Black Market Problems and White Label Solutions
Supply chain solutions are vital to the success of small growers and producers as well as down-stream enterprises in the modern U.S. cannabis industry. Similar to farmers of any major cash crops, cannabis growers and producers need to maximize yield at the lowest cost. Accordingly, more production operations are looking to the tools and processes originally developed in the precision agriculture technologies space. The sophistication of such adopted solutions just might mean the difference between short-term and sustainable market success.
The total U.S. cannabis market was estimated between $50 and $60 billion in 2014, depending on the market analysis, and the consensus is clear that there is significant and growing demand among consumers of legal medical and recreational products. This demand is expected to increase rapidly as more lenient regulations are adopted by U.S. states and decriminalization is increased at the federal level. But increased demand means increased need by growers and producers to identify and address legacy inefficiencies that were largely associated with operating in a historically underground market.
Today, facing stricter market requirements given constrained supply, while also complying with a complicated and dynamic regulatory environment, means keen attention must be given to innovative and enabling technologies. In cannabis cultivation, such technologies include everything from precision equipment to software that optimizes operations and facilitates new retail business models.
Specifically, sophisticated technology solution providers can address the following:
- Scalability – Customized tools, software and processes can be utilized to optimize resource efficiency.
- Precision – Engineering technologies address growing need to increase profitable yields and grow supply capacity through modern farm equipment and processing.
- Research and analytics – The need to develop safer and cleaner seeds and create clinical require methods for evaluating products and production.
- Information Security – Solution providers need to commit to understand and address security concerns of clients, notably hesitation about cloud technologies.
As technology solutions facilitate market transitions, they also help to spur cannabis yield and balance out the current supply/demand scenario. The multi-billion U.S. market for precision agriculture technologies, for all cash crops, includes advanced crop cultivation and micro irrigation systems, production guidance/logistic systems, yield monitors, system integration services, and other emerging technologies aimed at helping producers optimize cannabis production and processes.
These technologies, when leveraged, provide leading-edge solutions for cannabis producers and manufacturers. Software solution providers, such as BioTrackTHC, are being employed to monitor regulatory compliance and assist clients in adherence at the state level as well as operationally. There are also niche technology solutions offering specific financial or operational assistance.
Because technology solutions are required in myriad scenarios, many companies stand to benefit from strategic partnerships and comprehensive offerings from solution providers. TRiQ Systems is a company offering solutions that assist growers and producers at the ground level, with products and services including business management software, supply chain consulting, tissue culturing, facility design, R&D and general training. TRiQ places emphasis on partnerships, with companies like CannTrol and Apeks Supercritical, and vets customers, which is an especially important component to success in this burgeoning and changing market.
Matt Cohen, CEO at TRiQ, believes the future of the industry will be much larger than that of alcohol due to the variety of uses for cannabis. Growers and producers are looking to meet demands in a constantly changing landscape; one that Cohen believes will soon shift from +90% indoor operations to more mechanized greenhouse growing facilities that ensure more consistent and higher quality cannabis supply. With demands on varied resources for a variety of products, each with specified regulations and requirements, there will also come more product-level challenges and requirements.
“We never stop interfacing with companies,” Cohen said, emphasizing that, “if this means flying out to our customers and getting on the ground to problem-solve, that is what we will do.” Focusing on technology enablement solutions is a smart move. Focusing on fostering long-term partnerships, however, will be crucial as larger software companies enter the market, pushing and shoving.
Cannabis growers and producers are realizing technology support solutions are non-negotiable. And as the industry evolves, technology-based solutions will quickly follow suit, so those companies that want to survive will need to think a step ahead. Teasing out a way to successfully manage supply chain volatility introduced by a complex regulatory environment and other external risks remain primary concerns.
Herein, comprehensive solutions are key, and those companies offering software and efficiency guidance will prove all the more valuable to enable businesses to both define goals and achieve top performance, while also establishing the groundwork for sustainable, long-term success.