Inventory insights: Understanding slow moving products & trends

Team Headset
April 14, 2022
 min read
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There are clear financial impacts to both brands and retailers when inventory levels are not properly managed. Some retailers, for example, have too many weeks of product on hand leaving thousands in capital tied up on a shelf. Other retailers may have too little stock of popular products, leading customers to purchase from competing brands. Wouldn’t it be great if brands and retailers had a way to identify these issues and work together to find solutions before problems occur? This is why at Headset, we recently released our new Bridge Marketing Module, which not only allows brands and retailers to work together and connect on inventory management, but also to learn more about the customers coming into stores, how to target these customers to free up capital, and analyze marketing campaigns as well. This report takes a deep dive into some of the new tool’s many capabilities in inventory and customer analysis, with a close look at inventory trends in stores across the US and Canada. As always, there are a lot of insights to cover, so let’s dive in!

Executive summary

Examples of improper inventory management can be seen in stores in both the US and Canada. For example, in a recent period some retailers in Michigan have had over 10 weeks of inventory on hand in their back room. When we explore inventory at the category-level in Michigan, we find that median retailers in this market have had up to 16 weeks of Flower product on hand. If the ideal level of inventory is four weeks on hand, that means that the median retailer in Michigan has about $76,944 in potential profits and product waiting to be consumed. On the other hand we found that other markets, like British Columbia, have some retailers with limited inventory, which could drive consumers to purchase other products that are fully stocked on shelves. Read on to learn more about inventory trends in the US and Canada as well as solutions to stay ahead of some common inventory issues.


Data for this report comes from real-time sales reporting by participating cannabis retailers via their point-of-sale systems, which are linked to Headset’s business intelligence software. Headset’s data is very reliable, as it comes digitally direct from our partner retailers. However, the potential does exist for misreporting in the instance of duplicates, incorrectly classified products, inaccurate entry of products into point-of-sale systems, or even simple human error at the point of purchase. Thus, there is a slight margin of error to consider.

In this report we examine sales from Headset Insights markets. Unless otherwise noted, this includes CA, CO, MI, NV, OR, WA in the US and AB, ON, BC, SK in Canada.  We present all data in local currency and do not make adjustments for currency fluctuations.

We calculate weeks of inventory on hand as the number of weeks it would take to sell through all the inventory currently available (at current sell-through rates) without replenishment. This is calculated as Total Units in Inventory / Total Units Sold in Prior Week. The median retailer is determined by the weeks of inventory on hand across retailers in a given market for the specified period (e.g., the median retailer for a given week). Profit Value was calculated using the average item price less average item cost in a given market during the specified period.

Slow moving inventory trends in the US

Slow moving cannabis products and trends image 1: Slow moving inventory trends in the US

Let’s start this analysis by first gaining an understanding of what the general inventory trends are in the US. Here our metric of interest is the weeks of inventory on hand, which tells us the number of weeks that it would take for the state’s median retailer to sell through all of the inventory currently available in stores (at current sell-through rates), without replenishment.

We see that the median retailer in California, Nevada, and Washington have fairly consistent inventory levels, ranging from 4.7-5.9 weeks on hand in the most recent period. Conversely, the trend in Oregon and Michigan fluctuates fairly widely over time, with the most recent period showing 12.4 and 10.3 weeks of inventory on hand, respectively.

Why is this important? This data shows how much excessive inventory retailers are carrying. For retailers, this means capital is tied up on shelves in the back room. For brands, this means products aren’t reaching consumers. The Bridge Marketing Module allows brands to work with retail partners to ensure products are appropriately stocked and to take action when they are not.

Slow moving inventory trends in Canada

Slow moving cannabis products and trends image 2: Slow moving inventory trends in Canada

Now let’s look at inventory trends in Canadian markets. Compared to retailers in the US, we see slightly lower levels of inventory in Canadian retailers. In Alberta, Ontario, and Saskatchewan, we see a consistent trend (between four and five weeks on hand) that aligns with what is measured in California, Nevada, and Washington markets in the US on the prior graph.

However, you’ll notice that the median BC retailer begins to decline in weeks of inventory on hand in the beginning of February, bottoming out around 2.7 weeks on hand towards the end of March. Previously in Oregon and Michigan we saw an excess of inventory levels, here British Columbia shows limited inventory. The issue with limited inventory carry is the potential for a brand to lose out on potential revenue and profit, which could be directed to other brands that are in stock at the retailers. Next, let’s look at category inventory levels to better understand the drivers of both excessive and limited inventory levels in British Columbia, Michigan, and Oregon.

Category breakdown of inventory in cannabis retail

Slow moving cannabis products and trends image 3: Category breakdown of inventory trends

This graph takes a closer look at the category-level drivers of inventory levels in British Columbia, Michigan, and Oregon. Earlier, we saw that the median retailer in British Columbia had limited inventory levels. Here, we see that Flower (2.1 weeks), and Pre-Rolls (2.2 weeks), are the primary drivers of the limited inventory levels. The Bridge Marketing Module would enable a Flower brand in BC to ensure their products have sufficient inventory to prevent stock-outs before they occur.

We saw that the inventory levels in Michigan and Oregon were two to three times higher than in comparable states. The category data in this graph above tells us that median retailers have between five and 10 weeks of inventory on hand in most categories, but Flower appears to be the main driver in both markets, with the median retailer in Oregon showing almost 34 weeks of Flower inventory on hand and 16 weeks in Michigan. The Bridge Marketing Module can help Flower brands work with retailers to identify where their products are overstocked in order to get them moving and purchased.

The financial impact of having too much Flower

Slow moving cannabis products and trends image 4: Profit value of Flower in inventory

In the previous graphs, we identified that the Flower category was a significant driver of limited and excess inventory levels. In this graph, we see the profit value of one week of inventory carry for the Flower category. This will help us to further understand the potential profits left on the table due to a shortage or locked up on shelves due to excess stock.

We saw that the median retailer in Michigan had about 16 weeks of inventory on hand for the Flower category. If we assume that the ideal level of Flower inventory is four weeks, then we would say that the 12 weeks of extra inventory is worth approximately $76,944 in potential profits ($6,412  multiplied by 12 weeks). This data begs the question, if you’re a brand, are you potentially leaving profit on the table due to inventory management?

Customer analysis - Who is buying your products?

Slow moving cannabis products and trends image 5: Customer analysis

Now that we’ve covered the impacts of inventory management on brands and retailers, let’s turn to another area of the Bridge Marketing Module that can help you better optimize your business: customer analysis.

This graph shows the total market sales share by age group and gender during March 2022. We can see how much variation there is in each individual market, underscoring the importance of knowing your customer base in order to develop, market, and sell products that fit the demographic profile. For example, brands operating in Ontario should know that the province has a much higher share of sales to Gen Z and Millennial consumers than any market in the US.

Understanding gaps in your customer base

Slow moving cannabis products and trends image 6: RFM segmentation

Now let’s go one step further with customer analysis and explore RFM segmentation, which enables us to see which customer groups drive sales of products using an RFM model. RFM stands for recency, frequency, and monetary value. Customers are given scores based on how long it’s been since they last visited a store (recency), how often they have visited the store in the last 365 days (frequency), and their total spend in the last 365 days (monetary value).

This graph shows customer data across 264 stores over the past year in Washington and how sales across the stores are categorized in the RFM model. Visitors made up 26.4% of customers in the last 12 months while only driving 3.3% of sales. Conversely, Champions (the most loyal customers), account for only 9.7% of customers but drive almost 40% of sales. This demonstrates the importance of understanding your customer base so that you can stock your products more effectively. Brands can access this segmentation in the Bridge Marketing Module on an aggregated or individual store level, allowing for deep insight into how subsets of their customer base drive revenue.


Retail operations are complicated, we know this! The Bridge Marketing Module simplifies a critical function of the business by enabling brands to work directly with retail partners to identify issues with inventory and develop methods to target the right customers to buy those products. To learn more about the Bridge Marketing Module and how Headset tools can help optimize your business, sign up for a demo.

Key takeaways

  • Retail inventory levels vary by market and have unique trends. In the US, we see more pronounced overstocking of stores, particularly in Michigan and Oregon, and in Canada we see the opposite, specifically in British Columbia.
  • There are clear financial impacts to both brands and stores when inventory levels are not appropriately managed, resulting in lost profit for both parties.
  • Brands have unique demographic customer compositions that can vary even by the individual store in which their products are sold. It is important for brands to understand who is purchasing their products and where they are purchasing them in order to effectively market products.
  • Not all customers are valued equally; brands should seek to understand which RFM customer segments drive revenue and market accordingly.
  • The Bridge Marketing Module enables brands and retailers to effectively manage inventory, plan for periods of high demand, target high value customers, and analyze marketing campaigns.

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Team Headset
April 14, 2022
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