Running a Dispensary Inventory Audit from Start to Finish

Spot Check vs. Full Audit: When to Do Which

A spot check is a quick count of 5-10 SKUs against your system's on-hand quantities. Do these weekly. They take 20 minutes and tell you whether your processes are working.

A full audit is a complete count of every item in your inventory. Do a full audit quarterly at minimum — monthly if you have persistent discrepancies or a state audit approaching. Spot checks tell you if you have a problem. Full audits tell you where the problem is.

Preparing for the Full Count

How you set up the count determines how useful the results are. A poorly set up audit produces numbers you cannot trust.

• Schedule immediately after close, before the next day's receives — you want a clean inventory snapshot
• Freeze the system: no sales, receives, or adjustments during the count
• Assign two-person teams to each section — one counts, one records; never allow a single person to both count and record
• Sections: flower vault, pre-rolls, edibles, concentrates, accessories
• Print count sheets with SKUs and UIDs but without expected quantities — you want a blind count

The Count Process

Start from a fixed point and move systematically. Never skip around or count sections out of order.

• Count every unit in your section — for flower, weigh each package, do not estimate
• Record on count sheets by UID and weight or quantity
• When your section is complete, hand count sheets to the supervisor
• Supervisor compares to system quantities and flags discrepancies
• Any item with a discrepancy outside your tolerance gets re-counted by a different team

Reconciling Discrepancies

After the count you will have three categories of results: zero variance (move on), minor variance within your tolerance (document, adjust if needed), and major variance outside tolerance (requires investigation before any adjustment).

For major variances: trace the product's transaction history. When was it last counted accurately? What transactions have touched it since? You are looking for the specific event where the discrepancy was created — a receiving error, an unlogged sale, an incomplete transfer. Investigate before you adjust. An adjustment without a root cause hides the problem for one more quarter.

Making Shrinkage a Line Item

Every retail operation has shrinkage — product lost, damaged, or unaccounted for. The difference between a well-run dispensary and a poorly-run one is not whether shrinkage exists. It is whether it is measured.

Calculate your shrinkage rate: (value of unexplained inventory loss ÷ total inventory value) × 100. A well-run dispensary should be under 0.5%. Above 1% means a process problem. Above 2% may indicate a personnel problem.

Track by category. Flower shrinkage looks different from edible shrinkage looks different from concentrate shrinkage. Patterns by category point to specific process failures — which means specific fixes.