Margins in cannabis are tighter than ever—and yet, many operators are leaking money they can’t afford to lose.
Most cannabis companies are leaking 10–15% of their indirect spend—and they don’t even know it.
Not because they’re making bad decisions.
But because they don’t have visibility into how money is actually being spent.
What Is Indirect Spend—and Why It’s Costing You
Indirect spend includes everything your team buys that isn’t flower or extraction-related: packaging, facility supplies, office equipment, cleaning services, and more.
This category is often overlooked, but it can make up 10–20% of total operating expenses. Without a process in place, this spend becomes chaotic:
- POs live in email threads
- Employees use personal credit cards
- Budget approvals happen (or don’t) in Slack
- Finance chases down invoices manually at month-end
The result?
No one knows how much is being spent, by whom, or with which vendors.
💸 Most Companies Are Leaking 10–15% of Indirect Spend
That stat alone should be a red flag. But it’s not always visible in a P&L. It shows up as:
- Higher-than-expected COGS
- Inventory over-ordering
- Vendors quietly raising prices
- Delays in month-end close
- Margin erosion that’s hard to explain
One cannabis MSO reduced monthly indirect spend by 14% in just 60 days—simply by consolidating vendors and enforcing digital approvals.
They didn’t cut headcount.
They didn’t switch products.
They just fixed the process.
Spot the Red Flags
Not sure if your team is overspending? Start by asking:
- Are POs tracked in a centralized system?
- Can Finance see spend by location or department—in real time?
- Do you have approved vendors and pricing locked in?
- Are invoices matched automatically to POs?
If the answer is “no” or “not really,” there’s a good chance you’re losing money in the gaps.
The Problem: Patchwork Procurement
Most cannabis teams didn’t build their procurement systems on day one. They grew fast—adding locations, SKUs, vendors, and people—without adding the processes to manage spend at scale.
Here’s what that typically looks like:
Patchwork Process
- POs in email
- Approvals delayed or bypassed
- Vendor pricing varies by buyer
- Manual invoice matching
- Finance + Ops out of sync
Centralized Procurement
- POs in a single system
- Automated approval workflows
- Consistent pricing across locations
- One-click reconciliation with accounting
- Shared source of truth
What Better Looks Like
Operators who have cleaned up their procurement process are now seeing measurable ROI.
They’ve implemented systems that:
✅ Centralize all purchasing in one place
✅ Automate budget enforcement and approval flows
✅ Sync directly with QuickBooks, Xero, or Sage
✅ Track real-time spend by vendor, location, and category
✅ Streamline communication between Finance, Ops, and Procurement
The result?
Smarter spend. Cleaner books. More time back.
Try the ROI Calculator
Want to see how much you might be overspending?
We built a quick, free ROI calculator designed for cannabis operators.
Just plug in your monthly spend and number of locations—you’ll see projected savings in seconds.
No email required. Just real numbers, fast.
Final Thought
In this market, every dollar counts. You can’t afford to let silent inefficiencies drain your margin.
You don’t need to cut headcount or sacrifice quality—you just need better systems.
If you’re ready to stop guessing and start optimizing, it starts with visibility.
Because the money isn’t always lost in big moves.
Sometimes, it’s leaking out the back quietly—line item by line item.
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