The cannabis industry has undergone a tremendous amount of growth and maturation in recent years. Recreational cannabis is now fully legalized in 18 states, and 38 states have legalized it for medical use.
However, the lack of federal legalization makes for a fragmented industry where operators are forced to build their businesses state-by-state. Inconsistent laws at the state-level and restrictive regulations limit the ability of most smaller operators to scale. As a result, multi-state operators (MSOs) are starting to expand their footprint, leading to rapid consolidation across the industry.
Just last year we had two of the largest industry acquisitions on record. Global pharma company Jazz Pharmaceuticals agreed to buy GW Pharmaceuticals, one of the largest medical cannabinoid companies in the world, for $7.2 billion. Florida-based multistate operator (MSO) Trulieve Cannabis acquired Arizona-based Harvest Health & Recreation in a deal valued at $2.1 billion.
With consolidation expected to continue, the need for an enterprise resource planning (ERP) software is quickly becoming a question of “when,” not “if”, for many cannabis operators. How do you know when your business is ready to make that transition from seed-to-sale to a cannabis ERP solution?
Seed to Sale Software vs. Cannabis ERP Software
At this point you might be thinking, “Wait, I already have seed-to-sale software. Isn’t that the same thing as an ERP?” If you take nothing else away from this blog, know this, seed to sale software is not the same as an ERP. While the terms are often used interchangeably, there are fundamental differences in their features and functionalities.
Seed-to-sale software, otherwise understood as cannabis tracking software, is typically used by small to medium-sized cannabis operators to track each individual plant as its grown, merchandised, and distributed throughout the cannabis supply chain. It is used by manufacturers, growers, dispensaries, and local governments to ensure product safety and maintain compliance.
Cannabis ERP systems offer much of the same functionality as seed-to-sale (it can also be used to track your plants). However, an ERP also helps you manage all of your critical business functions, from finance, to operations, to seed-to-sale, compliance, quality, and traceability – all within a single solution.
When to Transition to a Cannabis ERP Solution
In the early days of legal cannabis, the primary concern for operators was compliance. While seed to sale software has proven to be capable in this regard, it is limited in its overall functionality, forcing operators to rely on multiple systems.
As a growth-minded company who has plans on expansion, you will inevitably reach a point when your seed-to-sale software, despite all its compliance and tracking benefits, starts to hinder your growth. You have to find ways to streamline your business.
A true cannabis ERP eliminates the need for multiple systems. It brings together seed-to-sale functionality with back-office features to run all facets of your business efficiently, from sales, inventory, payroll, reporting, compliance, and many other critical operations. Having a single source of information ensures superior data integrity across your organization, freeing you up to focus on the aspects of your company that really matter to you (not just compliance).
Making the Transition
Regardless of what stage you’re at in the business lifecycle, if you have plans on expanding, it’s important to keep the big picture in mind. Start thinking of your tracking software beyond a simple compliance tool, and start thinking how it can help you effectively manage every aspect of your business. Request a demo of 365 Cannabis today!