Mastering the supply chain maze in the cannabinoid industry is no simple feat for retailers. You’ll need to know where products come from, how to get them out there in time for sale, and how to understand what consumers want. So, if you’re a retailer looking to dip your toes into this market, you’ll need a concrete plan to stay ahead of the curve.

This guide is here to walk you through the fundamentals of supply chain management, from seed to sale, tailored just for retailers in the cannabinoid market. We’ll provide tips and the smart moves you’ll need to keep up with this ever-changing landscape. 

What Is Cannabinoid Retail Supply Chain Management?

Supply chain management is the process of managing the flow of cannabinoids (and related products) into and out of your retail business.  A proficiently managed supply chain management serves two main business purposes.

First, it assists retailers in enhancing their supply-side operations. Effective supply chain management will help you avoid overstocking (and the related expenses of marking down or throwing away excess products) or the stocking of unpopular products. By doing that, it helps you reduce expenses, and operate more flexibly.

Secondly, effective supply chain management enables businesses to expedite the delivery of desired products to customers. Customers who always find the items they need develop a positive opinion of the retailer—fostering stronger, long-term partnerships.

What Does The Cannabinoid Supply Chain Management Involve for Retailers?


Good supply chain management will require planning. You’ll need to use sales data, market statistics, and other information to predict how much volume you’ll have throughout the year to satisfy customer demand without losing money on excess inventory.

For example, market data can help you plan ahead for new trends. Did you know that according to industry insights, the demand for certain CBD products, such as gummies or oils, might soar? Out of the CBD users surveyed, 48% mentioned using oils, making it the most commonly used CBD product.

Following oils, vape pens rank as the second-most popular choice among users, with 37% reporting their use. Ingestible products such as edibles and capsules come next in popularity among CBD users.

Planning ahead by stocking up can help pros meet this surge in demand. Essentially, this step is about anticipating the trends and making sure you’re prepared.

Sourcing Cannabinoids

When it comes to sourcing cannabinoids, retailers need to seek partners who can provide them with variety, reliability, and quality. Your product sources will build or undermine the reputation of your store.

Not all cannabinoid suppliers are created equal, so you’ll need to carefully choose suppliers that are in line with your values and the reputation you want for your store.  Are you trying to offer your local customs the best value? The best boutique quality? The latest, hottest cannabinoids before anyone else? Choose a supplier who has values in line with your own. 

For instance, retailers focused on quality should make sure their products are sourced from growers who follow strict guidelines. Quality-driven customers may be more likely to ask about growing processes, the use of pesticides, or other concerns. Producers who make this information available will leave retailers more prepared to answer these questions. 

This means the more informative the sourcing and extraction methods (solvent and non-solvent extraction), the happier your customers will be. You should also aim to be more transparent about the type of plant, common solvents like ethanol, or raw materials used.

This step is crucial as it dictates what lands on their shelves. Over 40% of CBD consumers say that they prefer purchasing their products from local retailers. That’s a big number and a clear sign that cannabinoid companies need a robust sourcing strategy to meet these demands. Retailers need to ensure the potency, purity, and overall quality of their sourced products to maintain a good rapport with their clientele.

Managing Storage/Warehousing

Managing the space you have available, and keeping the product within it in top condition is a major component of supply chain management. Doing it well allows you to maintain your stock more effectively, and avoid unnecessary waste.

The proper storage temperature for most cannabinoid concentrates is between 60-70 degrees Fahrenheit. This maintains their integrity, ensuring that the products customers receive are as fresh and potent as they should be.

Most CBD consumers prefer buying products that have been securely stored to maintain quality, potency, and effectiveness. The way you handle these products during their life cycle matters, from protecting them from light exposure to maintaining optimal temperatures.

Efficient storage also means adhering to various regulations within state lines. For instance in California, the packaging, repackaging, and labeling of cannabinoid products is permitted with a unique Type-P license. Proper warehousing is key to ensuring that the regulations and quality standards are met, building trust and loyalty among your customers.


The distribution of cannabinoid products needs to be synchronized across several locations. Did you know that over 66% of Americans prefer purchasing CBD or cannabinoid products in online retail stores?

Having efficient and varied distribution channels is key to streamlining your business. Adapting to changing consumer preferences is vital; as seasons shift, so do demands.

During summer, consumers might be more inclined towards topicals and edibles, whereas in winter there might be a spike for oils and tinctures. Understanding these market trends ensures efficient stock management and tailored distribution to meet consumer demands.

Why Do Cannabinoid Retailers Need Better Supply Chain Management?

To Reduce Costs

Cutting costs is a major goal of supply chain management. Cost savings can be achieved through all parts of the supply chain as you ensure that you order the right numbers of the right products, on the right timeline.

To Create Efficiency

Efficiency in operations is another ball game. With better supply chain management, the overall productivity in the retail chain skyrockets. This means customers have access to their products with less waiting (either at the store or online).

As per a Deloitte survey, 71% of shoppers view information regarding product origin, labeling, shipping updates, and estimated delivery times as crucial elements influencing their buying choices.

To Ensure Stable Inventory

Approximately 32.4% of people prefer to buy their CBD or marijuana products from a dispensary, with the subsequent preference being online purchases, directly from CBD brands (30.5%), driven mostly by social media.

So, ensuring you always have what your customers need is crucial. Stable inventory management not only keeps loyal customers happy but also keeps those sales numbers rolling in!

How Can Cannabinoid Retailers Improve Supply Management?

Improve Product Tracking

Inventory data inaccuracies lead to a significant impact, causing a loss of approximately 8.7% of retail sales. Approximately 34% of businesses have encountered situations where they’ve unintentionally sold a product that was unavailable in their inventory, resulting in delayed order shipments, shortages, and upset customers.

Integrating state-of-the-art tracking systems isn’t just about efficiency; it’s a gold mine for saving resources. That’s less cash tied up and more flexibility in what’s needed.

Implement Automation

Automation (which is quite common among retailers can help to significantly reduce costs). This is because machines are used to handle large-scale data entry, optimize routes, to sort and pack customers’ orders. This means that the process is more efficient with minimal human error, saving you time and money.

Retailers who’ve jumped aboard the automation train witnessed a massive boost in productivity. That means less time chasing inefficiencies and more on thriving in your core business.

As indicated in a McKinsey report, employing automation could potentially assist suppliers in cutting lead times by around 50% and reducing inventory quantities by 20-50%. This technological integration also enhances precision and boosts order fulfillment rates. That’s dollars back in your pocket, plain and simple.

But the kicker? Customers are happier. Automation has been shown to boost customer satisfaction by 20%. That’s the vibe of efficiency flowing from the shelves to the shopping carts.

Stock Better Products with THD Wholesale

Ensuring your store is filled with top-notch products is critical in the cannabinoid industry. When you choose us as your wholesalers, you’re set to stay ahead of the competition. We offer a curated lineup of products designed to improve your inventory.

Our selection prioritizes quality assurance and variety. Your shelves will be packed with some of the best products and your customers will love the refined vibe. It’s time to offer products that make you the go-to stop for the ultimate cannabinoid shopping experience. Check out our shop today!