LeafLink, the top cannabis wholesale platform in the U.S., has just introduced an innovative payment option called Payment on Sell Through (PoST).
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This groundbreaking option is designed to guarantee payments to cannabis brands as retailers sell their products. With PoST, LeafLink now offers three payment options in total, joining their Direct Pay and FlexPay services. This new feature comes on the heels of LeafLink's acquisition of Dama Financial in July, giving customers access to secure and compliant banking solutions. Together, these moves aim to create a more efficient cannabis e-commerce ecosystem.
So, how does PoST work? It guarantees automatic weekly payments to the supplier based on how much product the retailer sold in the prior week. This is a huge deal for brands, as it helps eliminate late payments and frees up capital for retailers. Plus, the detailed sales data provided can help both parties make smarter business decisions and, ultimately, lead to a more profitable cannabis industry.
LeafLink's CEO, Artie Minson, emphasized the importance of this new feature, saying, “Over the last 2 years, we’ve doubled down on improving our platform to meet the needs of our customers, especially in the financial services area. We’re seeing an average of 100,000 orders happen on LeafLink monthly. The need for solutions that address delinquent payments is as critical as ever. With PoST, we’re putting in place a tool that creates transparency and guarantees payment for everyone involved. It puts an end to delinquent payments while helping dispensaries reduce upfront spend on products and losses on the backend. We strongly believe that this technology will be an industry game-changer, ushering in a new era of efficiency and solving one of the industry’s biggest pain points.”
Right now, brands are responsible for setting payment terms and chasing down what they’re owed, while retailers often need to shell out large sums of money upfront to stock their shelves. This approach ties up their cash and leaves them with piles of accounts payable that don’t always match the actual sales performance of the products they’re carrying. PoST offers a solution by allowing retailers to keep more capital on hand and pay only when products actually sell to consumers. Brands, on the other hand, get more opportunities to drive sales through marketing campaigns that boost foot traffic to stores.
PoST is currently available in Michigan, Mississippi, and Colorado, with plans to roll it out to more states in the near future. If you're interested in using PoST, you can reach out to your LeafLink account representative for details.
The cannabis industry has struggled with late payments, with an estimated $3.8 billion in overdue payments in 2023 alone, according to a report from Whitney Economics. This is largely due to cash flow issues at dispensaries, competition from the illegal market, and federal tax problems due to the ongoing national prohibition.
PoST also offers enhanced inventory insights, helping brands and retailers pinpoint the right products, quantities, and restocking frequency for each location. By providing daily updates on sales data, PoST ensures that retailers avoid running out of stock or being stuck with unsold inventory. For brands, this detailed visibility can be invaluable, giving them the tools they need to fine-tune their product development based on real consumer demand. The result? A stronger, more collaborative relationship between brands and retailers that boosts product sell-through and meets consumer needs.
And PoST is already showing impressive results. Since its beta launch in June, over 70 customers have started using it. Michigan-based cultivator Six Labs was one of the first, and they’ve already made key adjustments to avoid overstocked inventory, used sales data to restock a popular item, and doubled sales on a slow-moving product. Six Labs is now rolling PoST out to four more retailers.
"PoST gives us visibility into how our products are moving, allowing us to right-size orders for each retail partner and location," said Ron Gibori, CEO of Six Labs. "As a result, the retailers are able to stock the right products for their customer base and make more money, and we receive more frequent, consistent orders."
Bloom City, a Michigan-based retailer, is also seeing the benefits. Since adopting PoST, they've managed to double sales on a slow-selling product through discounting, increased orders on fast-moving items, freed up cash by not having to pay upfront, and eliminated stock outages thanks to better sales data insights.
Sandra Lee, Controller of CannaPro Solutions, a company that helps cannabis businesses with back-office needs, has seen firsthand how PoST benefits both sides. “PoST has changed the way my clients think about wholesale cannabis commerce. On the sell side, Six Labs has seen immense value in having direct access to sell-through data as well as guaranteed regular payments, and they’ve already rolled it out to numerous additional customers. On the buy side, Bloom City Club has gained powerful insight into product performance that helped them optimize ordering for each of their stores. I’ve since recommended the program to multiple other retail chains. The PoST model is a win for both brands and retailers, and I’m excited to see it change the industry for the better.”
With PoST, LeafLink is looking to transform the cannabis industry by solving some of its biggest financial and operational challenges, making things easier and more profitable for everyone involved.
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