Cannabis Procurement Has a Problem

What is the most important role in the cannabis industry right now? I can answer that pretty easily. Cannabis Procurement.

No matter what state you’re in, no matter where you are in the build, the person doing the buying is the person who makes or breaks everything else. The real ones know what I’m talking about.

I’ve spent the last three years doing HR and people operations for cannabis operators across legal U.S. markets. I’ve watched this role go from an afterthought to the most critical seat at the table. And I’ve also watched it become one of the most dangerous seats in the building when the wrong person is in it and nobody is paying attention.

But before we get to the uncomfortable part, let’s talk about why cannabis procurement matters so much in the first place. Because if you don’t understand the weight this role carries, you won’t understand why leaving it unchecked is such a massive problem.

The Buyer Runs the Business. Most Operators Don’t Realize It Yet.

Let’s look at the numbers. Cannabis CFO benchmarks put gross margins for a well-run dispensary at about 45% to 55%. That sounds healthy until you factor in 280E, the federal tax provision that prevents cannabis businesses from deducting ordinary operating expenses because the plant is still Schedule I. After 280E, effective tax rates for cannabis operators can hit 60% to 80% of pre-tax income. True net margins for most dispensaries land somewhere between 5% and 15%. Some are cash-flow negative even when they look profitable on paper.

The average dispensary does about $2 million in annual revenue. Fewer than 25% of cannabis operators in the U.S. reported being profitable in recent surveys. In that environment, every single purchasing decision has a direct line to whether the business survives or doesn’t.

Every Decision Hits the Bottom Line

Every SKU on the shelf is either making money or bleeding it, and every vendor relationship either strengthens the operation or drains it. The buyer is the person making those calls day in and day out. They’re deciding what products come through the door, what price the company pays, what sits on the menu, and what gets rotated off. On top of that, they’re managing supplier relationships, negotiating terms, forecasting demand, and trying to keep shelves stocked without over-ordering into dead inventory that tanks margins.

Cannabis procurement is not a clerical function. It’s market intelligence and relationship management rolled into one. The role demands forecasting in an industry where reliable data is still being built, with compliance baked into every transaction. And it is one of the most direct levers an operator has for protecting profitability.

Industry data paints the picture. Retail inventory research estimates that retailers lose roughly 4% of revenue to out-of-stock issues and another 3% to overstock. On a dispensary doing $2 million a year, that’s $140,000 in preventable losses tied directly to purchasing decisions. Layer on shrinkage, which averages around 2% in cannabis retail and can trigger compliance violations on top of financial losses, and the cost of poor inventory management stacks up fast.

The buyer controls all of this. Whether your top-selling strain stays on the shelf or goes out of stock for a week. How much dead inventory you’re sitting on as edibles approach expiration. And whether your menu reflects what your customers want or what a vendor pushed hardest to sell. That’s power. And in cannabis, that power is rarely matched with the oversight it deserves.

Different Markets, Same Answer. Cannabis Procurement.

The markets opening right now are not the mature, oversupplied markets where product is everywhere and the buyer’s job is curation. The markets opening right now are constrained. Supply is the problem.

Minnesota: Not Enough Product

Take Minnesota. There are roughly 40 retail locations and only a handful of authorized wholesalers supplying the legal market. Wholesale prices have topped $4,000 per pound, and experts project the shortage runs into 2027. The state’s Office of Cannabis Management says it needs 1.5 million square feet of cultivation canopy to meet demand. It has a fraction of that. Meanwhile, independent dispensary owners are laying off staff and considering selling their businesses before they even get the chance to stock their shelves.

In that environment, the person who knows how to find product, build supplier relationships fast, and secure inventory before the next store opens down the street is the most valuable person in the building. The Beyoncé of the organization.

Massachusetts: Too Much Competition

Massachusetts is a different problem with the same answer. The market is mature, competition is brutal, and the numbers tell the story. The state has over 400 retail locations and the average price of an ounce has collapsed from $416 to around $125 since 2020, a drop of more than 70%. Revenue plateaued at roughly $1.65 billion in both 2024 and 2025 even as the number of transactions grew. Two dozen companies were in court-appointed receivership as of early 2026. Cultivators are reporting that dispensaries aren’t paying their invoices on time, or at all. One Massachusetts Cannabis Control Commissioner said publicly that the state needs to “hit the brakes” on new cultivation licenses.

In a market that compressed, the difference between a dispensary that retains customers and one that doesn’t often comes down to whether the buyer built a menu that’s differentiated. Anyone can stock the top 10 SKUs. The buyers who understand their customer base, know which craft cultivators are worth the relationship work, and can negotiate terms that keep margins intact? Those are the ones moving the needle. And in a state where cultivators are literally going unpaid, the buyer’s choices about who to partner with, how fast to pay, and which products to prioritize carry weight that goes far beyond the four walls of the dispensary.

Whether it’s scarcity or saturation, cannabis procurement is the role that determines how the rest of the operation performs. And that level of influence comes with a level of power that most cannabis companies are completely unprepared to manage.

With Great Power Comes Great… Opportunity for Abuse

This is where the conversation gets uncomfortable. And it needs to be said out loud.

Cannabis procurement has a quid pro quo problem. I’ve seen it firsthand and heard about it from operators across multiple markets. Inside companies that had no idea it was happening, I’ve investigated it after the damage was already done.

What It Looks Like on the Ground

I’ve seen buyers ask manufacturers for gift cards in exchange for shelf placement. I’ve watched them expect dinners, Celtics tickets, concert access, and standing invitations to every industry event on someone else’s dime. Free product that’s meant for the whole team to sample and learn from, quietly pocketed by one person and never shared.

This is not rumor. I’ve witnessed it. And the worst part is that a lot of the time, the owners had no idea. These weren’t directives coming from the top. These were managers and buyers sitting in roles with enormous power and zero oversight, making side deals nobody was tracking.

I recently surveyed cannabis industry professionals about the buyer role, and the responses confirmed what I’ve been seeing on the ground. One sales rep in the Northeast put it bluntly:

“People want to be bought. Butter them up with dinner, swag, products, and you’ll give them that and they’ll still stop responding. It’s bribery. Small companies don’t have the funds to do what MSOs do.”

Another respondent working across the Northeast and Midwest was even more direct:

“Lack of oversight allowing rampant bribery outright.”

This kind of corruption exists at every level of cannabis. In Massachusetts alone, the former mayor of Fall River faced federal charges after business owners allegedly paid $600,000 in bribes to secure his support for marijuana license applications. In 2025, the Suffolk County Sheriff was arrested on federal extortion charges for pressuring a cannabis executive for $50,000. Those cases made headlines because they involved public officials. But the day-to-day purchasing corruption happening inside dispensaries between buyers and vendors? That barely gets talked about. And it is widespread.

From Slotting Fees to Side Deals

Some of this has a name in other industries. Slotting fees, where brands pay $500 to $50,000 a month for premium shelf placement, have spread across cannabis markets in California, Nevada, Michigan, and beyond. Washington state banned the practice outright. Ontario launched a “Cancel Kickbacks” campaign targeting producers paying retailers for shelf space disguised as data purchases. These are the formalized versions of pay-to-play. What I’m talking about is even messier: the informal, under-the-table, person-to-person extraction of personal favors from vendors by individual buyers who know nobody is watching.

This wasn’t even something I conceptualized as a risk until I saw it happen firsthand. I couldn’t imagine doing that to someone. The idea of leveraging my position to squeeze personal favors out of a vendor, especially a small cultivator who is grinding it out just to survive in this industry, makes me feel like trash.

Small cultivators and manufacturers do not have the budgets for this kind of pay-to-play.

They don’t have marketing slush funds or “entertainment” line items. For some of these operators, a gift card is the difference between making payroll or not.

MSOs and larger brands get hit with the same requests. The difference is they might have deeper pockets and more ability to absorb the cost. They also tend to have less oversight of their people. More locations, more buyers, more opportunity for this behavior to go completely unchecked. The power dynamic in cannabis procurement is real, and when supply is tight or margins are razor-thin, that power only concentrates further.

One vendor I surveyed captured the frustration of being on the other side of this dynamic:

“Answer a f***ing email. Even saying no is better than no response. I’m fighting for my life with these people begging for any sort of response.”

That’s the reality for the brands trying to get on shelves.

Build the Infrastructure Before Cannabis Procurement Costs You More Than it Should

The reason this keeps happening is that cannabis companies are not building the infrastructure to prevent it. This is an HR problem, a compliance problem, and a regulatory problem all at once. And the fix is not complicated. It just requires someone to care enough to put it in place.

Every cannabis operation with a procurement function needs a written procurement ethics policy. Not a vague “use good judgment” line buried in the handbook. A real policy that clearly defines what buyers can and cannot accept from vendors. Specific dollar thresholds. Specific prohibitions around gift cards, meals, tickets, event access, product. Transparency International’s anti-bribery guidance recommends monitoring contracting decisions and transactions specifically to identify collusion between purchasing staff and vendors. Cannabis should be no different.

How do you manage it?

A Call to Regulators

I would love to see cannabis commissions across the country take a hard look at this. We talk endlessly about licensing integrity, testing standards, and seed-to-sale tracking. Those matter. But the day-to-day purchasing behavior inside retail operations is a massive blind spot. When a buyer can demand personal compensation from a brand in exchange for shelf space and nobody catches it, the entire supply chain suffers. Small operators get squeezed out. Consumer choice narrows. Companies close. The people who play fair lose.

State commissions could issue guidance and require operators to maintain cannabis procurement ethics policies as a condition of licensure. Creating a channel for vendors to report coercive purchasing practices without fear of retaliation would go a long way. None of this is revolutionary. These frameworks exist in government contracting, in healthcare, in every industry where someone with purchasing power can exploit it. Cannabis just hasn’t built them yet.

The procurement role is too important and too powerful to leave unmanaged. It is the backbone of every cannabis operation. It deserves the investment, the oversight, and the respect that comes with that level of influence.

If you’ve experienced this, seen it, or dealt with it in your own operation, I want to hear from you. This conversation is long overdue.

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Kim Bruen is the Founder and CEO of Zen Den Co., a fractional HR and People Ops firm serving cannabis and psychedelics operators across all legal U.S. markets.