With cannabis legal for medicinal purposes in 36 states and entirely legal for recreational use in 15 (and D.C.), the cannabis market has rapidly grown and matured in a short amount of time. It is now a multi-billion-dollar industry, where new markets have emerged, new supply chains have developed, and new regulatory changes are enforced. To help meet the growing complexities and navigate the shifting landscape, cannabis owners and operators are turning to integrated business process management technology, like cannabis ERP.
In this article, we share everything you need to know about cannabis ERP software, including what it is, how it works, what functionality is included, and when to know you need it. We have also provided some tips on how to select the best-fitting software for your growing cannabis business.
What is Cannabis ERP?
Cannabis enterprise resource planning (ERP) software is a category of business software that connects all critical areas of a cannabis business in a common database. It is comprised of several modules that address specific business requirements, including accounting, sales, order management, inventory, manufacturing, project management, human resources, etc.
Cannabis ERP software acts as an all-in-one solution that combines essential seed-to-sale functionality with much-needed back-office features to successfully run all facets of a cannabis operation. That means it provides all of the tools necessary to manage financials and customers, track sales, produce accurate reports, and regulate inventory from planting to final sale.
How Does a Cannabis ERP System Work?
While there are many types of cannabis technology solutions out there, like traditional seed-to-sale software, none of them provide the same complete business and data management functionality as ERP software. There are a few central features that make a cannabis ERP system distinguish itself from other types of software. The first is its central database and standard data structure, which eliminates the need to manually consolidate data across multiple systems and keeps everyone on the same page. By providing one system of record, you can ensure consistency across your entire cannabis business and always be able to access the most up-to-date information.
This also ties into business process integration. ERP provides one platform to support and integrate your most important data, connecting business processes and workflows to increase operational visibility and boost productivity. ERP systems provide a heightened level of insight into operational performance that allows cannabis businesses to identify areas of improvement or opportunities for expansion.
Another definitive feature of cannabis ERP is automation. Cannabis ERP software gives you the ability to automate repetitive, time-consuming tasks such as invoicing, order processing, and reporting. Automation reduces errors and data entry, which ultimately gives your employees their time back, making them more productive and focusing on other value-added areas of the business.
Today, ERP systems come in all shapes and sizes. Depending on your existing infrastructure, goals, budget, and business requirements, you can choose to deploy cannabis ERP on-premises or in the cloud. The traditional on-premises solution is installed locally and requires your own computers and servers to manage. It is better suited for larger enterprises with a need to customize and an existing infrastructure to host and maintain data. Cloud-based software-as-a-service (SaaS) cannabis ERP, on the other hand, runs on remote servers managed by a third party and only requires an internet connection to access the application. Cloud ERP is ideal for small to midsized businesses (SMBs) in need of lower upfront costs, ease of access, system stability, and future scalability.
What Functionality is Included?
Every ERP system comes with a specific set of modules to help a company run its business. If you are in the market for cannabis ERP software, there are many types of ERP solutions specifically built for the cannabis industry. It’s important to understand what functionality is included so you can select the right software for your cannabis operations.
Here are some of the must-have cannabis ERP functionality to consider in your search:
- Financial Management
Accurately track the income and expenses, manage your budget, analyze financial performance, and use financial reports to always ensure you remain in compliance.
- Sales and Customer Service
Easily record customer details and sales, manage customer relationships, keep track of inventory, and boost sales revenue.
- Inventory Management
Keep track of individual units of stock across multiple locations, including warehouses and retail locations while gaining 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.
Track your plants and products every step in the supply chain, including where your products are planted, harvested, processed, and sold for performance measurement, inventory control, and compliance.
- Cultivation, Processing, and Manufacturing
Essential seed-to-sale functionality should be included in any cannabis ERP system to monitor and automate crop performance, forecast crop yield, and ensure growing space is utilized as efficiently as possible.
- eCommerce and Retail
Create a seamless online and in-store customer experience while tracking and analyzing customer purchases with integrated point-of-sale (POS) and inventory management.
- Resource Management
Across agricultural, manufacturing, warehousing, logistics, and retail operations, ensure you’re optimizing every facet of your business with the proper resources at the proper time.
- Reporting and Business Intelligence
With integrated data gathering and customizable reporting across business operations, get real answers on plant production, operational efficiency, quality outcomes, and financial performance.
For more details on each of these modules and to read more about the 7 essential components of effective cannabis ERP software, download our Cannabis ERP Software Buying Guide below.
How Do You Know it’s Time to Consider a Cannabis Solution?
According to a recent report from PwC, much of the technology currently used by cannabis owners and operators today is “rudimentary, unscalable, and unsustainable.” With over 30 years of helping customers of all backgrounds and budgets with their technology stack, we know some of the major signs that your business technology is holding you back. If you have started noticing inefficiencies across your cannabis business that are impacting employee productivity, data integrity, operational costs, customer satisfaction, and your ability to stay compliant, your current technology and infrastructure may not be able to support your cannabis business moving forward.
The benefits that cannabis ERP provides truly outweigh the costs and resources required to purchase and deploy ERP software. Here are some of the biggest advantages of implementing cannabis ERP software:
- Increased financial and operational visibility
- Enhanced process efficiencies across the supply chain
- Extensive cost savings
- Better tracking and quality control
- Access and share real-time data from anywhere
- Improved employee productivity
- Boosted customer satisfaction rates
- Increased data security and control
- Reduced regulatory and compliance risk
- Accurate data-driven reporting and decision making
The right cannabis ERP solution should be user-friendly, affordable, and scalable to meet your organization’s needs today and in the future. Download the Cannabis Technology Handbook: How Tech Can Help Your Business Succeed to learn more about how technology can help your cannabis business succeed.
How to Select the Right ERP System for Your Operations
Now that you understand the enormous value that ERP can bring to your growing cannabis business, it’s time to talk about implementation. Every major business technology investment requires a significant amount of time, resources, money, and planning to be successful. The end result will drive efficiency, boost productivity, and increase profitability, but you do have to do your due diligence beforehand in order for it to run smoothly.
The problems arise when you choose the wrong software or partner. There are a number of different nuances, requirements, and complexities in the cannabis industry that are both unique and critical to success. The cannabis ERP system you select should not only speak directly to these problems, but it should fit your objectives, people, processes, and budget. By partnering with a trusted provider of cannabis-specific software, cannabis businesses can trust that their platforms and processes are in the right hands—with a partner that understands the industry and the coming challenges it faces.
If you are interested in learning more about cannabis ERP and the implementation process, please reach out to our experienced business technology and cannabis experts. We are here to answer any questions you have on cannabis ERP software and help you select the right solution for your budding business.