8 Wholesale Cannabis Terms You Should Know
The cannabis industry is growing each year as more states legalize medical and recreational use, as well as issuing licenses for retail and cultivation. Like any other marketplace, cannabis wholesale has its own vernacular. For someone just joining the growing cannabis landscape, these initialisms and acronyms might feel foreign.
Whether you’re new to cannabis from a recently legalized market or have been around since the early days and just need a refresher, here are the top wholesale cannabis terms you should know to speak, understand, and operate within the industry.
1. Bulk Pricing
The more you buy up front, the cheaper it is per unit of product. You’re a dispensary looking to stock flower and let’s say this particular strain costs $15 for one gram. But, if you order a full ounce, the brand might have a discount in place for large quantity orders and charge you $220. So instead of paying $15/gram, you’d end up with $7.85/gram — roughly saving 30-45% as compared to buying single grams. If you know this is a product that sells well, brands can use bulk pricing to incentivize retailers to place large orders and retailers can stock up quickly on their highest hits at a lower per unit price.
2. Minimum Order Quantity (MOQ)
This is the smallest number of product units or packaging items a brand or distributor will agree to sell in a single order. It isn’t economically feasible to ship small quantities, so brands will set MOQs to reduce production costs per unit and help them scale effectively.
3. Seed-to-Sale
This is a state required tracking system that monitors the entire lifecycle of a cannabis plant — from well, seed to sale. It ensures growers remain in compliance, lab testing is done accurately, and protects consumers from unsafe harvesting practices. Most states mandate all operators within their jurisdiction use a specific seed-to-sale software, so be sure to check your local requirements. And if you’re a LeafLink customer, our integrations make it easy to streamline seed-to-sale into your workflow with inventory quantity and THC percentages.
4. Manifest
As part of seed-to-sale, all cannabis products must be tracked with a transport manifest that details the specifics about the product or plant, shipping logistics and ETAs, as well as the transport vehicle’s information.Once a buyer places an order on LeafLink, sellers can use that data to generate a manifest in their seed to sale system. These manifests show the chain of custody, proving the legality of both the producer and the receiver to prevent sales through illicit markets.
5. Certificate of Analysis (COA)
Think of it almost like very official tasting notes for cannabis. These are the official lab results that verify the potency, quality, and safety of cannabis products. It’ll list the full cannabinoid profile, details around the aromatics or terpene profile, and whether or not it’s passed safety and contamination testing. Many cannabis companies make their COAs publicly available on LeafLink, and if they don’t, it’s advisable not to buy that product.
6. Sell-Through Rate
The formula for better inventory management, sell-through rates show top performers and low sellers during a specific, self-determined time period. Knowing these rates gives you the SKU performance you need to reduce unnecessary ordering, prioritize faster moving products, and strategize promotions. Generally, you want to aim for a sell-through rate of 60-80%. Above 80%, you risk stockouts if you don’t re-order quickly enough. Below 40%, the product is either overstocked, underpriced, or simply just not what customers want.
Sell-through rate = (units sold ÷ units received) × 100
measured over a set period of time
7. Periodic Automatic Replenishment (PAR)
Never stockout again with periodic automatic replenishment. An inventory management tool, PARs set a fixed minimum and maximum stock quantity for specific inventory items. When a product hits the minimum threshold, it triggers a reorder. If it hits the maximum, orders are paused to avoid over-ordering and dead stock. PAR levels are not a one-size-fits all solution and each product will have its own baseline by taking an average of PAR calculations over about a month, so keep an eye on how new inventory is trending during the first 30 days.
PAR level = (average daily usage x lead time in days) + safety stock
8. Net Terms
The payment terms and conditions, net terms are payment agreements determined by licensed buyers and wholesale sellers where the retailer receives product up front and must pay the seller by a set date in the future. If you hear Net 30, that means payment is due in 30 days, and so follows suit with Net 60 and Net 90. Extending net terms is essentially extending credit to buyers and alleviates cash flow bottlenecks. It does come with risk, of course, as you should only agree to net terms with customers that you trust with proven credit history and reliable track records. Once you’re ready, automate your net terms on LeafLink with direct pay for no fuss payments.
Cannabis wholesale moves fast, and the vocabulary can feel like its own layer of complexity on top of an already complex industry. But once you’ve got these eight terms down, you can navigate almost any conversation with a supplier, buyer, or compliance officer — and make smarter decisions with your inventory and cash flow along the way.
As you grow in the industry, you’ll pick up more nuanced terms specific to your state, your license type, and your role in the supply chain. The good news: you don’t have to learn it all on your own.
If you’re already a LeafLink customer, our support team is here to help you navigate the terminology — whether you’re a seasoned vet or brand new to the space. And if you’re not on LeafLink yet, we built the platform to make wholesale simpler, not just to talk about it. Brands can request a demo, and retailers can sign up for a free account today to start ordering from thousands of trusted suppliers in one place.