From chatbots and personalized recommendations to automated inventory management, artificial intelligence (AI) is everywhere these days. In the cannabis industry, the buzz around AI is growing stronger; but what AI applications are actually available for dispensary owners right now, and what’s yet to come?
In this blog, we’re breaking down the real state of AI in cannabis retail. We’ll explore how it’s evolving and why smart retailers aren’t just waiting for the future, but maximizing the power of business intelligence (BI) today.
What Is AI (and What Isn’t)?
AI has been a marketing buzzword for years, and it’s often been slapped onto products that had little actual “intelligence.” True AI involves machines learning from data and improving over time – things like large language models (LLMs), machine learning algorithms, and collaborative filtering. For instance, chatbots like ChatGPT use LLMs trained on massive datasets to mimic reasoning and language, while machine learning focuses on finding patterns in historical data to predict future outcomes.
It’s important to distinguish AI from BI, or business intelligence. BI is about collecting, organizing, and analyzing data to help humans make smarter decisions. AI, on the other hand, can automate those insights or even take actions based on them. Both are crucial – but right now, BI is still the more reliable and useful tool for cannabis retailers.
What Can AI Do for Cannabis Retailers Right Now?
While AI is gaining traction across industries, its adoption in cannabis retail is still in the early stages. That said, there are a few practical AI tools available for dispensary owners today that can help optimize customer experiences, security, inventory management, and sales.
AI Recommendation Engines
One of the most visible AI applications in cannabis retail today is product recommendation engines. These systems use machine learning models – often collaborative filtering – to suggest products based on past customer behavior and purchase patterns.
For example, here at Cova we’ve recently launched an AI-powered recommendation service in our eCommerce platform. Built on collaborative filtering, this tool analyzes hundreds of thousands of daily transactions to suggest relevant products to shoppers, helping increase basket sizes and enhance discovery. This functionality is set to be integrated into our POS system later this year as a tool to support budtenders as they recommend products to customers.
Inventory Tracking and Management
Automating inventory management with AI is another growing area, although it’s critical to separate BI-driven tools from full AI automation. Right now, automated reordering and true demand forecasting via AI are limited in cannabis POS systems. For example, Cova provides highly detailed reorder reports that project the number of days of remaining stock based on historical sales trends. However, this function deliberately stops short of auto-generating reorders; for now, human oversight is still needed to avoid costly overstock or stockout errors due to the risks of inaccurate AI predictions.
Some platforms like Solink offer integrated analytics that tie security and inventory data together to identify loss and inventory anomalies, though full AI-driven reordering is still rare in the cannabis retail industry.
Heatmap Analytics for Store Layout Optimization
Understanding how customers move through your store – and where they spend the most time – is critical to optimizing layout and boosting sales. This is where heatmap analytics, powered by AI, come into play.
Solink offers an AI-driven heatmap solution for cannabis dispensaries. By analyzing video footage, Solink’s system identifies high-traffic areas, helping retailers optimize product placement, streamline customer flow, and maximize merchandising opportunities. This actionable data empowers dispensaries to make strategic layout changes based on real shopping behaviors, not guesswork.
AI Video Analytics for Security and Compliance
Security and compliance are major priorities in cannabis retail, and AI is already making a real impact here. For instance, Solink’s AI video analytics platform provides real-time monitoring for suspicious activities, blocked exits, unauthorized access, and compliance violations. Instead of passively recording video, Solink’s system actively analyzes footage, alerts managers to potential issues, and provides audit-ready reports, which helps dispensaries stay compliant and reduce loss.
This kind of intelligent, real-time surveillance is one of the most mature uses of AI currently available in cannabis retail.
AI Applications in the Cannabis Industry at Large
Outside of retail, AI is making bigger waves across the cannabis ecosystem:
- Cultivation: Growers use AI to monitor crops, optimize light and water use, detect pests and diseases early, and even fine-tune genetic strains for higher yields.
- Supply Chain Optimization: Predictive analytics help streamline inventory and logistics across seed-to-sale platforms.
- Product Testing and Quality Control: AI assists in analyzing cannabinoid profiles, ensuring consistency and safety.
In short, AI is helping cannabis businesses grow better plants, maintain quality, and stay compliant.
The Near-Future of AI in Cannabis Retail
So, what’s coming next? Realistically, the near future of AI in cannabis retail will focus on augmented intelligence – tools that empower employees to provide better, faster customer service and optimize operations while remaining compliant. We expect more:
- Enhanced Recommendation Engines: Combining collaborative filtering with customer loyalty data and product metadata for even sharper recommendations.
- LLM-Powered Budtender Assistants: Tools that summarize customer preferences and suggest upsell or cross-sell opportunities.
- Predictive Scheduling: Optimizing staff levels based on foot traffic and purchasing trends.
Importantly, retailers and tech providers are learning that AI should support human interactions instead of trying to replace them in high-touch, highly personal environments like cannabis retail.
Don’t Wait – Leverage BI in Your Cannabis Retail Business Now
While AI’s future prospects are exciting, smart retailers aren’t sitting around waiting. They’re using business intelligence to dominate their markets today. Cova offers powerful, often underused BI tools and a suite of reports that help retailers:
- Track daily performance with end-of-day reports and hub dashboard widgets
- Optimize inventory with reorder reports showing stock levels and sell-through rates
- Prevent loss and fraud with discount reports tracking markdown percentages and employee activity
- Streamline product management with product expirations and products-to-archive reports
- Monitor KPIs on the go with mobile-friendly dashboards
These tools give cannabis retailers the actionable insights they need to run tighter, smarter operations without relying on experimental AI. And, because these reports are built around real data and not predictive guesses, retailers can trust they’re making the most informed decisions.
Ready to see how Cova’s purpose-built POS can help power your cannabis retail operation to the next level? Schedule a free demo to see it in action today!