He explains this system links to the dispensary’s online menu, too. “Our online menu is built into the POS system, which allows members to place an order that links directly to the express fulfillment department. Once the order is filled, the patient receives an automatic notification that the order is ready.”
Purchasing in a Buyer’s Market
California is a buyer’s market with an abundance of available cannabis. And producers need both exceptional products and well-designed marketing plans to get shelf space. The current law allows dispensaries to purchase products from any of their members, so Craig has thousands of manufacturers and cultivators from which to choose. It would be impossible for Craig to meet with every company trying to catch his attention.
“When it comes to new products, there are several ways they get introduced into the dispensary,” says Craig. “Suppliers drop in and fill out a vendor product form that explains what, who and why they are dropping a product.” This allows Craig to evaluate and research the product, and compare it to the dispensary’s needs. “Vendors can also call and make appointments to meet with me, and show their product face-to-face,” he says, but he has limited time for these speculative meetings, only booking a few each week.
Craig looks at several variables when purchasing flower. “Checking inventory is essential, so I know what we are low on and what is in abundance,” he says. “Based on weekly sales, we may be low on sativa strains one week, but indica the next. So paying attention to this data is important, as is noticing what price points and quality of products are selling more than others.” Using this data, Craig calculates what is needed for the weekly purchasing plan. “When vendors bring flower in to show, we put the sample through an ‘organoleptic’ evaluation process which involves sight, smell, structure and feel,” he says. “Based on this review, I can rate and price the products accordingly.”
Cannabis pricing is broken into three main categories: high-priced, mid-grade and low-priced. The eighth price generally caps around $65 at the high end, and the low end goes down to $15. Craig must cover each of those categories, plus have indica, sativa and hybrid products on the menu, with a mix of well-known strains and regional favorites. “We also have five different price points based on quantity purchased, grams, eighths, quarters, half ounces and ounces,” Craig says. “It’s a lot of bases to cover each week.” Purchasing edibles and concentrates presents its own challenges. “As with any product, we are searching for high quality at reasonable costs. There are a lot of edibles companies out there, and some are better than others, quality-wise,” Craig says. “It can be tricky to find edibles that sell well, based on factors like dosage, packaging and taste. It’s also hard to please everybody, so we have to have options that include cookies and brownies, gummies, medicated soda, butter, potato chips and chocolate. That way, most patients will be able to find what they are looking for.”
When it comes to selecting vape pens, Craig evaluates cost, quality, failure rate, and warranty and return options. Patient feedback is essential, too, so he searches for any product ratings before purchasing a product. The process is similar when choosing concentrates. “Quality is key when choosing the right products to carry,” says Craig. “Concentrates can be expensive, so having different pricing options is essential.”
Purchasing from reputable sources is also essential, as products can “have lots of fillers that can create a negative and unhealthy experience, which can be avoided by purchasing quality medicine,” he adds.
Craig says it’s a juggle to balance the dispensary’s purchasing power with the needs of its members. “Buying is a full-time job when done correctly,” he says. “You have to constantly evaluate inventory, while managing each day’s vendor appointments and booking new ones for the future.” Craig works hard to maintain good relationships with suppliers and makes sure to spend plenty of quiet time reviewing changes to daily inventory.
Magnolia has several innovative programs to make sure that small, local companies can get dispensary space. “We offer pop-ups, which allow vendors to promote their product within our dispensary. This gives us a chance to see how they sell before making the choice purchase their products,” Craig says. “We also have an outdoor medical marijuana farmers market, where producers can come and offer their product, getting exposure to the community and good patient feedback.” During a "pop-up," held most days between 4:20 to 7:10 p.m., Magnolia's current or potential suppliers set up mini-stores within the dispensary. Members get to meet the makers, who offer samples and special deals, and Craig then evaluates the patient and staff response and reviews the sales data.
Preparing for Impending Changes
Currently, Craig is worried about the future. The state laws for medical and adult use of marijuana start Jan. 1, 2018, but the regulations to implement them are not yet codified. And, after watching the problems implementing the laws in Colorado, where the wholesale market value of cannabis flower bottomed out fast; in Oregon, where the supply was threatened by overzealous testing standards; and in Washington, where the medical market practically vanished overnight, he is rightly concerned.
Craig is unsure how many of his suppliers will be able to get permits, or how hard it will be for them to meet the new packaging regulations. He worries that the wholesale cost of goods will increase dramatically, at the same time that new rules add many new fees and taxes at retail. With lower profit margins, will Magnolia’s purchasing power go down, and, if so, how will that affect the bottom line? There are simply no answers right now, so Craig will remain flexible and be ready for whatever happens next.