CBD and Cannabis: Why manufacturers need an ERP growth solution

The impact of the COVID-19 pandemic has been harder on small businesses than larger enterprises – except for the cannabis industry. Most cannabis cultivators have seen a large surge in demand and double or triple-digit organic growth. 

The US cannabis industry has grown more than 200% since hemp was federally legalized as part of the 2018 Farm Bill and is currently an $8 B industry. But the industry is not without its challenges; cannabis and hemp manufacturing and distribution are a little like the wild west – it’s an emerging industry with massive demand – alongside increasing regulatory scrutiny, and supply chain disruption challenges. 

COVID disrupted supply chains and made it difficult for manufacturers to obtain grow lights, fertilizers, agricultural supplies, and containers. In addition to supply chain challenges, cultivators faced increased transportation costs and logistics workarounds. 

Most businesses plan for resource and process hiccups, but they may not fully recognize business model continuity challenges and roadblocks – like the pandemic. 

Why your cannabis business needs a modern ERP

The cannabis industry operates much like food and beverage manufacturing. There are traceability, expiration date and batch tracing obligations, regulatory compliance monitoring, grow performance optimization tracking, raw materials, and finished goods management, income and expense, financial and KPI reports – in short, all of the functionality that xTuple’s robust ERP solution delivers. 

Project management is more effective when all stakeholders have easy access to real-time data, information, and processes to streamline and enhance product performance – this is nearly impossible if you’re running on spreadsheets and using emails as your main method of communications. 

The Core

The core of manufacturing capability is MRP (materials requirement planning). That’s where costing and resource planning occurs – that’s where xTuple delivers the crucial visibility you need to streamline purchasing and production and maximize your time and money. 

Our customers say that xTuple ERP Software helps them:

  • Avoid recalls and build brand equity 
  • Track – nursery (know where your plants are), track and schedule harvest, track distribution to dispensaries, distributors
  • Eliminate silos –  develop visibility from cultivation, harvest, transportation, processing, and production to dispensary, edibles, and packaged product
  • Inventory management from wholesaler to distribution centers
  • Achieve transparency in the supply chain process – access, record, sequence
  • Eliminate downtime. Many purchasing managers spending the day making calls and emailing their suppliers, they do not have logistics in place – so, manual processes eat time/money
  • Accurate hemp farming regulations and CBD manufacturing regulations (according to DISA, fully legal in 24 states – mixed in 27 – medicinal, decriminalized)
  • Accurate reporting for taxes VIA Intuit QuickBooks integration 
  • Accurate tracking for testing sites (less than .03% THC) via an integrated Quality system 


Why now

According to reliable reports, the cannabis market is changing rapidly. More than 70% of Americans support legalization and states are queuing up to host this booming industry. 

Sales are projected to exceed 50 billion by 2026. But manufacturers must be prepared with a strong business foundation to innovate and pivot to what’s next – edibles, oils, skincare, supplements, and an entrance into consumer-packaged goods (CPG) markets. 

The only way to achieve sustainable growth and profitability is digital transformation – the implementation of ERP. 

ERP delivers a digital supply chain record – a single source of truth – so information and data are organized, and siloed functions are eliminated, and end-to-end visibility for communications between teams. 

ERP provides cannabis manufacturers and distributors the power to leverage e-commerce and fulfillment solutions to serve increased demand. 

With most of the chaos under control, it’s time to come out of the gate strong and set growth strategies in place for 2021 - onboarding the right ERP can be both a short and long-term success solution for small businesses. 

Visit our website and check out our ROI calculator to see the difference xTuple ERP Solutions can make for your business. 

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