In an increasingly crowded market, cannabis manufacturing has become an attractive option for emerging cannabis brands. Gone are the days where owning a simple line of cannabis flower is enough to turn a profit; today’s competing companies must be able to produce differentiated products that appeal to a broad demographic.
So, what is the state of cannabis manufacturing, and what must companies do to survive? In this blog, we’ll look at the underlying trends that drive the cannabis manufacturing market and how operators can leverage software to stay competitive and compliant in the industry.
Cannabis Manufacturing Trends Driving Innovation
There are two components to manufacturing: extraction and infusion. Most operations perform both. Over the last few years, several trends have emerged which have helped transform cannabis manufacturing from a niche submarket to a significant revenue source. Those trends include:
The application of science and chemistry
The focus on developing chemistry-based intellectual property (IP) for extraction operations has grown the cannabis manufacturing market by leaps and bounds. Increasing understanding of bioavailability will play a significant role in developing new products capable of delivering consistent consumer experiences.
Process and product IP
IP has become increasingly important to product manufacturers. Not only can manufacturers deploy their IP themselves, but they can also license it to other cannabis manufacturers as those companies win licenses in new markets. This turns IP into an incredibly powerful tool where manufacturers can gain footholds in new markets without having to become licensed. Creating products and standard operating procedures (SOPs) that can be reproduced consistently at high-quality levels is crucial to developing valuable and marketable IP. A growing number of manufacturers are turning to data-driven strategies and automation to ensure quality and consistency.
How Cannabis Manufacturers Can Stay Compliant and Profitable
Optimized Business Operations
Running a cannabis manufacturing company is often as complex as the machinery they employ. Maintaining strict records for tax mitigation and driving operational efficiency through unique workflows and SOPs can increase manufacturers’ profit margins and ROI. However, this can be a difficult and labor-intensive process, which is why most manufacturers use specialized seed-to-sale software to optimize their operations.
Seed-to-sale software can help maintain accurate step-by-step data documentation of the cost of goods sold (COGS), drive business operational efficiency by identifying performance issues and efficiencies, and track quality rating key performance indicators (KPIs).
Compliance with State Regulators
As with every segment of the cannabis industry, compliance is crucial for manufacturing verticals. Given the level of complexity associated with every step of the process, manufacturers must be able to provide proof that they comply with state regulations.
Maintaining the proper documentation of manufacturing workflows allows for better control around recalls and consumer safety. Seed-to-sale software can streamline and automate much of the process.
Accurate Supply Chain Tracking
With the vape scare of 2019 still fresh in the minds of the industry, manufacturers must track ingredients back to their origin, as well as any other solvents or ingredients used in the production process. This requires increasingly sophisticated software that can handle multiple inputs and outputs to capture the variety of product variations and workflows that manufacturers must capture.
The Role of Software in Cannabis Manufacturing
Software plays a vital role in cannabis manufacturing. Workflows, KPIs, labor and machine hours, and materials costs must be tracked to ensure that the operation is efficient, consistent, and vigilantly tracking all tax-deductible actions. Software like MJ Platform can both help make the task easier and cut down on filing errors.
The right software can also automate quality, potency, and purity tracking from the lab to the final product, ensuring high-end product quality. For example, MJ Platform can identify the potency of medicated oil and then reverse engineer the quantity and volume required to deliver the final product’s needed potency level.
When selecting a seed-to-sale software for your manufacturing operations, be sure to look for a system that can handle:
- Extraction/conversion management
- Materials management
- Infusion/assembly tracking
- Advanced cost management
- Job tracking
- Workflow and SOP definition
Be on the lookout for platforms that can offer comprehensive services as well. For example, MJ Freeway’s new business intelligence tool, MJ Analytics, provides operators access to real-time data relating to the most critical industry workflows, in addition to the features outlined above.
In an increasingly crowded market, cannabis manufacturing presents a golden ticket opportunity for brands to seek new markets and set themselves apart from their competitors. The dividing line between those that succeed and those that do not will hang upon their ability to optimize their operations and leverage the tremendous advantage of seed-to-sale software.
