Setting The Table

The cannabis industry has matured over the years; it all started with a wave of enthusiasm and market participants, many running lean, mostly manual operations with bright-eyed talent spanning all sorts of professional backgrounds. Since then, there has been massive consolidation within license holders across North America. A good chunk of the once enthusiastic talent has left and returned to more ‘traditional’ and ‘stable’ sectors like pharma, food & beverage, natural health products, etc. The remaining players in the game are almost certainly in a better financial position than they were say 5 years ago. That said, we are entering a new dawn where operational excellence and margin control will differentiate the truly blue-chip operators from the rest and set the table for truly explosive growth once some much-anticipated regulatory catalysts come to fruition. 

Why Cannabis Needs a Purpose-Built Tech Stack

• Extremely high regulatory burden with unique jurisdictional requirements (i.e. GMP, GACP, GPP, Health Canada, state regulatory agencies, etc.)
  
  
• Traceability requirements currently exceed requirements from most other manufacturing verticals
  
  
• Talent shortage and turnover are huge issues for the sector and tech can not only help automate some gaps, but also help reinforce the processes & policies that contribute to a company’s knowledge base and culture (i.e. quicker onboarding & integration for new hires)
  
  
• Margin pressure is a constant in a highly-competitive, highly taxed sector like cannabis – tech drives efficiency and risk reduction 
  
  
• Combine the high turnover with the high regulatory burden and you have significant compliance risk; when process knowledge and records live in local folders or on personal devices, they often leave with departing employees. Purpose-built systems centralize information for long-term knowledge retention and help ensure continuity and reliable task completion as personnel change

The Tech Stack (4 Layers)

1st Layer = Foundational Layer: Compliance & Quality -  this layer ensures you ‘pass the audit’ – not just run the operation.

A QMS serves as the governance layer that defines SOPs, validation, training, and record retention across every technology in the stack, strengthening control during implementation and ensuring consistent, compliant operation after.

• eQMS (electronic Quality Management System) – includes Document Control & Training Mgmt. as well as management of CAPAs, Deviations, Complaints, Change Controls, Audits, Suppliers etc.

2nd Layer = Operational Execution Layer –  this layer ensures you execute batch runs smoothly and efficiently

• Cultivation / Manufacturing / Inventory Software (i.e. seed-to-sale platforms) – grow room data tracking, inventory, production and labour tracking, batch records as well as METRC/CRA/State Reporting support
  
  
• IoT / Sensors – temperature & humidity monitoring, lighting controls, predictive and reactive maintenance alerts 
  
  
• CMMS (Computerized Maintenance Management System) - integrated maintenance management for all equipment/assets across the operation*

*Note: some eQMS platforms come with built-in CMMS functionality out of the box, likeC15 Solutions

3rd Layer = Financial + Enterprise Systems – this layer ensures dollars and people are accounted for and looked after

• ERP / Accounting Software – tracks market value of inventory, chart of accounts, AP/AR, purchasing, cost allocation/COGS etc. Some S2S/MES platforms mayhave this functionality but most do not. 
  
  
• HR Software / Payroll – time tracking, onboarding workflows (may be integrated with eQMS), safety & training alignment w/ QMS, overtime cost control
  
  

4th Layer = Commercial & Brand Enablement Systems

• CRM / Pipeline Mgmt. – dispensary relationship management, wholesale sales planning, pricing & promotion management
  
  
• E-Commerce / Marketplace Integrations – B2B ordering portals, provincial boards/distributor API support

Bringing it all Together

One of the big benefits of using technology, above and beyond the benefits touched on above, is that it often results in the standardization of your data. Put simply, standardization of data leads to better reporting which leads to better analysis which leads to better business decisions. 

• Step 1 is to implement the stack.
  
  
• Step 2 is to refine/customize processes and workflows across the tech stack so it meets your unique business requirements.
  
  
• Step 3 is to integrate relevant tech with one another such as integrating your eQMS with your S2S or ERP – this ultimately creates a single source of truth (less data errors/discrepancies), and reduces time to market by enabling production and quality to work seamlessly together.
  
  
• Step 4, which is totally optional at this point but may represent a competitive advantage, is applying artificial intelligence (“AI”) to your systems to execute robust data analysis and deliver operational insights.