Advanced control / Business Strategist / Efficiency / Data Analytics / Process Innovation / Quality

THC...meet ERP

Digital approaches are enabling smarter production of cannabis.

Everything is in flux regarding cannabis. Public perception. Laws. Distribution. And like other fields in the agriculture / pharmaceutical space, cannabis professionals are adopting smart techniques to production.

We chatted with Tom Brennan, chief marketing officer at Rootstock Software, to get perspective from a

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Rootstock's Tom Brennan

provider of digital solutions in this emerging market. Take a look…

Smart Industry: Where does the cannabis industry fit in regarding Enterprise Resource Planning (ERP)/data focus in relation to other industries? Frontrunner? Laggard? Why? 

Tom: The cannabis industry is comprised of companies that are both laggards and frontrunners. Oftentimes, the laggards are startups that, when pressed to respond to market demands, have resorted to manual processes and entry-level systems. As cannabis companies experience explosive growth, however, their business needs quickly outpace the capabilities of these quick-fix solutions. As such, these companies began to experience scaling issues, as well as inventory-management problems.

Other cannabis companies are frontrunners. They are nimble, innovative and understand the scaling power of cloud architectures. Aphria, for example, recently completed implementation of our solution to automate, meet demand, and optimize profitability.

When laggards realize they need a more sophisticated enterprise solution, they often turn to cloud ERP. They want to leverage modern ERP capabilities and automate as much as possible. Luckily, those in the cannabis space are not weighted down by legacy systems or old ways of doing things, so they can make the shift to cloud relatively easily. They’re open to new ideas and want to fully leverage technology as part of their business models. So, even laggards can convert to frontrunner status.

Smart Industry: What types of data are we talking about? How is this different than traditional agriculture/pharma initiatives?

Tom: There are definitely similarities with agriculture and pharma companies, but it is more complex in some ways. Cannabis companies have many of the same FDA requirements as food, drug or medical-device companies that require extensive quality controls and the need to follow Good Manufacturing Practices. What’s different is the reporting that each state requires in order to track cannabis material from seed to sale. This type of reporting can have nuanced differences by state. Ultimately, regulating bodies want to ensure cannabis companies can account for the quality of their products, whether the cannabis is turned into a medicinal product, an edible, or becomes spoiled or wasted as part of the manufacturing process.

Smart Industry: What unique challenges/opportunities are there with ERP in the cannabis world?

Tom: At the moment, most cannabis companies are struggling to properly manage inventory and optimize production for the raw material they can acquire, so they need an industrial-strength ERP system to plan and produce more optimally.

The other issue is making sure quality management, compliance and customer service are all embedded in one system. Recent events in the news have highlighted the need to react to customer issues quickly and correctly. Legal cannabis companies compete on quality versus the black market, so management of quality is critical to their business strategy. Therefore, ERP systems need to help them produce, test and ensure that they are producing quality products.

Furthermore, ERP needs to be tied to customer-service systems when a complaint does arise. Are they handling that issue quickly, documenting it correctly and tracing the problem to the source of the issue back into production? This is where detailed track-and-trace ERP capabilities with a call center and quality-management system is critical. Finally, reporting is a big issue. Beyond classic business reporting and FDA reporting, cannabis-specific reporting is required in each state.

Need to dive deeper into ERP? Join peers and experts at Smart Industry Base Camp. Click here to learn more.

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