Since California legalized medical marijuana in 1996 and Colorado and Washington legalized recreational use in 2012, the legal cannabis industry has taken root across the US. Cannabis is now legal in Canada as well. As we near marking a decade of recreational cannabis legalization, it’s clear that the cannabis industry is no longer in its adolescence. And while many are celebrating the market’s maturity, there are new business challenges that come with a more robust industry.
With the industry developing faster than states can pass recreational cannabis laws, it’s easy for cannabis organizations to get swept up in the fast-moving market. Before you know it, you have to deal with all sorts of problems stemming from the rapid growth we’re seeing in that industry, and needs such as financial visibility, data management, supply chain management, organizational change management, and many others are becoming more apparent.
That’s where ERP software comes in. It’s specialized software that gives organizations a better look at their business and connects all of the different moving pieces, and it’s time the cannabis industry takes a good look at ERP technology. It could be the missing piece that helps your business navigate the marijuana market through 2021 and beyond.
Expanding into New Markets
More and more states are considering legalizing recreational cannabis and are creating a wide variety of regulations in order to do so. This puts pressure on cannabis organizations to be quick about expanding into new, lucrative markets. From a business perspective, this can be quite difficult. Organizations need infrastructure that can help them be as efficient and profitable as possible, and this can be tough with a market still considered somewhat controversial. In addition, every state creates unique legislation to legalize recreational marijuana, so for multi-state operators, there’s a lot of ground to cover when creating a product that’s legal to sell in all of your markets.
As the cannabis industry grows so do many other markets that serve the industry. From green housing to hydroponics, fertilizer to lighting, packaging to a wide variety of different applications, there are a number of industries that serve cannabis partners which are also experiencing the same kind of growth and demand. While these companies do not have the same restrictions from a regulatory perspective, they do experience the same boom as regulations on cannabis ease.
Luckily, many ERP vendors are not reluctant to partner with the cannabis vertical. A handful of specialized ERP systems have come to market recently, offering cannabis organizations niche features and integrations that help a cannabis business thrive.
Navigating Regulations and Compliance
What really makes the cannabis industry tricky is the process of jumping through all of the legal hoops when it comes to regulations and compliance. That’s because regulations and operational challenges go hand in hand. Every state has its own unique code of laws that must be followed to the letter. It can be difficult to keep them all straight, especially if you’re not using software to help you. This is where niche ERP products really shine. LeafLogic is a good example. They market themselves as a seed-to-sale ERP platform. Their shining feature is the platform’s ability to connect with all of the different regulatory platforms and ensure that an organization stays compliant with those laws.
Ensuring compliance with local regulations is critical to the longevity of any cannabis company and the consequences of non-compliance are steep. A lot of hard work and profits can go up in smoke pretty quickly. It’s not worth the risk to become non-compliant by accident and utilizing the right software package really can help you remain organized and see your business clearly.
Leveraging the Advice of Experts
In many ways, the cannabis industry is incredibly unique. But the challenges cannabis organizations face doesn’t stem from its exceptional qualities, but rather the common business challenges that come at this stage of business and industry development. To top things off, the process of finding the right partners, advice, and technology to solve these problems is a full-time job.
So, what kind of business challenges are we talking about here? The future of legal cannabis is looking bright, but there are some decisions to be made that could shape the market as we know it. On the horizon are issues regarding the expansion into eCommerce, regulatory challenges of banking, the potential for products to be shipped and delivered, plus increased pressure on the supply chain to meet growing demand.
We’re heading into a critical point of industry growth for the cannabis market. While it’s easy in fields like manufacturing or energy to consult an expert with years of experience, finding that in the cannabis world is a bit trickier. However, there is hope. It’s the job of an ERP consultant to find the right tools for the job.
Are you in the cannabis industry and interested in solving some of your largest business challenges? Have you already started a digital transformation project and need some advice? My team and I at Third Stage Consulting are always ready to help. If you haven’t already, be sure to check out the resources on our website. You can also reach out directly if you like.