The Setup
A single-location dispensary was doing everything the traditional way — ordering wholesale from every vendor, paying invoices on delivery, and hoping product moved before it expired. At any given time, over $310,000 in inventory sat on their shelves. All paid for. All at risk.
The problem wasn't that they had bad products. The problem was the model. Wholesale means the dispensary bears 100% of the risk. If product doesn't sell, that's their loss. If it expires, that's their write-off. If the market shifts and prices drop, their margins erode because they already paid full price.
We looked at their vendor mix and identified their top vendor by shelf value. That single vendor accounted for $27,350 in on-hand inventory. All wholesale. All the dispensary's cash.
What We Did
We proposed a 60-day pilot: transition that one vendor from wholesale to consignment. Under consignment, the vendor owns the product until it sells at the register. The dispensary carries it, merchandises it, sells it — but doesn't pay for it upfront. Payment happens after the sale, through weekly settlements.
The vendor agreed. From their side, consignment means guaranteed shelf space and a reliable settlement schedule. From the dispensary's side, it means zero upfront cost on that vendor's entire product line.
We handled the onboarding: contract terms, settlement structure, Metrc manifesting, POS integration. The dispensary didn't negotiate terms or set up new workflows. We did it.
How Consignment Changes the Math
Three things shifted the moment consignment went live:
1. Cash goes back to operations. $27,350 that was locked in inventory is now free. That's payroll, rent, marketing, expansion capital — whatever the dispensary needs. The shelves look the same. The products are the same. But the cash position is completely different.
2. Dead stock drops to zero. Under wholesale, expired product is a write-off. Under consignment, the vendor owns it until it sells. If it doesn't sell, it goes back to the vendor. The dispensary's dead stock liability on that vendor's products went from a constant concern to zero.
3. Margins lock in at 50%. The consignment agreement included a margin floor. The dispensary keeps at least 50% on every sale. No more margin erosion from clearance pricing or market shifts. The vendor absorbs the downside. The dispensary keeps a guaranteed spread.
The 60-Day Timeline
- Day 1-7: We onboarded the vendor. Settlement terms set, Metrc transfer protocol established. The dispensary approved the terms. We handled everything else.
- Day 8-14: First consignment deliveries arrived. Product hit shelves the same way it always did. The only difference: no invoice. No payment due.
- Day 15-30: First weekly settlements ran. We pulled POS data, calculated the profit split, generated settlement reports, and cut the vendor's check. The dispensary saw exactly what sold, what they earned, and what the vendor received.
- Day 31-60: The dispensary expanded the pilot. Two more product categories from the same vendor moved to consignment. By day 60, $27,350 in shelf inventory had converted from wholesale to consignment.
The Result
$27,350 freed in 60 days. From one vendor. One pilot. The dispensary's cash-on-hand increased by that amount almost immediately. Dead stock from that vendor: zero. Margin floor: 50%. Weekly settlements running like clockwork.
The dispensary is now evaluating consignment for their next three vendors by shelf value. If they convert all four, the total capital freed could exceed $85,000.
They were paying $310,000 to stock shelves. Now the vendor owns the product until it sells. Same shelves. Zero risk.
If you want to see what consignment could free up for your dispensary, reach out for a free evaluation. We'll look at your vendor mix, identify the best candidates, and show you the math before anything changes.