Business was humming on Saturday at Bazonzoes’ three marijuana dispensary locations. Hundreds were in line to take advantage of the retailer’s large 42% discount to celebrate the 4/20 holiday.
Then it all started to fall apart as Bazonzoes’ point-of-sale system, Dutchie, began to experience outages. The cannabis retailer quickly adjusted by handwriting sales, calculating taxes and discounts using a calculator. Pandemonium.
Business was humming on Saturday at Bazonzoes’ three marijuana dispensary locations. Hundreds were in line to take advantage of the retailer’s large 42% discount to celebrate the 4/20 holiday.
Then it all started to fall apart as Bazonzoes’ point-of-sale system, Dutchie, began to experience outages. The cannabis retailer quickly adjusted by handwriting sales, calculating taxes and discounts using a calculator. Pandemonium.
“We were out for about two hours total,” said Erin McCann-Sabo, operations director for Bazonzoes, which has two locations in Lansing and one in Walled Lake. “We were already at a backup of 35 minutes to an hour and a half due to the sheer volume of people in line. We had to rely on our budtenders to quickly do math and transcribe METRC numbers (the state’s product tracking system). For people to hand-write METRC, excise and sales tax on a subtotal with various discounts is an exercise in not only math skills and patience, but in perseverance. Especially in front of 400 angry customers.”
The Dutchie point-of-sale system outages began at about 12:30 p.m. on Saturday, about 30 minutes after the west coast of the U.S. began cannabis sales, indicating volumes probably overwhelmed the systems.
McCann-Sabo estimates that upwards of 500 people walked out of line due to the slow down, costing the retailer thousands of dollars in marijuana sales.
“It was a devastating impact on what could have been a very victorious 4/20,” she said.
Bazonzoes wasn’t alone: the outage from Oregon-based POS provider Dutchie was widespread across the U.S., impacting roughly 20% of its customer base. The company services roughly 6,000 customers in the U.S. and Canada.
In a statement to Crain’s, the company acknowledged the outage but said it was still a very successful 4/20 holiday, which represents the largest sales day of the year for cannabis retailers.
“This year’s 4/20 was a record-setting day for the majority of Dutchie-powered dispensaries,” a Dutchie representative said in an emailed statement. “Our systems powered over two million transactions, representing $165 million dollars in retail commerce — a 50% increase from 2023 4/20. While Dutchie and our partners prepared extensively for this year’s 4/20, a group of customers local to a specific instance of our POS system experienced serious issues that impacted their ability to transact. Dutchie is committed to stability and will be continuing to invest heavily to provide a reliable platform for all customers.”
It was a record-setting day in Michigan, as well. The state’s industry sold more than $28.5 million in product on the holiday, a 32% increase from last year’s 4/20.
But it’s unknown how many sales were lost due to the Dutchie outage and whether the customers that walked away from Bazonzoes and other retailers simply visited another dispensary or forwent a marijuana purchase all together.
Birmingham-based Quality Roots, which operates eight retail locations across the state, benefitted from the misery of others, said Aric Klar, CEO of the operator.
Quality Roots uses Dutchie competitor FlowHub as its POS system.
“We were good and saw customers lining up at our stores quickly when other stores went down,” Klar said. “Quality Roots had the biggest day ever.”
Klar said the company grossed more than $500,000 in sales on 4/20.
Other major retailers like C3 Industries, which operates 11 High Profile dispensaries, uses Dutchie for its POS system but did not experience any outages or slow downs, said CEO Akur Rungta.
Lume Cannabis Co. and House of Dank also use Dutchie but did not experience the outages on 4/20.
Greenhouse of Walled Lake experienced a major slow down in Dutchie’s system, co-owner Jerry Millen told Crain’s.
But he’s not angry about it.
“The problem is that it’s such a new industry and it’s hard to get all this straight on the day with the most volume. When it went down, we switched to a manifest and I went out and greeted our customers to make sure they were taken care of. No one was mad,” Millen said. “This happens. A hiccup on 4/20 is fine as long it works the other 364 days of the year. I give Dutchie a pass.”
Millen said the retailer barely makes money on the marijuana on 4/20 anyway because of the deep discounts.
McCann-Sabo isn’t so forgiving.
“I’m more angry than understanding because this happens every year with Dutchie,” she said. “It’s usually only for 10 minutes or 15 minutes, but this was quite a long period of time in the middle of the busiest day of the year. It’s not getting better, it’s getting worse.”
However, McCann-Sabo isn’t yet convinced the company will change POS providers.
“There’s nothing worse than switching a POS system,” she said. “It’s another time-consuming and costly thing in this industry and none of them are great. There’s a joke in the industry that they are called POS for a reason.”
By Dustin Walsh Crain’s Detroit Business