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Cannabis

Person trimming a cannabis plant.

End of cannabis prohibition presents unique challenges to ERP delivery

By | Cannabis, ERP | No Comments
Person trimming a cannabis bud.

From harvesting to selling, cannabis companies have an array of unique challenges in the rapidly growing industry.

Few sectors have faced the unique challenges as the nascent cannabis industry. A product that was nearly completely illegal was suddenly legalized. That has set off a wave of complexities regarding supply chain management, inventory control, finances and compliance.

Cannabis companies find themselves facing complicated business processes, regulation, massive demand and growth, and a highly active climate for mergers and acquisitions. That’s why many businesses deploy industry-specific enterprise resource planning (ERP) solutions, designed to simplify the complex with tools, modules and features designed to address critical needs for cannabis companies.

Overall, it’s requiring cannabis companies to look for ERP partners that are nimble, adaptive and responsive. It’s also why the end of cannabis prohibition presents unique challenges to ERP delivery.

The ever-evolving cannabis landscape

As more U.S. states legalize medical and recreational marijuana and Canada legalized cannabis at the federal level, the number of businesses proliferates. Demand has been exceedingly high, with long wait times and rapid expansion for many cannabis businesses.

In 2018, the Brightfield Group released market analyses that the global cannabis industry was worth $7.7 billion (USD) in 2017 and was projected market lone projected that the global cannabis market would reach $5.7 billion in 2019 and $22 billion by 2022. That market expansion is projected at a compound annual growth rate (CAGR) of 60 percent.

Here’s another perspective on the scale of growth: the rising number of products. In 2016, the average dispensary had 94 different kinds of marijuana products available. In 2018, that average had grown to more than 150.

New businesses are changing quickly

Cannabis companies that have been open for business for just a few months are finding the demand is there to support growth. That’s meant companies are transforming from single sites to having a global presence in all regions of the world seemingly overnight.

Consider these stories making headlines in the past few months:

  • The Chicago Tribune reported that at least half a dozen cannabis companies have moved (many from the suburbs to the city) or expanded their headquarters, in some cases doubling their space.
  • Cannabis company Grassroots raised $90 million in venture capital, in part to expand operations from its 11 states to include locations in Illinois, Maryland and Pennsylvania.
  • Harvest Health & Recreation agreed to purchase CannaPharmacy, which has cultivation, manufacturing and retail facilities in four states. Terms were not disclosed.

What does this growth and expansion mean? An increasingly competitive industry with companies fighting for market share and faster speed-to-market rates.

Person looking at a cannabis plant.

Cannabis companies face varying regulations by jurisdiction, requiring precision data management and reporting tools.

Business challenges lead to consulting challenges

With an industry that’s essentially brand new and new companies popping up regularly, it’s a wild ride within the cannabis vertical. Most companies do not have an existing business model or well-established business models.

There’s also a lack of experienced industry professionals, especially given the newness of the industry. Coupled with evolving laws and regulations that differ widely from jurisdiction to jurisdiction and you have an industry that needs guidance and support.

These companies are seeking help from experienced advisors, meaning that business and management consulting in the cannabis industry has become an ongoing requirement, not just a temporary solution to handle implementation and launch.

“This is a lot of new information when you’re vying for your place in the cannabis industry. That’s why some businesses are turning to consultants to help, notes the Cannabis Industry Journal in a recent article. “Consultancy is a great and time-tested way to grow your businesses and keep a competitive edge. But just like every other industry, when you choose a consultant, there are specific things to look for and avoid.”

The journal suggests that businesses heed the following when searching for a cannabis consultant:

  • Understand expertise. Very few consultants are experts at all components of the cannabis business. You may need several different consultants to get the expertise you need in cultivation, manufacturing, dispensary operations, food safety, transportation, compliance, legal, finance and accounting, and human resources.
  • Know what success looks like. You need to set your own goals, which your consultant can help refine. The consultant can then work with you on the plans, processes, capital, permitting and operational changes necessary to achieve those goals.
  • Focus on what you need. Be sure you know exactly what you need help with, be it operations, inventory control, ERP software selection, cultivation management, pricing or product development.
  • Ask smart questions. You want to probe for the answers from potential consultants that will help you make an informed decision, including:
    • Relevant experience
    • Client references (past and present)
    • Time to be spent on your company
    • Timeline and planning process
    • Responsibilities and deliverables for both parties
    • Certifications and credentials, if applicable
    • What’s included in the fee and what add-on charges are
    • Any conflicts of interest, especially with competitors
  • Avoid questionable conduct. If your consultant does one of the following, look elsewhere:
    • Asks for equity as payment
    • Does not provide references
    • Avoids questions
    • Refuses to track time or itemize costs

Cannabis consultants need to keep pace and be ready to support rapid expansion and growth, along with global delivery of services. Consultants need to stay on top of the ever-changing legal environment, market, political landscape and company priorities.

They should understand and be adept at reducing the time to market for your company and its products. They also need to be conversant on the complexities of partner management in regions of delivery and emerging legislation.

One important area to consider is supply chain management. Rapid growth, demand for new products, and constantly evolving consumer tastes and preferences means there’s increasing pressure for more efficient and transparent supply chain processes.

Retail cannabis purchasing managers are spending too much time with antiquated (or non-existent) inventory management tools that make buying difficult to manage. Order management, quality control, integrated tax and sales functions in a cannabis ERP help company leaders make better decisions in the moment of need.

The complexity of compliance

Compliance comes in many forms for cannabis companies, with regulations emerging and changing at the local, state/province, federal and international levels. It can create a swirling array of different mandates, reporting requirements and data points in order to remain compliant.

The constant regulatory swirl means building a cannabis ERP architecture that can meet the myriad laws regarding privacy (including the General Data Protection Regulation (GDPR) requirements for residents of the European Union and stricter data privacy laws passed in 2018 in California. Privacy is likely to continue to be a major factor as ore jurisdictions take legislative action to protect people and their information.

That’s on top of regulations related to food safety, personal medical information and banking restrictions.

The cannabis industry is fraught with potential pitfalls that can trip up well-intentioned businesses. Here are a few of the most common issues that cause compliance problems:

  • Inaccurate or missing data. Each jurisdiction will have its own reporting requirements and mandates, and these various guidelines may be very different from each other. Your business needs an ERP that can track when sales receipts, inventory records and safety plans need to be submitted and in what format.
  • Poor inventory management. Inexplicable missing stock or inventory discrepancies can lead to severe fines and the potential loss of licenses to operate. Whether due to poor quality assurance, human error, employee theft or incorrect packaging, bad inventory control protocols and a lack of sound distribution management software can have serious consequences.
  • Illegal sales. Selling to underage persons, selling outside of approved operating hours or exceeding daily sales limits per customer can trigger compliance issues. Age verification, customer management and point of sale technologies can save major headaches for you and your employees.
  • Mislabeling products. Compliance mandates increasingly include rules about how cannabis products need to be labeled and packaged. Similarly, product safety laws must be followed, such as a California provision that all packaging be child-resistant and Colorado requirements that all edibles have a cannabis or THC warning.
  • Failing to pay taxes. Each jurisdiction has its own requirements for tax payments, including method of payment, timing and required documentation. A failure to follow your local tax laws can result in large tax bills, time-consuming and invasive audits and fines and interest levies for unpaid taxes.

Why the right cannabis ERP matters

Cannabis companies need industry-specific ERP solutions that address the rapid pace of growth, pressure to deliver on time and compliance issues that are all too common. They also need experienced partners to help guide them through the selection, implementation, training and optimization phases of software products that will improve efficiency.

At NexTec Group, we help companies in all phases of cannabis ERP decision-making. We help clients build implementation teams, establish change management plans, develop budgets, migrate data and train users.

Our consultants have deep product knowledge about the vendors and their products. We understand the features and benefits of each potential solution and help your cannabis business find the right solution to address your unique business needs. Learn more about technology that runs your CannaBusiness. by contacting NexTec Group today.

Insight.

ERP plus CRM: More than the sum of the parts

By | Cannabis, Chemicals, CRM, ERP, Food and Beverage | No Comments
Insight.

Integrating operational areas with customer relationship data gives your company new insights and efficiencies.

Enterprise resource planning (ERP) and customer relationship management (CRM) solutions offer great tactical solutions to businesses. Taken together, however, ERP and CRM are more than the sum of the parts.

An integrated ERP and CRM solution allows for real-time, actionable business intelligence, giving executives insights they need to make critical decisions in the time of need. Integration breaks down organizational silos and encourages collaboration. Learn more below about the benefits of integrating these tools, industry-specific examples and best practices for combining your solutions.

Benefits of ERP and CRM together

While no two ERP or CRM solutions offer the same features, in general, the roles of each can be defined as follows:

  • ERP: Back-end functions such as accounting, human resources, manufacturing and purchasing.
  • CRM: Front-facing functions like sales, marketing, customer service.

ERPs are built to bring synergy to core functions, providing transparency, a single source of data and improved collaboration and efficiency. CRMs are focused on providing a complete view of customer and prospect integrations, including marketing pitches, outreach, conversations and customer help requests.

Both are designed to build synergy among important functional areas, with the intent that shared knowledge helps to boost operations and outreach. By combining capabilities, you’ll be able to deepen the interconnectedness of various parts of your business.

“The main arguments for the integration … focus on obtaining in real time a coherent view of customers – the possibility of continuous access to everything relating to customer data and information, which … is needed for its proper operation,” state the authors of a recent paper on ERP and CRM integration. “A consistent view of the customer allows employees to make the right and quick decisions.”

Here are a few of the most essential benefits of bringing ERP and CRM together:

Seamless data sharing

CRMs and ERPs have their own unique data collection, storage and formatting guidelines. The advantage of integrated systems is the ability to provide everyone with a unified, transparent and consistent set of information. When the two solutions are integrated, changes or alterations made in one system should be reflected simultaneously in the other.

As business needs change and new data, fields or calculations are needed, the connectivity allows for continued consistency. The system integration allows for new insights, needs and opportunities to be available to each operating unit.

Optimized resource management

Consider the opportunities with a clearer, automated flow of information from sales to production. Companies can gain advantages on production planning, warehouse space optimization, supply planning, materials purchasing and production order prioritization. This benefit helps companies with long sales and manufacturing cycles to plan better based on the status of customer commitments, allowing companies to reduce carried inventory and begin production soon after an order is confirmed.

Faster delivery cycles

Companies with a free flow of information can track and share information on customer details and orders, leading to more accurate and timely shipments, lower operating costs and improved customer satisfaction with on-time deliveries.

Improved product forecasting

Linking marketing initiatives and projections allows for faster and more accurate production forecasting. Operations teams will be able to plan more accurately and companies will not tie up cash by buying excess inventory.

Appropriate and accurate sales proposals

If your sales professionals can see a customer’s complete history – order history, current balance, payment pattern, credit limit and unpaid invoices – proposals will be more consistent and appropriate. Information that’s readily available helps sales managers to make informed decisions, such as asking for down payments or full payment up front.

Sales reps using an integrated solution also have access to the most recent, updated pricing information, including any promotions or discounts. They can also provide more accurate production and delivery dates by accessing production schedules, inventory levels and requisition schedules. If merchandise is out of stock, salespeople can relay that information to customers early on in the proposal process or provide precise projections on timing.

More sales opportunities

Giving salespeople better access to order histories, leads and customer service requests helps them to frame their pitches, giving them a much better likelihood of securing a call, an appointment or a deal. Knowing the frequency of reordering, for example, helps sales professionals reach out proactively to up-sell or cross-sell products or services. When equipment is reaching the end of its predicted lifespan, salespeople can suggest new models of an old product.

Better consistency and standards in customer engagement

With an integrated CRM and ERP solution, your employees will have complete and current information on customers. Whether it’s a sales call, a help request, a product question or a delivery inquiry, employees will understand better the complete relationship, sentiment and pain points. Complete and timely data, collected from both systems, helps employees understand and respond better to customers.

Responsive approval processes

Give your salespeople access to ERP information in real time and they can move contracts through the approval process faster. Same-day signing means faster contract approvals and reduces the time it takes for revenue to be recognized.

Prompt billing and payments

Document sharing lets businesses quickly turn accepted proposals into work orders that can be tracked throughout the enterprise without manual intervention. This process simplification carries over to the finance functions, allowing for faster creation and distribution of invoices, drawing from a single data source. Faster billing leads to faster payment turnarounds and better cash flow.

Consolidated reporting

Combined systems allow for better and more automated reporting, visualizations and data analysis. Reports pull in data from both systems without the need for manual manipulations, conversions or adjustments.

Linking icons.

Applying ERP and CRM data has powerful functional advantages in the food, chemical and cannabis industries.

ERP and CRM industry applications

ERP and CRM solutions need to be uniquely suited to the industry they’re serving. Businesses like food and beverage production, chemicals and cannabis have unique functions and needs for both systems separately and together.

Here is a look at how ERP and CRM integration gives companies in those industries the capabilities essential for success and competitive advantage.

Chemicals

Chemical companies need solutions that address complex functions, including:

  • Formula and recipe management, measure conversions, shelf-life management, packaging and labeling
  • Rapid batch scaling in different sizes and formulations
  • Quality controls that can track – and report to customers and prospects – product quality, shelf life and expiration dates
  • Process design improvements based on customer needs, historical trends, costs and operations
  • Rigorous regulatory compliance mandates, including federal, international, state, local and industry standards
  • Lifetime customer value measurements
  • Worker safety
  • Tracking products from warehouse arrival to manufacturing processes (including intermediary products) to finished goods
  • Traceability forward and backward with ordering histories and delivery data

For process manufacturers, these systems allow for shared, real-time access to information that is valuable to the salesperson, marketing manager, warehouse chief, finance officer and executive.

Food and Beverage

Sound supply chain management is at the core of any successful food or beverage company. While these functions traditional reside within ERP solutions, a CRM integration provides even more opportunities for efficiency.

With tight margins, fierce competition and changing consumer tastes, efficiency is paramount. By integrating the customer relationship insights with operational details, food and beverage companies are able to leverage the three interconnected supply chain components – suppliers, stores/restaurants and customers.

Here are three benefits for food and beverage companies when their CRM and ERP solutions are integrated:

  • Lower operational costs. CRM tools help provide insights and ordering patterns that can improve ordering and inventory management, resulting in lower storage and spoilage costs.
  • Customer segmentation. Targeted sales by customer segments allow for optimized ordering based on demand, relevance and location. Segmentation also allows for better analysis of customer profitability, based on logistical and operational costs. Customer analysis helps finance, sales and operations teams to identify and distinguish between stable, regular business and variable or unpredictable customers.
  • Seasonality. Identifying ordering patterns allows for sales and procurement employees to track, predict and anticipate seasonal variances in demand.

Cannabis

With cannabis and CBD companies emerging and growing as more states approve medicinal and recreational use, businesses in this fledgling industry are seeking solutions. There is a critical need to manage the operational and customer sides, not only for better efficiency and profitability, but also to meet the scrutiny of law enforcement and regulatory agencies at the state and local level.

Cannabis companies need to track and access industry-unique data, such as the costs of materials and energy, growth rates, potency levels and cross-strain breeding attempts.

Integrating this information with customer demand, buying patterns and demographic data helps cannabis companies provide products that are most in demand and most profitable. Pricing, resource allocation and purchasing all benefit from a blending of customer and production data.

How to combine

Combining these two complex business solutions to maximize the potential of an integrated approach is a complex undertaking. Whether buying new solutions or integrating new ones, careful planning needs to happen. Among the key steps are:

  • Determining whether the integration is unidirectional or bidirectional
  • Identifying data and modules to integrate
  • Unifying headers, labels, tags and data formats
  • Mapping data and interfaces
  • Assessing existing and future reporting needs
  • Focusing on user experience
  • Training users

To manage the many complexities involved in developing a cogent integration strategy, companies turn to NexTec. Our integration specialists have extensive knowledge of the providers, solutions and features available and the expertise to deliver a seamless integration experience.

Take a free tour of Sage Enterprise Management to learn more about NexTec and ERP/CRM integration.

Cannabis cookies and cannabis leaves.

Edibles at the intersection of cannabis and food ERP solutions

By | Cannabis, Food and Beverage | No Comments
Cannabis Cookies with cannabis leaves.

Cannabis-infused cookies are a popular choice among consumers. Keeping them safe requires the right ERP solution.

As the cannabis industry grows, one of the most popular product categories is edibles. Such products are cannabis-infused foods and beverages that are consumed either for recreational purposes or to treat a health issue. They include candies, cookies, energy drinks, gummies and teas.

The issue of food safety is a complicated one for cannabis companies. In states where these products are approved for sale, there may be some local regulations and guidelines. However, with the absence of federal regulations, many businesses struggle to determine how to address food safety.

That’s where enterprise resource planning software (ERP) can play a pivotal role. With an ERP designed for the cannabis industry, you can address key food safety issues and be prepared for future regulations at all levels.

Here is a look at edibles at the intersection of cannabis and food ERP solutions.

Approaches to food safety compliance

Food safety for cannabis companies can touch on multiple issues, including some common to food and beverage businesses, such as:

  • Inaccurate labeling
  • Food-borne pathogens
  • Disease outbreaks

In addition, there are issues unique to the cannabis business sector, including:

  • Extraction methods
  • Bacteria and mold growth
  • Pest and pesticide contamination
  • Chemical exposure
  • Employee handling
  • Unintentional consumption or overconsumption of edibles

The consequences of a food safety event are potentially substantial, including liability and damage to reputation and public perception.

Some cannabis companies take a conservative approach and follow guidelines established by the U.S. Food and Drug Administration. The Food Safety Modernization Act establishes guidelines for manufacturers to use for identifying and addressing risks, sanitary transportation and certifying foreign suppliers.

For cannabis companies it’s complicated. Without federal regulation for such businesses, the FSMA does not apply. Yet states and municipalities have their own unique regulations and restrictions, meaning companies need to be mindful of many different guidelines to remain compliant.

Cannabis candies and buds in a glass jar.

Companies need to ensure that gummies, teas and chocolates containing cannabis are safe to consume.

Food ERP solutions and cannabis companies

Cannabis-specific ERPs help by providing the structure, integration and processes necessary to follow best practices for food safety. Here are some of the critical ways a cannabis food ERP can help:

  • Seed-to-sale management. Tools that track plants forward and backwards at every stage of growth and processing allow for specificity and detailed reporting.
  • Inventory management. Automation tools help improve the tracking and recording of important inventory data, including expiration dates, product quantities, RFID plant tags and serial and lot numbers. These data points help manage inventory levels, recipes, labeling, quality control, supply chain management and traceability. The tools also can automate accurate product label creation, expiration dates and testing for contaminants.
  • Recipe management. One challenge for the cannabis industry is the inconsistency of taste, texture and smell from batch to batch. Your food ERP should include recipe and formula management functions that track raw materials, revision history and production notes.
  • HACCP planning. The Hazard Analysis Critical Control Points planning details procedures to protect consumers from chemical, physical and biological dangers. Incorporating control points into your ERP lets you prevent and control hazards before they affect food safety.

Choosing the right cannabis ERP

NexTec provides cannabis companies with insights and industry knowledge to identify the right food ERP solution. Learn more about technology that runs your CannaBusiness.

Cannabis plant.

Sage Business Cloud Enterprise Management for the cannabis industry

By | Cannabis, Sage Enterprise Management | No Comments
Cannabis plant.

An enterprise resource planning solution helps cannabis companies meet demands for traceability and compliance.

The cannabis industry is experiencing extraordinary growth as more jurisdictions allow for personal and medical use of products.

In this time of growth, many cannabis companies are grappling with complexity, unique operational needs, regulatory mandates and efficiency concerns. Businesses realize they need the right suite of enterprise resource planning (ERP) tools to address those challenges.

A closer look at those needs reveals that Sage Business Cloud Enterprise Management for the cannabis industry is the right ERP solution.

New Challenges for a New Industry

If you’re the owner of a cannabis company, you’re likely facing an array of challenges while seeing extraordinary opportunity in the growing industry. Having an ERP solution that is designed for the cannabis industry helps address many of those issues, including:

  • Customer Analytics. Understanding your customer base is essential for any business. As cannabis companies grow and expand their market share, they need tools that provide them insights about product popularity, demand iand profit margins. Leveraging the data from yields, materials, sales, marketing and spending habits helps shape product selection, pricing and customer service.
  • Traceability. Cannabis companies have an obligation to track information about strains, growing conditions, product ingredients and customers. This responsibility requires transparency throughout the supply chain to meet customer expectations and the scrutiny of regulators and law enforcement. Distribution management software and analytical tools that are designed for the cannabis industry allows for seed-to-sale efficiencies, data collection and reporting.
  • Compliance. Most cannabis businesses are under the watchful eye of state and local regulations. There are also restrictions on banking, THC levels and pesticide use on plants. Complex tax guidelines also need to be followed. IN short, cannabis companies need systems that collect and report on data with precision, available in the moment of need and accurate. The right ERP solution gives your company the tools to meet myriad regulatory mandates and remain compliant.
  • Competition and Big Cannabis. As your business grows and demonstrates profitability, it becomes a target for other competitors eager to get a piece of the action. Large cannabis enterprises are purchasing and managing smaller operations. To be attractive to potential buyers and stave off the competition, your cannabis business needs a solution like Sage Business Cloud Enterprise Management that integrates financial, customer and product information to allow for better insights and decisions.
Cannabis oil.

The right cannabis ERP helps your company optimize growing conditions for better yields and to meet customer demand.

What to Look for in a Cannabis ERP

Sage Business Cloud Enterprise Management is a web-based ERP that offers the features necessary to run a successful cannabis business. The Sage solution includes modules that focus on financial management, supply chain management, production management and reporting and business analytics.

This powerful suite of applications delivers needed solutions for your business, including:

  • Crop management
  • Corrective Action / Preventable Action (CAPA) management
  • Seed-to-sale traceability
  • Inventory tracking
  • Integration with government regulatory systems

NexTec Group partners with Sage to offer customers the tools and functionality they need to succeed. NexTec has developed a powerful set of add-ons, called CannaBusiness ERP, that enhances you Sage Business Cloud solution

NexTec has developed powerful tools that work in tandem, with the Sage Business Cloud solution. Called CannaBusiness ERP, it’s a powerful set of add-ons that allow for more enhancements to the Sage Business Cloud product, including grow operations and optimization management, production scheduling, product forecasting and quality control.

Learn more about technology that runs your CannaBusiness.

Hand with cannabis buds.

Genetic tracking of cannabis and how your ERP choice can help

By | Cannabis, ERP | No Comments
Hand with cannabis buds.

Advances in genomics make it easier to map the effects of various cannabis strains.

Business management software in the cannabis industry has focused largely on seed-to-sale tracking, allowing companies to manage inventory, operating costs and pricing.

However, in the next few years, cannabis genomics is likely to become more critical for companies producing and selling cannabis products. Having the right enterprise resource planning (ERP) solution that can track and map those functions is essential.

Business leaders need to understand genetic testing of cannabis and how your ERP choice can help.

What cannabis genetic testing offers

Genetic testing has advanced greatly in the past two decades. Scientists are beginning to build a cannabinoid genome using advances in bioinformatics and DNA sequencing. Until recently, for example, little was known about which genes produced THC and CBD.

That has changed as we understand more about how the plant’s genetics work.

George Weiblen, a biology professor at the University of Minnesota, was one of the pioneers in cannabis genome mapping, starting in 2002. However, the U.S. Drug Enforcement Agency limited him to 25 plants at a time, and he had to establish the proper research environment and high-level security for the lab.

Weiblen’s work has paved the way for growers and sellers to leverage new potential.

Choosing for cause and effect

While breeders over the years have come to understand what different varieties can do to the mind and body, there has been classification system with scientifically proven and documented characteristics.

Better classification would allow consumers to find products with the genetic traits that are likely to produce the desired physical effects.

Customers looking for pain relief, for example, would no longer need to seek out varieties that only anecdotally are known for having analgesic properties. Companies very soon could begin developing products – including teas, snacks and other consumables – that could be used for sleep disorders, anxiety or sexual disorders.

Genome mapping can have other benefits for growers too. Flowering time, nitrogen use, drought tolerance and other characteristics could also be charted by strain to allow for better resource allocation and pricing decisions.

There may be other applications for the technology on the horizon, including the use of breeds for industrial hemp production, which is used in clothing, food and building materials.

Cannabis bud.

Businesses are now offering services that allow companies to better understand the genetic makeup of cannabis plants.

Business, the law and cannabis

Today, companies like Sunrise Genetics, a Colorado-based firm, are providing genetic testing services for cannabis companies for both personal and commercial use. Its services include plant identification, DNA marker screening and genomic-based breeding.

Growers also face a murky legal landscape with laws and regulations that vary by state. Some are looking to patent new breeding processes, breeds, products and production methods. As of December 2018, there were 61 patents issued with “cannabis” in the title. That number is surely to grow.

U.S. law allows for patents to be issued to plants. Whether the patents are enforceable remains to be seen.

Patent law is a federal issue. However, the DEA still classifies cannabis as an illegal controlled substance. In a lawsuit about patent infringement, a defendant could argue that federal law does not apply to an illegal substance.

On the other hand, patents could prevent anyone from growing patented plants anywhere.

Sorting it out with ERP

Your enterprise resource planning software should be one designed for the cannabis industry. Your ERP solution needs functionality that tracks seed-to-sale expenses and revenue, patient and customer management, inventory management. It also needs genetic tracking functions, allowing for the tracking of mother plants, clones, strains and genetic markers, with an easy correlation to sales information.

If you ever want to patent your work, having this documentation is essential.

At NexTec Group, we help cannabis companies select the right industry-specific ERP that helps manage and assess business operations.  Learn more about technology that runs your CannaBusiness and how NexTec can help.

ERP solutions

7 Elements of ‘seed to sale’ and how your ERP choice manages them

By | Cannabis, ERP | No Comments
ERP solution

Cannabis companies need solutions that integrate operations and data from seed to sale.

As more states legalize recreational and medical marijuana use, cannabis companies are finding increasing demand. These companies are looking for solutions that help them manage their enterprise, from seed to sale.

The need for a cannabis-oriented enterprise resource planning (ERP) solution has never been higher. By integrating data and access to information across all aspects of the company, cannabis companies can leverage considerable operational efficiencies and competitive advantages to using an ERP solution.

Here is a closer look at 7 elements of ‘seed to sale’ and how your ERP choice manages them.

Audit trails. Compliance is an important issue for cannabis companies that unfortunately is evolving rapidly and is likely to change frequently. States and local communities are adopting different requirements for cannabis sales. Your company needs an enterprise resource planning solution that can record and document all the different requirements. The solution needs to produce reports quickly for government regulators or law enforcement looking to ensure the business is operating properly.

Barcodes. Businesses need barcodes that can be scanned to track progress across multiple aspects of the seed-to-sale cycle. Your ERP should be able to track scanned information at every point from the time seeds are planted to finished products are purchased.

Inventory management. ERP solutions for years have included inventory management provisions that allow for accurate tracking and use. Cannabis companies need an inventory management tool that can determine what’s selling and whether adjustments need to be made to the strain that are grown or products to be stocked. Those analytical opportunities are just one of the reasons inventory controls are critical. If products go missing, it can be a major issue for regulators.

ERP solution

Cannabis-specific enterprise resource planning platforms address inventory controls, security and strain monitoring.

Point of sale. Your POS solution needs to be integrated into your ERP. POS software helps improve checkout times and improves accuracy, especially when tied into inventory management controls in real time. Accurate transactional data can be strategically important when deciding what to offer and how to price products. Tracking and storing this data is also a key element of most regulatory mandates.

Scales. Measurements need to be exactingly precise in the cannabis business. Some ERP solutions have built-in scales to ensure precision measuring and accurate tracking for inventory and audit purposes.

Security. Security is critical for cannabis companies. Access to data on customers and transactions needs to be protected as with any other retailer. Your platforms should have controls that manage access to products, sales and system information.

Strain Analysis. Cannabis companies have many strain options available to them for consideration. That’s why your ERP solution needs to have tools that will track seeds, plants and products by strain and correlate that information with growing costs, sales and pricing. You also want to be sure that you’re selling your customers the right strains as advertised.

Choosing the right ERP partner

Companies need the right partner to help in the selection of a cannabis-specific ERP solution. NexTec has partnered with leading cannabis experts to develop the CannaBusiness ERP software. Our solution addresses all of the 7 critical functions and provides our customers with seed-to-sale operational control.

With CannaBusiness ERP, your company can:

  • Manage grow operations
  • Process plants
  • Coordinate shipments
  • Maintain compliance
  • Trace and track plants
  • Manage patients and customers
  • Manage the supply chain
  • Ensure quality control

Learn more about technology that runs your CannaBusiness.

Cannabis leaf.

2019 ERP trends for the cannabis industry

By | Cannabis, ERP | No Comments
Cannabis leaf.

Cannabis companies have remarkable opportunities to improve operations, deliver new products and gain credibility in 2019.

As more cannabis businesses are licensed and open for business, the fledgling industry is likely to see dramatic change in 2019. Many cannabis businesses are realizing they need an industry-specific enterprise resource planning (ERP) solution to address rapid growth, regulation and management.

A look at 2019 ERP trends for the cannabis industry shows the challenges cannabis companies face and how the right technology can mitigate those issues.

Complexity. The cannabis industry has grown at remarkable rates, especially with expanded legalization for medical and recreational use in the United States and Canada. Demand is high and likely to remain there, meaning cannabis companies need to address customer service and operational efficiencies. With the right ERP solution, companies can simplify that complexity by managing finance and operations in one system, automate tasks, stop manual errors and manage staff activity and tasks.

Regulation. Recreational marijuana use is now legal in Canada and 10 states, with three states approving medical marijuana use last year. With more likely to follow in 2019 and beyond, cannabis companies need an ERP solution that provides for better reporting from multiple jurisdictions. Your business needs a solution that uses automation and data collection tools to monitor, track, report and document processes, payments and other information sought by regulators.

There’s a related issue that the industry faces in 2019: visibility. With more legalization comes more public interaction. To improve the visibility and credibility of the industry, cannabis businesses need to demonstrate discipline, good business practices and compliance, even as it continues to be hampered by some stigma and restrictions.

Person holding a cannabis cigarette and cannabis bud.

Cannabis companies need an ERP solution that meets specific, unique industry needs, such as responding to consumer demands for new edibles.

Safety. With more usage both medically and recreationally, cannabis companies increasingly will be held to the same safety standards as other consumables. That means expectations of product safety and transparency. Your ERP solution needs to deliver transparency throughout the supply chain to allow you not only to run your business better, but also to meet consumer and regulator expectations.

A distribution management software component of your industry-specific ERP helps manage the sourcing, growing and selling of your products. This seed-to-sale approach provides you will important data and fast response if there is a need for tracking or tracing products prior to or after sale.

New Products. The legalization throughout Canada and to more than half the adult population in the U.S. means more customers and evolving tastes, interests and expectations. Product development will need to respond to shifting consumer demands. An ERP solution that tracks strains, products, sales and customer demographics helps cannabis companies anticipate and respond to changing demands, get products to market faster and use data to drive decisions related to product and price.

Investment Growth. The extraordinary growth of the cannabis industry makes it an attractive space for investors. There is likely to be more M&A and consolidation beginning in 2019 as larger corporations look to grow. Having the right technologies in place leads to better profit margins, operational efficiencies and compliance that makes your cannabis company more attractive to investors and buyers.

NexTec helps cannabis companies find the right ERP solution for their pressing needs. NexTec offers the CannaBusiness ERP, designed specifically for the cannabis industry and addresses all potential 2019 pain points. Learn more about technology that runs your CannaBusiness. and how NexTec can drive success for you this year.

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About NexTec Group

NexTec Group is a national consulting firm, specializing in technology to help you manage your business. This includes Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), and Business Intelligence (BI), Cloud and On-premise solutions for mid-sized businesses.

We started the company because, as consultants, we saw software sellers that had never walked a mile in the customers shoes. We had, and knew that we could offer something different. A company made up of consultants that had experience working in the industries that they were now advising.

In the 20+ years that NexTec has been in business, we’ve developed close working relationships with our customers, partners and each other.

Customers choose NexTec because…

  • Our consultants have an average of 25 years’ experience in both consulting and industry.
  • We understand the software, customer challenges, value teamwork, and are passionate about doing great work
  • We provide clear information that helps customers make informed buying decisions
  • We stand by our customers to make sure the technology works, is used, and produces great results
  • We deliver our services with a sense of friendliness, fun, individual pride, and company spirit

If you see the possibilities, let’s meet for lunch, coffee or a drink.

ERP solution

IAS 41 and Canadian cannabis growers: How the right ERP helps

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ERP solution

Canadian accounting guidelines are creating confusion for cannabis companies and investors.

Canadian cannabis producers are facing some confusion about how to comply with accounting standards that govern growers and sellers.

The confusion is with the International Accounting Standards paragraph 31 (IAS 41).  Here is a closer look at IAS 41 and how it affects cannabis growers.

IAS 41 Explained

IAS 41 provides guidelines to account for the transformation of biological entities (living animals and plants) into agricultural products, for example the extraction of oil from cannabis plants.

The guidelines state that those “biological assets” are counted at the end of each reporting period as fair market value less costs to sell (FVLCS).

If the fair market value changes, the changes should not be reflected in revenue. Instead they should be reflected as a reduction in the cost of sales. The result is an increase in the reported bottom line for the company, especially for a public company filing quarterly statements.

Another impact is the company can report net income in quarters when cannabis was grown and harvested, but sales were low.

While the guidelines are clear about how to account for those entities and the associated costs, the answer gets murkier when the company needs to factor in the costs of transforming those biological assets into harvested items. The International Accounting Standards Board (IASB) has not explicitly indicated how to account for those costs, arguing that such costs are related to the fair value measurement approach.

The vagueness means cannabis companies can take several approaches:

  • The costs can be expensed, so they are not reflected in the FVLCS methodology.
  • The costs should be capitalized to the carrying value of the biological asset, which would reduce the amount reported as change in FVLCS in subsequent reporting periods.

Some argue this represents a more accurate reflection of natural plant growth and changes related to external conditions. Many accounting firms are arguing that the lack of clarity means companies can use whichever method makes sense to them.

Other challenges exist for planning future costs of:

  • Expected costs to grow plants to the harvesting point
  • Harvesting and selling costs
  • Sales prices and expected yields

A new company that may have a period of growing and harvesting before it starts to sell will have one more consideration. If prices drop, the company will need to record inventory at a later date.

Companies need clarity on accounting guidelines related to cannabis cultivation and harvesting costs.

How an ERP solution helps solve IAS 41 reporting

The complexities of accounting are one reason an ERP solution is a smart choice.

  • Dimensional accounting
  • Extensive landed cost functionality
  • Material lot costs analysis
  • Labor tracking by work center
  • Overhead cost application

The cost accounting software tools, robust reporting capabilities, and business intelligence tools in a Cannabis-Industry ERP allow for real-time insights on biological assets, inventory yields, and forecasting. With access to information when it’s needed, your leadership can make informed decisions about costing, pricing, future plant growth, saleable products, and how to report for IAS 41.

A Cannabis-Industry ERP solution will identify and track cost and yield at each phase of the grow cycle. This level of real-time viability into your business will allow for fast reaction time and operational efficiency improvements, keeping savvy growers ahead of the competition.

NexTec can help your cannabis company select and implement the right ERP system and comply with IAS 41 regulations. Learn more and schedule a demo with NexTec today.



ERP choice affects batch and lot control in the cannabis industry

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CBD molecule.

Cannabis companies can use enterprise resource planning (ERP) tools that provide better lot and batch controls.

Cannabis companies need accurate and effective lot and batch control features to help drive profits, maintain regulatory compliance and ensure that inventory management is effective.

The need for these controls and sound inventory management functions means companies need sophisticated enterprise resource planning (ERP) tools that help to integrate and automate functions from across the enterprise.

Making the right ERP choice affects batch and lot control in the cannabis industry significantly. With the right ERP solution in place cannabis companies can reap all the benefits of batch, lot and inventory controls.

As seen in the recent post, How emerging cannabis businesses benefit from the right ERP, many companies are opting to use tools that are designed specifically for the cannabis industry, instead of generic ERP solutions that do not have the features and capabilities necessary. Without these features, companies will end up paying more to customize off-the-shelf products.

Store front for a head shop.

With more areas legalizing use of cannabis for recreational and medicinal use, companies need tools that will provide better analytics and scale as business grows.

Why are lot and batch control more important in the cannabis industry? There are several main reasons:

  • Careful cultivation. Marijuana growth is a carefully managed, resource intensive exercise. Plants need the right combination of light, water, fertilizers and pesticides applied at carefully measured intervals and in specific amounts. From germination to harvest, measuring the accuracy of production is critical to gauge return on investment and set price. Companies need to have tools that measure, alert and analyze data on crops throughout the growing and harvesting process. Those data need to be tracked closely in lots and batches to ensure that quality is maintained, too.
  • Regulation. Federal, state and local mandates are ever-evolving, but one of the most consistent features is the need for accurate, reportable and automated reporting on the status of lots and batches. These management capabilities need to measure the amounts produced or received, quantities sold and to whom (including shipments per customer), and the amounts of product contained in inventory, potentially across multiple locations.
  • Scalability. Many cannabis companies are just starting, as more states and provinces legalize recreational and medicinal use of cannabis products. The industry is poised for dramatic growth. With sound lot and batch controls in place, companies can scale up their operations quickly to meet growing demand or expansion.
  • Customer service. With automated tools in place, companies can provide better service. Accurate batch and lot controls allow for faster access to products, reduced fulfillment times and consolidation of inventory and warehouse processes. If there are issues, integrated and shared data allows for better response to customer problems.
  • Predictive analytics. With better warehouse and inventory tracking, companies can analyze the popularity of products and strains, shift production schedules, and determine optimal pricing structures. Gain better insights throughout the supply chain to optimize production.

Having good inventory control and strong batch and lot control don’t matter much without the right ERP system orchestrating everything. NexTec offers a range of the most outstanding ERP options and has experience supplying cannabis businesses with ERP solutions that make sense for their unique needs.

Contact us to learn more about how NexTec can help your cannabis business with the right ERP solution designed for the industry.