Guest Blog: Compliance is for the State. Traceability is for your Business
At any given time, there is a Delta9 Systems team member in California, Washington, Ohio, Michigan, and North Carolina. We travel a lot to be with our clients and customers. The cannabis business environment across the nation is dynamic, so it’s vital that we be out visiting with our customers where they are doing business. Each state is its own little microcosm of the cannabis industry, with its own unique blend of MMJ, Rec and Hemp laws. The micro-market in each state means there are unique challenges and advantages, and we need to be familiar with each one in order to serve our customers effectively.
Regardless of the market there is one constant all operators must contend with. All state governments require the cannabis producers and processors in the supply chain to keep real-time information about five main metrics: plant counts and stages, current inventory, the actions and conversions performed on that inventory, any transportation from one license to another, and records of any and all sales. When these records from cultivators are combined with the sales data from retailers, this data set is called the Seed-To-Sale record. This is the chain of custody record that will be used by regulators to ensure no diversion is taking place into the black market, tax revenue is collected, and that a recall is possible should there be any problems with contamination in the supply chain.
Some states demand up to the minute reporting, others ask for a monthly accounting. These reports are required to maintain compliance and keep the license operating in good standing.
In most states the regulating body in charge of cannabis will contract with a software service provider such as METRC, BioTrack or Leaf to handle industry data and present it in an actionable way for regulators. This reporting service is free for use by Producers and Processors, and each licensee is given a log-in to the system that is associated with their cannabis license. Reporting requirements are similar to DOR or DOL reporting obligations. While these 5 metrics are crucial, these numbers are what regulators need to track to not run afoul of federal guidelines. Cannabis entrepreneurs need to collect this data and much more to be successful…
This is where a Third-Party Integrator (TPI) is crucial. The Third-Party Integrator allows Producers and Processors to record and report the 5 mandatory data points to the state, while simultaneously capturing the incredible amount of intricate data generated by modern gardens and labs. As cultivators move through the compliance workflow, data about COGs, consumable depletion and inventory, scheduling, personnel, HR, and production processes can be collected and referenced while maintaining a compliant cannabis business.
We see the benefits becoming more apparent as time goes by in the shops that use TPI’s. The biggest benefit we see that TPI gives its users is the ability to get very specific with production scheduling and communicate that schedule efficiently. Scheduling becomes more and more important the larger an operation becomes. The gardens that always have plants ready for Mothers, Clones and Veg will always be flowering and more importantly, harvesting. Being able to use that schedule in conjunction with SOP’s means employees come to work with a list of tasks waiting on their daily dashboard. They can then mark each task, pulled from SOP’s and auto assigned to each employee, as complete and sign off on to make sure the job is done, accountability is established, and compliance is maintained.
Measuring productivity, and eliminating inefficiencies using the historical record generated by these Enterprise Resource Planning tools, or ERP, has a cumulative effect over time. Delta9 Systems consults with many different customers, some who use TPI/ERP, and some who don’t. As the Industry gets more mature, we are seeing huge structural advantages in the businesses who are implementing TPI. The seemingly tiny savings add up and have an exponential effect. Having data to make decisions saves time and resources, which translates to money. Using historical sales data allows a better planning for each round. We expect to see these advantages increase exponentially as margins continue to shrink and competition becomes fiercer.
365 Cannabis is working with the team at Delta9 Systems to verify hardware that is plug and play. Based on the Microsoft Dynamics 365 Business Central platform, this system delivers the robust workflow support that cannabis pros need. The cultivation tracking is very simple, but the processing workflow tracks COG extremely well through each operation, and the sales tools are hard to beat. It integrates seamlessly with other Microsoft productivity programs you might already be using so the training and ramp up is simple. The scheduling tools give cultivators a great way to plan for orders months in advance, and create plants based on pre-orders. Most importantly, because it is windows based, you won’t have problems with drivers or software compatibility. Schedule a demo today!
This article was provided by Delta9 Systems