First In, First Out (FIFO) is an inventory management best practice to ensure that the oldest inventory gets sold first.
Because cannabis products do have expiration dates, it's important that your entire staff knows how to follow the FIFO method to reduce waste and prevent products from spoiling on your shelves. Most testing laboratories’ display the product expiration date on the Certificates of Analysis, typically six months after the date of analysis.
Staying Metrc-compliant means never physically mixing product batches, which makes a clear cannabis inventory management workflow essential, and it's worth knowing what Metrc reporting actually requires before you build your process around it.
Following dispensary inventory management best practices starts with proper labeling and consistent package rotation, so the oldest inventory always sells first. This is the FIFO (first in, first out) method, and it's one of the simplest ways to reduce waste and stay compliant.
>> Learn more about dispensary cycle counts
After receiving products, follow these steps:
- Label each package with the date received and the sell-by date on the outside of the box.
- Attach the corresponding blue Metrc UID tag so you can identify the package at a glance.
- Organize boxes so newer products go to the back and older products stay in front, ready to go out the door first.
Each dispensary has different inventory requirements and inventory must be received and stocked differently in each store plan.
FIFO for Counter/Traditional Dispensary Models
In the Counter/Traditional store model, inventory is kept in display cases that customers shopping in store can view. The newest product must go closest to the customer in the display case so your salesperson pulls from the back and doesn't have to reach in and pick the wrong product from the wrong package.
FIFO for Back of House Fulfillment
All inventory is kept in the back of the house and you can have a really organized, easily audit-able inventory that is easy to pull from and you're able to get orders together quickly. FIFO is a breeze in this setup.
FIFO for Open Floor Dispensary Models
In the open floor dispensary model, it gets even more tricky if you're keeping some live product on the floor and some in back of house; ideally everything is kept in back of the house and orders are put together in a dedicated staging area, but sometimes operators want to keep some live product on shelves. Multiple locations add a layer of complexity to operations; make sure you have clear SOPS so your team knows how to keep track of inventory with this model.
SWED, a high-volume LA dispensary, uses this exact structure to manage inventory at scale, separating regular stock, staff samples, promotional units, and display inventory across locations to keep counts accurate as they scale.
Managing multiple inventory locations with Meadow is easy; you can easily track products across different physical locations (ie. Sales Floor, Flower Room, and The Vault). It also enables you to set up more than one sales channel so you can differentiate between inventory for orders made via your website (for Pickup and Delivery) or at point of sale (in store).
Frequently Asked Questions
What is FIFO in dispensary inventory management?
First In, First Out (FIFO) is an inventory management best practice that ensures the oldest inventory in stock gets sold before newer inventory. For dispensaries, this means organizing product so packages received first are the first ones sold, reducing waste and keeping inventory moving in the right order.
Why is FIFO especially important for cannabis products?
Cannabis products have real expiration dates, and most testing laboratories list that date on the Certificate of Analysis, typically about six months after the date of analysis. Without a FIFO process, older packages can sit on shelves while newer ones sell first, increasing the risk of product expiring before it's sold.
How long do cannabis products typically stay fresh before expiring?
Most testing laboratories set the expiration date at around six months from the date of analysis, as shown on the Certificate of Analysis. Actual shelf life can vary by product type and storage conditions, so check the COA for each batch rather than assuming a fixed timeline.
How does FIFO work differently across store layouts?
FIFO looks different depending on your store model. In a counter/traditional layout, newer product goes to the back of the display case so budtenders pull the oldest items first. In a back-of-house fulfillment model, FIFO is easier to manage since inventory is centralized and organized for quick, accurate order assembly. In an open floor model, where some product lives on the shelf and some in back of house, FIFO takes more coordination, clear SOPs help ensure staff always pull older stock first, regardless of where it's stored.
Staying on top of FIFO, labeling, and Metrc reconciliation by hand gets harder as your inventory grows. Meadow syncs every package to Metrc in real time and flags discrepancies before they become a compliance problem.
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