On April 20, 2024, an annual major cannabis sales day, Dutchie, a popular point of sale (POS) system used by cannabis dispensaries, left approximately 6,000 U.S. and Canadian retailers and shoppers in the dark for hours. This all occurred due to a system crash, marking the second year in a row an outage occurred.
Numerous dispensaries posted their frustrations, disappointments, and hardships on social media. Some of the 6,000-plus operators that experienced outages said that they were left helpless, customers were angry, and sales were lost. Some compared the 4/20 troubles to a major retailer like Walmart or Amazon experiencing an outage on Black Friday.
With holidays like Canada Day, Fourth of July, and 7/10 all fast approaching, what can e-commerce and POS systems do?
State-by-State Regulatory Changes
Unlike other industries, cannabis continues to face challenges in legality that create unique industry issues, such as processing transactions.
“Cannabis-marijuana transactions come with layers of compliance that other industries don’t have. For example, a clothing store’s point of sale system may not include extras like age verification, local laws, or purchase limits,” said Ryan Zens, CTO of cannabis retail platform Cova Software.
He points out that cannabis legality varies by state, and each has its own set of laws and regulations. For example, a cannabis POS system in Florida differs from one in Oklahoma. Though both are legal medical cannabis states, they have different laws on parameters like purchase limits.
Causes of a Point of Sale Outage
Point of sale outages happen to approximately 81% of businesses at least once a year. The incidents are linked to internet or cloud server outages, hardware issues, power outages, bugs, and data breaches.
When POS outages occur, business is lost. Where traditional retail has the freedom to use alternative methods to collect payment when outages happen, those methods are usually not available to process a cannabis transaction. The lack of alternative methods is typically due to legality and regulations.
Volume Testing to Avoid a POS Outages on High-Volume Days
While there are differences within industries and laws by state, all POS systems must be able to handle all levels of volume. Outages due to volume aren’t typical in traditional retail, and many agree that they shouldn’t occur in the cannabis industry.
Zens said 4/20 is high volume, but not as high as when the iPhone 15 was released.
“Not only do you need to retain all of your sales information for reporting purposes, but you need a system that can handle large amounts of traffic, even on 4/20,” he said. Canada Day, the 4th of July, and 7/10 are the next cannabis celebrations with expectations for high traffic in the United States and Canada.
Volume testing is a proactive approach to avoid issues seen on 4/20. Zens said the importance of designing, building, and testing for high volume and, from a failed standpoint, is key for POS system providers.
“Imagine a big retailer having a point of sale outage on Black Friday because their system couldn’t handle volume on a day known to be a traditional high volume day.”
He said that designing the system expecting pieces of it to fail may seem counterintuitive, but this mindset allows the system to be designed so that it is resilient in the event of any failures.
“Technology teams should continually monitor, test, and improve systems so that there are no surprises on high volume days,” said Zens.
Photo by Max Chen on Unsplash
