COVID-19 illuminated an issue in the cannabis industry that requires serious attention. Retailers and suppliers remained largely unprepared for oscillating market trends and regressing global trade dynamics over the past 6 months. Unprecedented buying behaviors, siphoning of product hardware, lack of protective equipment and more have challenged already precarious supply chain infrastructures in several states1. This issue highlights a fundamental question: how will cannabis supply chains deliver high-quality products with greater consistency and foresight?
Cannabis supply networks’ inability to scale to meet demand and persist through disruption has existed for a while. It’s not exclusive to the pandemic. Between seasonal availability, transitioning laws and regulations, and the introduction of distribution companies into markets such as California, cannabis businesses have struggled to adapt to changing market conditions. However, the recent pandemic has created an opportunity to consider new ideas on maintaining supply continuity, both in the face of global disruption and in the cannabis industry at large.
Enjoying this article? You may also enjoy this White Paper:
How Cannabis Companies Use Quality as a Game ChangerDownload Free White Paper
For an essential service industry such as cannabis, it is imperative to uphold supply continuity as many customers rely on the plant’s medicinal properties in everyday life. What kind of practice would support this effort? In a blog post earlier this year, MasterControl’s David Butcher offered an impactful solution on a general level: more visibility into the supply process and stakeholder collaboration. These intertwined practices enable supply networks to scale effectively and address emerging supply problems before they become widespread. Cannabis supply chains must undertake these initiatives to maintain the flow of medicinal products into the market, simultaneously ensuring no excess spend (especially in these difficult economic times). Fortunately, a means for suppliers to achieve greater visibility, transparency and collaboration exists in relative proximity.
Where does a heavily-regulated cannabis industry find means for enhancing visibility and stakeholder collaboration? The answer lies within the system that oversees it: compliance data. These data frameworks – often understood as oversight tools of state regulators – are defined by the same essential principles. Compliance technology provides regulators with data visibility into each cannabis business and their transactions within a respective network of partners. Licensed operators already commit massive investments into maintaining their compliance data for the state on which they see no return. Utilizing compliance data thereby would support individual return and strengthened supply chains at large. The industry must unlock these architectures, whether to endure pandemic supply disruptions or to sustain itself into the future.
The Marijuana Enforcement Tracking & Reporting Compliance (METRC) system is a great example of discussing compliance data in terms of visibility and stakeholder collaboration. On a surface level, these principles can be seen almost immediately within its system3. Plant Tags record information on cannabis flowers. Packages contain the specifics of all inventory data; including product information, manufacturing, facility location, and more. Meanwhile, Transfers denote how inventory moves along cannabis supply chains. All information on inventory stakeholder involvement moves along these vectors to be evaluated and modeled for intervention by regulators, essentially creating a nexus of visibility and collaborative transactions. Why do supply chains not access this data? Because raw METRC data isn’t enough on its own.
Compliance data exists within METRC, but the patchwork for supply chains to better manage themselves must be developed outside of the system’s regulatory framework. Understanding METRC as a market device instead of a top-down control system helps guide the necessity for patchwork4. Patchwork organizes compliance data into resources that help both supply chains and regulators. It creates more efficient supply networks (for producing and competing together) in harmony with a more responsive state regulatory system5. Shared data becomes a generative driver for the greater cannabis industry. Shared visibility between stakeholders and state auditors prompts the production of safer and more valuable products in line with consumer needs. This needs to be sought after, whether as a solution to the pandemic or other long-standing problems6.
The cannabis industry has an immediate resource for improving visibility and stakeholder collaboration that will maintain quality supply flows: state compliance data. This data embodies the means to these methods, providing grounds for new patchwork models to help supply networks in the wake of all kinds of disruption. More importantly, the cannabis industry must abandon its top-down understanding of compliance regulatory systems and harness the power of data that ultimately defines these frameworks. Compliance data should be a shared resource for supply networks and regulators. This idea advances an actionable concept for maintaining the flow of products amidst disruption, empowering suppliers both individually and as part of a larger ecosystem of stakeholders and regulators within the industry.
Matt Dell is a copywriter and content developer based in Berlin. Currently the acting head of marketing at Outspoke, he holds a bachelor's degree in communications from the California State University, Los Angeles. He enjoys learning and writing about supply chain technology, the application of information architectures on the market and society at large.