The Importance of Supply Chain Transparency in the Cannabis Industry

Cannabis is an industry continuing to struggle with often dramatic and unpredictable growth. The climactic rise in demand for cannabis products means increased profits for cannabis operators but also adds pressure on cannabis-related companies to meet customer demands for quality and consistency.   

The Cannabis Supply Chain at a Glance

THC and CBD, the most sought-after compounds in marijuana, can be introduced to the body in a variety of forms (vaping, edibles, through the skin, etc.), making the opportunities for new and innovative cannabis products unlimited.

Significant challenges surface when bringing all these products to market consistently and without interruption, especially given evolving regulatory requirements. Let’s take a look at how marijuana travels through the legal cannabis supply chain.

Stages of the Cannabis Supply Chain

The cannabis supply chain incorporates five stages: 

  1. Cultivation of the cannabis plant 
  2. Extraction of cannabinoids
  3. Cannabinoid testing
  4. Cannabis Distribution
  5. Retail Cannabis

While it seems relatively straightforward at a glance, the cannabis supply chain gets more complicated the further into each stage you get. Consider the sheer number of products from various categories that include everything from cannabis-infused food and beauty products to oil extracts to personal growing equipment and guides. 

Unfortunately, some growing cannabis companies still perform inventory management, procurement, and reporting by fax, email, and spreadsheets instead of more sophisticated accounting and supply chain management technology.

Cannabis companies facing increased dependency on their supply chain can implement best-in-class supply chain technology like Cannabis Enterprise Resource Planning (ERP) to maintain customer expectations while remaining poised for steady growth and what lies ahead. 

The Importance of Cannabis Consistency and Predictability

Just like the food and beverage, the cannabis industry is driven by consistency and predictability. Whether it’s color, taste, aroma, or other product characteristics, consumers want a predictable, repeatable experience. Mountain Dew tastes the same in virtually every corner of the world, Chick-Fil-A chicken sandwiches come with the same texture, taste, and look every time. This has a lot to do with their supply chain management. 

Today the cannabis industry faces a similar challenge: providing product consistency to establish and keep repeat customers. When cannabis customers purchase and consume a product, they expect the same taste and effectiveness experienced each time they purchase a particular product. 

Cannabis ERP in High Demand

Cannabis businesses without standardized supply chain management and vertical integration from seed-to-sale risk losing customers due to product availability gaps and inconsistencies. This is an even bigger challenge for companies that operate across many states or jurisdictions.

Read Next: How much do you really know about Seed-to-Sale software?

The high demand for cannabis ERP continues because it helps cannabis operators understand, manage, and overcome the rapidly changing regulatory environment while establishing complex distribution networks and scaling production.

The Challenge of Cannabis Compliance

Probably the most significant challenge for cannabis operators is the struggle for cannabis compliance. Coincidentally, the hurdles a company overcomes for compliance often help the reliability of its cannabis supply as well. As companies work to strengthen their compliance stance, the same initiatives also enhance the path to supply chain standardization. These include consistency in quality products that also impact consumer safety. 

When compliance is not an option and regulations demand meticulous reporting of the cannabis product’s journey from seed to sale, the tracking process becomes significantly more comfortable with a cannabis-specific ERP system.

Whether you operate as a cannabis cultivator or extractor, a manufacturer or dispensary, the supply chain management challenges faced by cannabis operators have a solution. Cannabis ERP tools help standardize complex supply chain operations, especially safety, compliance, and testing, and offer quality control features that can be customized to meet specific standards. By adopting the right cannabis ERP solution, cannabis operators get transparency to meet customer demands consistently. 


To learn more about modern ERP for your cannabusiness, contact one of our experts.

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A cannabis leaf