12 Tips on Finding the Best Cannabis Payment Software

Dispensaries and other cannabis-related businesses don't have the privilege of working with banking institutions and payment processors. Despite the continued progress of the legalization of cannabis for medical or recreational reasons in the U.S., cannabis is still illegal under federal law. 

And given that banks and major credit card networks are federally regulated, they don't want anything to do with a criminalized product like marijuana. Another deal-breaker is the mismatch between federal and state laws regarding marijuana sales, making compliance a difficult proposition. 

That said, the burgeoning cannabis industry has triggered the need for payment processors focused on the unique needs of the industry. They should offer modern payment services and be in strict compliance with federal and state regulations.

Here are some tips to help you in your search for the best cannabis payment processor: 

Features That You Should Look Out For

During your search for the best cannabis payment software, you will realize that you have more options than you imagined. With the industry's rapid growth, more and more dispensary payment software is finding its way into the market.

But due to the strict compliance requirements in the cannabis industry, you're going to need plenty of exclusive features that aren't available on generic POS systems. That's why one-size-fits-all cannabis payment software with a few functions is a waste of time and money. 

Here are 12 important perks that you should look for in your new dispensary payment software: 

Management Console

As your business grows, you will need the ability to operate multi-store management with ease. This requires an omnichannel POS that allows you to set up several locations and operate them from a centralized system. 

With a centralized management console, you will be able to:

  • Keep track of inventory.
  • Track customer profiles, return transactions, and order histories across all your cannabis stores.
  • Manage procurement with suppliers to ensure that there’s sufficient stock in allocations.
  • Set up loyalty rewards and discounts.
  • Check inventory throughout stores and consult customers right away from the POS interface.
  • Transfer products between stores and maintain stock at optimal levels in each location.
  • Perform inventory management with accurate inventory movement reports, adjustments, and stock taking.

Integrated Online Ordering

Your new POS should have an integrated online ordering feature. Without online ordering functionality, your staff will have to spend time entering orders received through phone calls into the dispensary POS. This opens the door for errors. 

But pairing the POS with online ordering allows your customers to order cannabis products through the website or mobile app. The orders are then printed automatically when received, and the budtenders can fulfill them right at the point of sale. 

Eliminating the manual entry of product orders into the POS system saves on time and labor. It also boosts order accuracy and customer satisfaction. And you can tailor your online product line to complement your store brand. 

Customer Profiles

Many customers pose the question, "What did I purchase last time?" to the dispensary owner or budtender. Of course, you can't really recall every product a customer has bought from your dispensary. 

Your new dispensary payment software should allow you to create customer profiles. You can save your customers' contact details and product orders.

And by creating customer profiles, you can quickly find out what a customer bought the last time they were inside your store. You can also advise them on new, exciting products to suit their needs based on their purchase history.

Ability to Set Up Loyalty Programs

Attracting new shoppers to your dispensary is great. But retaining your existing customers is more important.

Statistics from Stitch Labs indicate that returning customers contribute to around a quarter of a retailer's revenue. This is despite the fact that they account for less than 12 percent of all customers. Existing customers also spend more per order.

Like in other industries, cannabis dispensaries need to run loyalty programs to entice more customers. Customer loyalty programs reward repeat customers, which helps you keep a loyal customer base.

Find out if the POS system you're looking at can help to set up and run a customer loyalty program. You should also find out whether or not the loyalty program is customizable to fit the needs of your dispensary.

A good loyalty program should include features for:

  • Earning and redeeming reward points for purchases
  • Offering rewards based on the number of store visits, sign-ups, or dollars spent
  • Creating membership tiers, with higher tiers offering more discounts and rewards
  • Buying one vape cartridge and getting one free pre-roll, for example
  • Free priority shipping for orders over a certain amount of dollars

Check whether you can incentivize shippers for activities other than just purchasing from you. For example, you can reward shoppers for referring your dispensary to their family and friends.

Debit Payments

Achieving customer satisfaction is a critical aspect of establishing a successful cannabis retail business. This is why you should allow purchases through a card to provide a convenient payment option for your customers.

Imagine that your customer picks a flower or a vape cartridge and wants to pay with their card, but you don't accept debit payments. They would be extremely dissatisfied and might even leave without making the purchase.

Debit and credit cards account for 71% of all retail payments. This means that cashless payment options are popular with most customers. To meet this popularity, your new POS system should facilitate debit payments. Furthermore, customers who use their debit cards spend more in your store. If the POS system offers both debit payments and a trouble-free checkout process, that's a much better customer experience.

Besides the point of banking, other available payment options may include:

  • Debit to the penny
  • ACH
  • Cash

Custom Discounts

Customers are always keen on discounts when looking to buy a product. Thus, providing product discounts increases the frequency at which your customers shop at your dispensary. This translates to more sales and boosts your overall ROI (return-on-investment).

You should therefore look for a POS system that allows you to provide your customers with exciting custom discounts. Customers can apply the discount on each product line and on complete orders at the POS. For each custom discount, the reason should appear in the order line and receipt. 

SMS/MMS Marketing

Staying in touch with your customers is very important. Routinely touching base with your customers allows you to inform them about:

  • New product releases
  • Discounts and promotions
  • Special events

Text messages have a higher open rate than emails. So, go with a dispensary POS system that is integrated with an SMS/MMS marketing tool. This will enable you to contact any specific subgroup of customers, which ultimately translates to traffic and sales.

Marketing Automation

Your customer marketing efforts will only be successful if your texts and emails are timely and resonate with the recipients. That said, you can streamline your customer communications by implementing dispensary POS software that automatically sends messages depending on each customer's activities.

For example, if an online customer adds a product to their cart but doesn't complete the purchase, you can automatically shoot them an email encouraging them to return to your e-commerce store. Or if a number of your customers haven't purchased anything for some time, you can reach out to them with an offer.

Customer Queue

Nothing pains most cannabis retailers more than seeing their customers abandon their carts due to long queues at their dispensary. You can, however, address this issue by having a good queue management system in place. 

Queue management provides convenient and seamless customer service at your dispensary. This means that customers don't have to wait in a physical line. Instead, they can place their orders on a mobile POS tablet. Meanwhile, they can browse through what the dispensary has to offer while their package is being readied. In the process, they might be fascinated by another product, provoking a last-minute purchase. Once their order is ready, they are notified for pick up at the checkout. 

A good queuing system can ease walkaways by up to 75 percent, which leads to:

  • More shoppers
  • More revenue
  • More loyalty

Real-time POS Reporting

Good cannabis payment software must provide a crucial set of reports that offer real-time information on inventory status, store performance, and staff productivity.

With real-time POS reporting:

  • You should be able to check the sales and profits of your brick-and-mortar dispensaries. 
  • You can track the performance and movement of your inventory so you can determine the right time to order more. This allows your budtenders to respond to customer queries about the availability of a certain product. 
  • You can see the productivity of every employee and compare respective employees. 

Age Verification

Another important feature in a cannabis POS system is the age verification feature. This feature is particularly important because it eliminates guesswork and mistakes when budtenders are trying to determine if the customer has reached the legal age.

This lets you swipe the customer's ID or driving license and then automatically reads the magnetic swipe on the back. 

The POS system should display:

  • Customer's name
  • Date of birth
  • Age

The customer's details are time-stamped and securely stored in the POS system as evidence that your budtenders check customers' identification before service. The data for each scan should be readily available and easily exported from the POS software. This enables you to keep the age details of everyone that you've served in your dispensary for recordkeeping purposes. 

Traceability and Compliance

Marijuana sales are strictly regulated at the federal and state levels. The complexity of the laws surrounding the weed industry means that dispensary owners have to be very careful regarding compliance. If your dispensary contravenes these laws, you may incur hefty fines or even lose your retail license.

For example, if a 200mg pack of full-spectrum CBD gummies is nowhere to be found, you can't write it off as "theft" as if it's just a piece of candy. You must key in detailed information, including the batch number of the gummies. This begs the question, "What features does the best POS solution have that can help me remain complaint?" Here are some features that you should look out for:

Real-time Compliance Reporting

Most states require tracking of cannabis inventory and sales transactions via a state-sanctioned traceability system—for example, BioTrack or Metrc. Thus, the dispensary payment software should send compliance reports to the BioTrack or Metrc tracking system in accordance with state and local authority regulations.

State Compliant Purchases

Overselling comes with its fair share of compliance issues, the main one being that different states have varying product limits. Assume that your state has imposed a cannabis sales limit of one ounce per customer per day, and a customer orders two packs of gummies, a vape cartridge, half an ounce of pineapple express flower, and a couple of pre-rolls in a single transaction. 

In this case, your budtender would be expected to work out the THC concentration of the gummies, compare them with the volume of the strain, and determine if the sale is state compliant. Of course, the likelihood of error is high. 

This underlines the essence of choosing a dispensary POS system that can do these calculations automatically, assuring both the budtender and the customer that the purchase is compliant.


The POS system should send alerts to your budtenders if the customer's order is going to surpass a certain limit. Thus, non-compliant purchases can be quickly adjusted to satisfy state guidelines.

The Bottom Line

The cannabis industry is the new gold rush: cool, profitable, and aggressive. It is experiencing unprecedented rapid growth, with the sector projected to make even more sales in the future. 

However, the industry faces a banking challenge with cannabis still being a Schedule 1 substance under federal law. But a cannabis payment software system can help plug the gap. Essentially, it helps with processing cannabis transactions and managing inventory, among other core functions of your cannabusiness. 

While the mentioned tips are not exhaustive, they should provide you with a foundation to start your review of different POS systems, their features, and their expected impact on your cannabusiness over time.