Cannabis businesses are having a moment right now. After 5 additional states voted to legalize recreational marijuana in the 2020 Elections (Arizona, Montana, New Jersey, Vermont, and South Dakota, for those of you keeping score), several additional markets are opening up in the near future. Factor in the consideration that cannabis businesses were deemed ‘essential’ during a period when many businesses didn’t know if they would survive, and it seems the cannabis industry as a whole has finally found the legitimacy it craved—and the future looks bright.
Along with that legitimacy, of course, comes the potential for growth—and plenty of it. The US market alone is expected to grow from $14.3b in 2019 to $147.45b by 20271, representing a compound annual growth rate of 29.1 percent. That’s nothing to cough at.
As they say, with great growth comes great responsibility—for cannabis businesses, the responsibility to ensure their supply chain is optimized, to ensure they remain compliant with laws and regulations at the state and federal level, to ensure that they’re running at maximum profitability to claim their piece of that $147b pie. So how is a scaling seed-to-sale cannabis business supposed to manage all of that in addition to growing crops, cultivating product, and selling it through their retailers? Through the magic of technology.
How Technology Benefits Cannabis Businesses
As the cannabis industry has evolved, so has its needs. Gone are the days where single-source mom-and-pot retailers ran modest operations. Cannabis is big business now, and the level of sophistication required to manage it has grown exponentially.
Here are a few ways technology can help cannabis businesses meet that requirement, navigate the new normal, and grow to meet the market’s demands:
By measuring your data: Any business, cannabis or not, is only as successful as the decisions they make, and those decisions should be largely driven by data rather than hunches or gut multiple sources—whether it be your point of sale system, inventory system, CRM system—and begin to make sense of it. What products are selling the best in which markets? Which plants are providing the greatest yields? Should you start preparing now for a busy season next year? BI software can help you answer all of these questions and more.
By selling online: Let’s face it—buyer behavior has changed. This was true BEFORE the pandemic and is especially true now. Nobody wants to change out of their pajama pants to schlep down to their local dispensary at 10pm on a Tuesday night—they want a seamless ordering experience like they’ve come to expect from Amazon, GrubHub, or any of the other businesses killing the eCommerce game right now. By setting up an eCommerce platform, cannabis businesses can unlock a new channel for growth and even help them reach new markets.
By helping with reporting: Compliance. Just reading that single word likely gave you a headache or sent shivers down your spine. Cannabis reporting can be a nightmare for businesses without the proper tools to do so—and the failure to do so accurately can result in fines or even having your license revoked. Compliance reporting is one area cannabis businesses don’t want to skimp on. Unpackaged and packaged inventory reporting, sales reporting, medical access reporting, business statistics, cannabis classes, and more must be meticulously tracked and regularly reported to regulators. BI software can help automatically measure important compliance metrics and simplify the reporting process.
By keeping track of inventory: Are your profits going up in smoke? Cannabis businesses need to meticulously track inventory—both for compliance reasons (there’s that word again), and to ensure they aren’t losing profit due to product sitting on the shelf for too long or expiring. Thanks to Enterprise Resource Planning software, cannabis businesses can keep track of individual units of stock across multiple locations, including warehouses and retail locations. You can also gain full visibility into the supply chain, monitoring units as they move from packaging to warehouse, to delivery to retail, and finally into the hands of the customer, gaining granular insight into each stage of the product’s journey—allowing you to truly track your product from seed to sale, and consistently optimize your supply chain and yield greater profits.
By knowing your customers better: At the heart of lifelong customer relationships is knowing what they like and building personalized experiences for them. Using CRM software allows you to track what you need to know about your customers: where they live, what they purchase, whether they’re a medicinal or recreational user, and other demographic information that can help you better understand your consumer. Using this data, you can begin delivering personalized experiences to them—either via your eCommerce platform when they’re shopping online, through email communications, or even in-store experiences.
These are just a few of the ways that technology can enable modern cannabis businesses to scale well beyond their current growth—and with that $147b forecast on the horizon, they’re going to have to. Learn more about the technology that will help your cannabis business boom in our free guide, The Cannabis Technology Handbook: How Tech Can Help Your Cannabis Business Succeed.