Do you know how much product loss you experience in a given week, month, year?
California cannabis retail operators are required to do full inventory counts at a minimum of every 30 days to make sure your physical dispensary inventory matches with your point of sale inventory and Metrc inventory. In California, you're required by law to know your monthly inventory discrepancy percentage and keep it under 5 percent.
While California regulations require inventory reconciliation at least once every 30 calendar days, we recommend conducting cycle counts much more frequently to keep your inventory organized and accurate, both physically and digitally, pairing it with a consistent FIFO (first in, first out) rotation so older product always sells first.
A Cycle Count is when a retail shop physically counts all of the inventory in their possession to compare what your inventory system THINKS you have with what's actually there. In a perfect world, those numbers always match exactly, but in reality that's rarely the case due to inventory shrinkage.
The only way to find discrepancies between your assumed inventory numbers and actual inventory numbers is to do a full count of all physical products.
>>Learn more about FIFO and dispensary inventory rotation
Cycle Counts is a feature that’s already included with Meadow, and we’ve seen it dramatically reduce theft and loss, ensure the right product mix on shelves, and smooth the transition to Metrc.
Here are some of the key features of our Cycle Counts tool:
- Barcode scanning synced to an iPad or laptop for super fast and accurate counts.
- Count while you're open using our 'Conflicts' tab, which identifies any changes in inventory (i.e. if someone sells a unit while you are counting inventory, you can easily adjust for the sale).
- Easy delegation with allowances for multiple employees to do counts simultaneously.
- Immediate loss/theft detection that notifies you of any discrepancy with your expected inventory.
- Metrc optimization with drop-downs for counting within Metrc packages.
- Other smart features, including: notes to record if a product was lost, found, damaged, moved, etc; manager review and approval settings; and summary reports with missing products and conflicts.
Want to see how Cycle Counts works in a real dispensary workflow? Book a personalized Meadow demo to see how teams complete inventory counts faster, catch discrepancies sooner, and stay compliant with California track-and-trace requirements.
Another reason we always recommend using the Cycle Counts tool is because accurate inventory reconciliation is essential for California track-and-trace compliance. Under the California Department of Cannabis Control (DCC) Track and Trace regulations, a "significant discrepancy in inventory" is defined as a 5% difference between a licensee's physical inventory and the inventory recorded in Metrc. Regular cycle counts help identify discrepancies early, improve inventory accuracy, and reduce the risk of compliance issues or a DCC audit.
If a significant discrepancy is identified, the licensee is required to notify the DCC within 24 hours. Failure to identify and report any inventory discrepancy over 5% will put you up for greater scrutiny and increase your chance of a painful audit. If you are not regularly counting your inventory, the percentage of discrepancy will likley become higher with time. To stay ahead of this, regularly count your inventory and report any discrepancies in a timely manor. If the discrepancy is not reported, you could risk losing your license. So, let’s put the safeguards in place to avoid these scenarios!
The easiest way to reduce inventory discrepancies is to make cycle counts part of your regular workflow. Schedule a demo to see how Meadow helps dispensaries perform faster counts, reconcile inventory with Metrc, and stay audit-ready.
