Compliance in the cannabis industry is constantly evolving, and, as cannabis’ legal status continues to vacillate, things are only expected to increase in complexity before a “gold standard” is set.
To protect employees and consumers — as well as the business itself — cannabis companies must create a discrete strategy, one grounded in trust of data — the data that’s driving business decisions.
The risk associated with error, and not being prepared for future compliance changes, creates a need for a solution — and an approach — that can adapt and scale to each company’s requirements.
What is an Enterprise Solution?
An enterprise solution is software that addresses the needs of an entire organization, rather than one aspect of the operation.
This software can often be customized for one’s specific business needs. Enterprise software allows a company to manage and optimize daily processes using a singular system.
A Full Scale Transformation
By implementing an enterprise solution and corresponding best practices, cannabis companies can mitigate the risks that come with being in the heavily regulated industry — now, and in the future — and gain a competitive advantage over those who take a piecemeal approach with their solutions.
Enterprise solutions can reduce manual entry, help create uniform practices for tracking and quality, and provide a single platform for data (what’s often referred to as a “single source of the truth”).
With this approach, companies can scale in operations and in complexity, as needs arise.
As they scale, some businesses will still rely on employees to manage manual processes and ensure safeguards are in place to protect everyone.
Long-term, though, this approach will require additional headcount to maintain. Still, many cannabis organizations feel the pressure to operate this way, in order to put out small fires that constantly arise.
Compliance Amidst Great Regulation
Certainly, visibility and automation can feel like luxuries, especially when the industry is evolving so quickly.
However, for a non-regulated business, the risk of relying on manual processes — while real — is much smaller than that for a highly regulated industry.
Compliance in the cannabis industry is critical.
Take this example: A cannabis grow facility might rely on its employees to manually enter movement and quality details for a “Mother Plant” into Excel.
As a result, they would upload or enter data into the system in batches, which would then be pushed out for reporting. Managing inventory in this manner might work well for a paper manufacturer as they grow.
However, having an employee track goods movement via hand-keyed information only increases the potential of error and non-compliance for a regulated company.
If a regulatory agency finds this business is being irresponsible and failing to accurately manage its inventory, there can be severe penalties and blocks placed on them.
The implications for failing to meet compliance in the cannabis industry are huge. It can lead to being stripped of licenses, millions of dollars in fines, a severely damaged reputation, and more.
Managing the Compliance Opportunity
Proper compliance in the cannabis industry touches many aspects of the business, not just in inventory management.
From seed to sale, traceability, quality management tracking and, in some states, third-party validation are important requirements that must be accurately reported.
Not to mention regulations around the cannabis product, including each item’s safety, packaging, and labeling. Each requirement must be actively checked for and confirmed.
Fortunately, an enterprise solution offers a place for everything to be verified, tracked and audited — alleviating the risk that comes with making decisions and reporting on old, human-impacted data.
How an organization manages its overall compliance strategy can also affect its competitive advantage — by impacting customer experience and trust with buyers.
In addition to managing the product and plants themselves, the company must manage customer experience and safety by preventing things such as customer looping, and by ensuring consistency in the quality of products it sells.
With fragmented legislation today interfering with the ability to offer a consistent brand and product experience state to state, it’s important a company does everything possible to maintain consistency elsewhere.
As a cannabis company, there are many pathways toward elevating your competitive advantage. One of the biggest is through customer experience.
When considering your compliance strategy, think like a customer: Prioritize consistency and safety.
Creating consistency for customers requires a strong understanding of each market segment within your target market. Consider what an enterprise solution has to offer on top of compliance.
- Each step of the product’s journey can be tracked and measured.
- COGs can be established and reported on.
- Sales can be followed and predicted, based on strain, location, and quantity
A system that provides accuracy and data management provides customers with a product they can rely on, at a price they can expect.
And since your company will know where they shop the most, you can ensure it will be in stock when they arrive — consistently.
A safe and reliable experience is essential to alleviating the fear that many customers still associate with cannabis.
The industry has taken critical steps in this direction in recent years. Customer looping is easier to prevent. Data is easier to track. Product sales are easier to validate.
Put another way, cannabis companies that can offer quality and safety checks are giving customers added certainty that their products will meet expectations — and that they’re safe to bring into their homes.
Companies can begin to truly operate as advocates — for their industry and for their customers.
Enterprise solutions will only increase the level of trust, automation, and flexibility a cannabis company can provide, in a way custom-point solutions and manual processes simply cannot.
They are already used in many highly regulated industries, and now cannabis companies must learn how to use them to address contemporary compliance requirements, create an auditable approach and to adapt seamlessly to future changes.
Compliance in the cannabis industry can be a challenge, but, by taking these steps, cannabis companies with initiative can stand out above the rest and help set the new gold green standard.