The Cannabis Industry Grows Up: The Role of Software in Today’s Cannabis Business
As more places in the United States and countries around the world continue to legalize cannabis, the cannabis industry continues to undergo a great shift – evolving from an industry once dominated by individual operators to the growth of large multi-state operators (MSO) and entrepreneurs. This new breed of cannabis business owner tends to bring significant business experience and an expectation for more advanced technology and finance infrastructure.
The Importance of Technology in the Cannabis Industry
As discussed in our e-book, Technology in the Cannabis Industry, the adoption of increasingly sophisticated software technology is a must-have for the industry for optimizing operations, financial management, profitability, and compliance. This, coupled with the complexities of the cannabis industry, has resulted in the need for software solutions that can provide entrepreneurs and MSOs with visibility to real-time data and actionable insights from all areas of operations and the supply chain.
To gain a better understanding of how technology has impacted the cannabis industry, let’s take a deeper look into the four key areas of cannabis: cultivation, manufacturing, distribution, and retail.
Cultivation in the Cannabis Industry
In the cannabis industry, cultivation includes growing plants from seed, clone, or tissue to harvest, as well as drying, curing, and packaging base products to use in manufacturing or sell as a finished flower. The key factors that changed cultivation in the cannabis supply chain include increasing legalization, greater access to capital, larger-scale operations, scientific impact on cannabis as an agricultural product, and adoption of greener practices. More recent trends that will continue to shape the future of cultivation include the consolidation and rise of operations of unprecedented scale, increased automation to manage labor costs and increase yield, the growing emphasis on sustainable practices, competitive focus on science, and medical-grade quality and consistency backed by data.
In order to create a profitable and sustainable business, cultivators need efficient business operations and flawless compliance with state regulators. The adoption of technology has been largely driven by the need to maintain compliance and provide traceability. With the rise of software in cultivation, business owners are also realizing improved operational efficiencies. Click here to download our e-book, Cultivation in the Cannabis Industry, to get a deeper dive into the impact software has made on cannabis cultivation.
Manufacturing in the Cannabis Industry
Cannabis manufacturing has the most growth potential within the marijuana industry, as companies experiment with developing and bringing new differentiated products to the market for a broader audience. Across the board, the focus on bioavailability and new forms of concentrate have helped to change manufacturing within the cannabis supply chain, and looking ahead, chemistry, product intellectual property (IP), and refinement of processes will become further entrenched in cannabis processing.
As we discuss more in-depth in our e-book, Manufacturing in the Cannabis Industry, software plays an integral role throughout the cannabis manufacturing process. Advanced cannabis software systems enable cannabis processors to precisely track workflows, optimize operations and productivity, and track purity from lab to final product.
Retail in the Cannabis Industry
Cannabis dispensaries are regulated retail locations that require a retail license awarded by the state. These licenses are in limited supply, and today, the big business of cannabis retail is in the form of MSOs and experienced entrepreneurs from other industries. This new form of cannabis business owner is focused on building differentiated brands, gaining market share, optimizing the customer experience at scale and with technology, and managing the supply chain with cannabis business intelligence. The COVID-19 pandemic greatly impacted how cannabis retailers operate, as dispensaries shifted to digitally powered businesses. More than ever, reporting and analytics became crucial to streamlining and scaling operations while maintaining compliance. The future of cannabis retail will be greatly impacted by the rise of the digital dispensary, labor costs saving practices, and advanced technology. You can read about the impact software has made on the cannabis retail industry by downloading our e-book, Retail in the Cannabis Industry.
When it comes to software, the success of a cannabis dispensary is based on its ability to integrate the appropriate technology into its supply chain management, customer relationships, and educational programs for budtenders and customers.
Distribution in the Cannabis Industry
As the “middlemen” of the cannabis industry, distributors are responsible for transporting cannabis products along the supply chain. Distributors must have a license even to move products between “non-connected” buildings of a single entity. To remain compliant, distributors are required to maintain meticulous record-keeping and detailed inventory management. As the legalization of cannabis continues to grow, so has the growth in cannabis distribution licenses, but in the near future, this may change. State agencies do not want markets to become oversaturated, and as a result, few distributor licenses are becoming available.
Software enables distributors to keep detailed records of each step in the distribution process, from logistics scheduling and order tracking to general manifests of product moving from the warehouse to the final point of delivery. Additionally, operational software integrations can increase automation and accuracy of financial management and records. Click here to read more in our e-book, Distribution in the Cannabis Industry.
As the cannabis industry evolves and continues to grow, technology has become a necessity for entrepreneurs and MSOs wishing to manage, scale, and optimize their business. With an advanced cannabis software solution like MJ Platform, cannabis operators can gain visibility into real-time data and actionable analytics across the operation and compliance throughout the supply chain.
