Cannabis Supply Chain Management Software Benefits

Understanding the Cannabis Supply Chain: From Seed to Sale

In 2020, the marijuana industry reported a growth rate of 46% (compared with 2019). It also made $17.5 billion in sales the same year. Experts expected the industry to almost double this number in two years! Sales success in the cannabis industry relies on ensuring that the supply chain remains intact. So, you’ll have to understand the five major processes involved in cannabis production – from the initial stages of cannabis cultivation to the final stages when the end product is sold.

After all, the cannabis industry has a failure rate of 40%, described as “not bad” by experts. However, it’s possible to improve this 60% success rate by understanding how cannabis products are manufactured. It will help you fully appreciate the role of ERP in cannabis supply chain management. Here’s a breakdown of the five stages of cannabis, from harvesting to selling:

Cultivation & Harvesting

The journey begins with you cultivating and harvesting cannabis plants. At this stage, you’ll select the proper strains. Then, you’ll germinate seeds and nurture plants via different growth phases. Different factors in cannabis cultivation/harvesting come into play here, such as lighting, humidity, temperature, the level of nutrients, etc. However, you can use an ERP system to keep track of all these factors.

Processing and Manufacturing

After you have harvested the plant, it will undergo different processing steps before it can become the product customers will buy, such as different oils, edibles, topical creams, concentrates, patches, etc. So, the processing/manufacturing stage involves extracting, distilling, refining, and formulating the plant. When it comes to quality control, you can use an ERP system to manage extraction parameters and document batch records. That’s how you can maintain the integrity of this product by staying compliant.

Packaging and Labeling

The art of packaging and labeling will be the fourth stage of our journey. Industry regulations require an industry manufacturer to label these products properly. Packaging materials must be child-resistant and keep contaminants away from contamination/degradation. Also, you should label it accurately. It’s done by putting info like potency, dosage instructions, warning labels, ingredient lists, etc., on the product.

Distribution and Transportation

After the product has been packaged, you can guess what happens next. Right! The product is shipped & distributed. Retailers will receive cannabis products, so you have to manage the logistics of shipping lots of gummies and cookies. An ERP system can help you plan delivery routes, track shipments, etc.

Retail and Sale

At the end of the snake road, we finally reach the stage where the retail/sale of cannabis products must be taken care of by the ERP system. It may involve operating cannabis dispensaries. Retailers are tasked with complying with the state/federal regulations put in place associated with age verification, tracking of products, reporting of sales, managing of inventory, etc. 

The Role of Enterprise Resource Planning (ERP) in Cannabis Industry

Are you looking to take your cannabis business to new heights of success? Then, you should keep in mind that 70% of businesses fail in the 1st year. In 2023, a famous cannabis store, once worth $1.7 billion, was teetering on the edge of bankruptcy. It all happens when a marijuana store isn’t using the right ERP! This is something to avoid if you’re a cannabis business owner. In this section, we’ll discuss the role of an impressive cannabis supply chain management software in helping your business grow. Let’s start with a simple definition of cannabis ERP and its importance:

Marijuana ERP and the Importance of Cannabis Software

In simple words, ERP is your all-comprehensive gateway to business success. It can handle complicated, time-consuming business tasks, perform difficult business operations, keep an eye on inventory levels, do the finances, and tackle sales/distribution. It’s like a centralized platform to manage and streamline your key business chores. That’s why studies have shown that using ERP is crucial for business success in this age of technology & automation. Some other things that an ERP does marvelously include:

• Ensuring proper product labeling
• Enhancing transparency and traceability
• Preventing discrepancies and reducing waste
• Tracking plants through different growth stages 
• Providing real-time visibility into inventory levels
• Managing multiple product types simultaneously
• Monitoring plants from cultivation to distribution
• Streamlining operations to support data-driven decisions

ERP Functionality in the Cannabis Industry

If you invest in cannabis manufacturing and distribution software, you will realize that it offers different functionalities tailored to your marijuana business. It’ll address the unique challenges facing your sector. Some of these functionalities include:

• Seed-to-Sale Tracking: Do you want to track and trace cannabis products throughout the entire lifecycles of said products? In that case, you should ensure compliance with proper regulations with marijuana ERP. It’ll enhance product transparency.
• Inventory Management: ERP software provides robust inventory management capabilities to let cannabis tools track stock levels, monitor product expiration dates, manage batch numbers, and streamline order fulfillment procedures.
• Product Planning & Manufacturing: After investing in cannabis ERP, you can easily optimize the production processes. Cannabis ERP solutions are a great way to manage recipes and formulae. You can track yields with this ERP to ensure consistency in product quality.
• Handling Sales & Distribution: ERP enables businesses to manage sales orders, track major shipments, watch over customer preferences, improve sales forecasting, etc. 
• Managing the Finances: Want to streamline financial procedures? An ERP solution will help you do that by taking care of accounts payable and receivable, general ledger, budgeting, monetary reporting, etc. It’ll give you careful insights into profitability and cash flow management.

ERP’s Role in Regulatory Compliance

Successful risk management is important when it comes to running a successful cannabis business. Don’t forget that marijuana distribution companies have to comply with the strict regulations of the industry. After all, there are very strict laws & regulations that have to be kept in mind when running & operating a weed business. Using cannabis software can help your business adhere to these regulations:

• Tracking & Tracing Capabilities: ERP software lets your business keep comprehensive records of all products. It’ll create a record of the product’s origin, cultivation details, manufacturing process, distribution history, etc. This info will help you with audits and regulatory reporting.
• Automated Compliance Reporting: Cannabis ERP automatically generates compliance reports. It is a great way for weed companies to minimize the risk of errors in reporting and ensure correct, timely submissions.
• Regulatory System Integration: ERP solutions integrate with state-mandated tracking systems. These systems allow for real-time reporting so you can seamlessly communicate with regulatory authorities.

4 Key Features of Cannabis ERP Systems

A study done a little over a year ago says that barely 25% of cannabis operators are profitable. Imagine if a group of four friends decided to enter this niche and become independent cannabis suppliers/distributors in the United States. Just one of them will earn a decent profit; the rest of the friend group will be either losing money or barely making it even.

Do you know what that one successful friend would be doing differently? They would be using cannabis software. That’s because ERP systems have certain features that help cannabis business owners become profitable. In this section, we’ll explore the different features of these ERP systems to see how they make an impressive supply chain management platform.

1. Inventory Management

Let’s start with one of the most vital features of cannabis ERP solutions, i.e., inventory management. It’s a great way to track and control an entire line of weed-related products. You can easily track & manage all cannabis products with this software. It lets you:

• Track Inventory in Real-Time: You’ll get real-time visibility into inventory levels with the Weed ERP. Imagine a cannabis dispensary monitoring stocks of various strains and edibles. It can use a cannabis ERP system to timely replenish these stocks and make sure they have enough products available for customers.
• Tracking Bat and Lot: A cannabis supply chain management software also lets weed companies perform batch & lot tracking. This feature comes to your rescue when you’re dealing with recalls or quality control issues. For instance, if a certain catch of CBD oil has been contaminated, your ERP will identify all affected products to recall them quickly.
• Managing Expiration Dates: With a robust ERP solution, you can easily take care of the dates of expiration of all products. It’ll prevent distributors from selling the products past their expiration dates. Suppose a cannabis producer wants to track the shelf life of pre-rolls and edibles. So they can ensure that older inventory gets sold first. That’s how they can prevent older products from getting spoiled due to newer products being pushed to the customers first.
• Integrating Barcode and RFID: When it comes to barcode and RFID tech integration, marijuana ERP comes to your rescue once more! You can efficiently scan your products and streamline the tracking of cannabis items. RFID tags will help you monitor the growth stage of all plants – from seeding to harvest. Proper inventory management leads to seamless supply chain management this way!

2. Quality Control

After inventory management, we come to the 2nd amazing feature of cannabis ERP, i.e., QA. In the realm of quality control – a key aspect of ERP software solutions featured in different industries ranging from software development to textile manufacturing – we have to ensure the quality of our products. So, this is what the best cannabis inventory management software will do in terms of QA:

• QA and QC Checks: With an ERP system, you can let your business implement QA and QC checks with relative ease. QA – as we have just seen – means quality control. QC stands for controlling a product’s quality across various stages of your supply chain. That’s how you can ensure only the very best standards of quality. Let’s say a cannabis cultivation facility can perform QA checks on plan health in the early stages of growth and then implement QC checks when the packaging has to be done. 
• Lab Testing Integration: You can also integrate the ERP with lab testing facilities to streamline a complex process like sample submission and documenting test results. That’s how you will make sure that your weed product is safe for human consumption and complies with only the strictest regulatory standards. For example, as a cannabis producer, you can simply send the samples of your products to third-party labs for potency/contaminating testing. That’s how you can receive and store the results within your ERP system.
• Documenting SOPs: SOPs or standard operating procedures are difficult to impose without the use of ERP systems. These standards make sure that all procedures adhere to the same level of quality, ensuring consistency in supply chain management. Let’s say a cannabis extraction and production startup wants to document its extraction methods and ensure the same standards across all extraction facilities. They can use cannabis ERP software to enforce these SOPs.

3. Financial Management

When it comes to financial management, you can’t simply rely on bookkeepers to keep records of your transactions without making mistakes. You should purchase a cannabis ERP system for financial planning and documentation. This ERP will help you in this regard:

• Accounts Payable & Receivable: ERP systems help you manage accounts payable & receivable in cannabis supply chain management. So you can make timely payments and track your financial transactions accurately. For instance, a cannabis distributor may use ERP tools to track invoices from suppliers and monitor incoming payments from retailers.
• General Ledger & Financial Reporting: Cannabis ERP systems give you a centralized ledger. It’s a great way to generate comprehensive financial reports featuring stuff like income statements & balance sheets. Let’s say a cannabis cultivation company is generating detailed financial reports to evaluate profitability and ensure compliance with financial regulations. You can have a clear & comprehensible picture of your company’s financial health this way.
• Budgeting Forecasting: Want to excel at budgeting and forecasting? Then, you should make use of cannabis ERP. Suppose a cannabis manufacturer wants to create detailed budgets featuring a lot of important details like marketing expenses and overhead costs. An ERP can help them with that! Weed manufacturers can also use the ERP to make forecasts based on historical data and market trends.

4. Compliance Tracking

Lastly, a key feature of cannabis supply chain management software, such as marijuana ERP, is that it ensures regulatory compliance throughout the industry. After all, legal compliance has become a major problem for cannabis-related businesses of all shapes and sizes. Cannabis ERP, however, helps you stay compliant via:

• Regulatory Reporting: Whether you have to generate compliance reports or submit them within the given timeframe, ERP systems can do it all! For instance, you can use cannabis ERP to create comprehensive reports on plant counts, harvest weights, inventory levels, etc.
• Tracking System Integration: We have touched upon this issue previously. When it comes to government-mandated tracking system utilization (such as Metrc), you can rely on ERP to make sure that you can use it easily. Let’s say a cannabis retailer connects their weed software with a system like Metrc to automatically generate sales reports error-free.

How to Implement ERP in Cannabis Supply Chain Management?

Finally, we’ll cover the most important subtopic in this blog, i.e., the subtle art of implementing only the top cannabis software in your organization. It requires careful planning and execution, after all. Do not forget that implementing any ERP system can be a complex and time-consuming process due to factors such as change management. However, this four-step program will help you enjoy the benefits of ERP with a lot of ease. So, if you’ve decided to invest in cannabis ERP, here’s how you can implement it:

Choose Cannabis Software Carefully

First of all, you must implement the right cannabis supply chain management system for your company. Making the right choice is very important in this case. Find a software solution that meets the particular requirements of your business. You should consider these factors when choosing cannabis ERP:

• Industry-Specific Functionality: Find an ERP system tailored to the unique requirements of firms operating in the marijuana industry, not just any random ERP solution. A cannabis ERP system is equipped with the modules/features required for a cannabis-supplying company.
• Scalability: Only invest in an ERP system if it can scale alongside your business. As your company grows and your marijuana distribution cycle expands, this software must grow with it. Consider your company’s business expansion plans when buying an ERP software package.
• Integration Capabilities: Your preferred ERP must integrate well with existing systems. Suppose you already use a tech tool for inventory & financial management. Then, this new ERP software should work well with existing software solutions.
• User-Friendliness: Also, your chosen weed ERP solution must be easy to use. Don’t invest in very hard-to-learn ERPs; an easy-to-use system works the best when it comes to cannabis ERP supply chain management.
• Vendor Support: It’s equally important to check the reputation of your vendor. Are they offering excellent customer support? Do they provide ongoing system updates? Find out!

Install and Customize the System

After selecting the best cannabis inventory management software, you can move on to the next phase, i.e., installation & customization. Keep the unique business needs of your marijuana company in mind. A few steps are included in this phase as well:

• Hardware/Software Setup: Next, you should install the right hardware infrastructure as well as software components needed to run this cannabis software smoothly.
• Data Migration: What about the data stored in the previous software? It needs to be taken out of legacy systems and transferred into the newly-acquired ERP solution. 
• Customization: Now, this part may look a bit shoddy, but streamlined customization will ensure that your new marijuana software aligns with the workflows and terminologies used in the weed supply chain at your company. For instance, you might have to set up roles/permissions. It also includes creating modules and custom fields.
• Integration: Once again, you’ll check for integration features of this system. Make sure that it’s working well with the software already installed in your company.

Provide Ample Training and Support

Don’t forget about your employees when investing in a cloud ERP system for cannabis manufacturing and production. Even the best cannabis supply chain management tool is useless if it doesn’t work well with your workforce. It needs to be user-friendly, easy to navigate, and not very hard to learn. So, you should provide ample support/training to your employees. Here’s what you can do:

• User Training: Give proper training to the end-users of this weed software. The end-users here are your customers, and they must learn how to use the ERP right away. You can hold some training sessions or provide them with user manuals.
• Superuser Development: Who are the key individuals in the company who will become the joint ERP superusers? They will operate and troubleshoot the ERP software. As superusers, they will provide ongoing support to traditional users, serving as internal champions of the cannabis ERP.
• Vendor Support: Don’t forget to establish a supportive contract with the vendor (the company that’s provided this software to you). That’s how you can ensure prompt assistance in case of an insensible technical issue or weird question.

Keep Monitoring and Updating 

Finally, we’ve reached the very last stage of this journey. Now, we’ve installed and customized the ERP. Your workers have been trained, and everything is set. All that now remains is to keep monitoring weed ERP’s performance to make sure it doesn’t have any underlying issues. This is what you have to do:

• Monitor the Performance: It all starts with performance monitoring. You’ll keep monitoring and evaluating how the system performs. That’s how you’ll identify potential bottlenecks and silos in communication.
• Get System Updates: Keep the system up to date with the latest software patches. These latest updates will reinforce your ERP system’s cybersecurity. These patches also monitor the response time of your cannabis supply chain ERP while efficiently ensuring data accuracy and overall system stability.
• Keep Improving: Let’s end this section by stating the obvious, i.e., you should keep evaluating & assessing the performance of your cannabis supply chain management software. Also, you must stay on the lookout for areas where improvement is needed. Gather user feedback and conduct system audits, too. That’s how you can keep improving the working of your marijuana software.

Final Thoughts

The cannabis industry is progressing and shows no signs of slowing down. Surveys show that the global market size of the industry will reach USD 82.3 billion by 2027. Now, you should focus on positioning your business at the forefront with efficient operations and regulatory compliance. It’s a great way for a business owner in the marijuana industry to become an industry leader.

Want to reach excellence in cannabis supply chain management? Then, you should use an ERP system to make your workers’ lives easier. Get help from Alchemy if you’re still confused.

Don’t wait to catch up—take charge in this fast-paced industry. You can now schedule a free discovery call with Alchemy 365 to learn how we can be your trusted ERP partner for implementing only an ideal cannabis ERP solution. Grow your weed business with Alchemy’s assistance!