5 Tips for Hitting the Moving Target that is Cannabis Compliance
Velosio has identified 5 of the most important foundational capabilities of the moving target that is cannabis compliance.
The cannabis industry may be the most highly-regulated industry in the country — especially since (or perhaps because) it’s not even recognized as a legal industry by the federal government. Recreational cannabis is now legal in 20 states, and medical marijuana in 36 states. Within each of those states, though, cannabis compliance regulations vary significantly. Yet, despite the patchwork of rules and regulations, the pioneering spirit of cannabis operators remains strong, and the industry continues its steep growth trajectory.
Ensuring Cannabis Compliance
What does it take to ensure continuing compliance in the moving target that is cannabis compliance? In Velosio’s experience working with cannabis companies, we’ve identified five of the most important foundational capabilities.
1. Auditable financials
Like many startups, young cannabis companies often start small and select an entry-level accounting application like QuickBooks. While QuickBooks can handle the basics, it lacks functionality that is critical to growing cannabis companies — like robust inventory management capabilities, quality management structures, and auditable financials.
At the core of obtaining and retaining compliance are robust internal systems to accurately capture, maintain, and report upon financials and operational data.
2. Deep integration capabilities
Metrc (Marijuana Enforcement Tracking Reporting & Compliance) compliant software is a cloud-based cannabis compliance management solution used by several states, including Colorado, California, Oregon, and Massachusetts, to track and trace cannabis movements from seed-to-sale. Cannabis operators doing business in any of the states that use Metrc are required to enter or regularly upload specific information to the application.
Metrc continues to improve its APIs that facilitate automated data transfers into the application. Still, as compliance and reporting requirements change, cannabis operators should consider the integration capabilities of their cannabis ERP applications. Without integration, operators are left to manually perform all data entry into Metrc, a time-consuming and potentially error-prone task.
3. Flexible workflows and operational controls
When you’re trying to hit a moving target like cannabis compliance, flexible and agile business applications are crucial. Entry level applications are notoriously inflexible and standard ERP applications weren’t designed with the cannabis industry’s volatility in mind. As a result, growing cannabis operators often find themselves running the business with several disconnected applications and dozens of spreadsheets.
Velosio encourages its cannabis customers to think big, right from the start. Look for a cannabis ERP application that offers extensive configuration capabilities. One that allows you to define, track, and adjust workflows to ensure consistency while adapting to change. An application that supports the ability to report on and analyze your data from multiple angles. And one that provides configurable controls and workflows to catch data anomalies and potential errors.
4. Quality management program
Cannabis testing requirements also vary by state — with most states mandating some form of testing for contaminants. Currently, only a handful of states require testing for potency, but this is likely to change. Even the FDA itself is shifting focus away from pure compliance to “controlling production errors and increasing speed of detection for quality issues.”
Testing products remains essential, but companies are also expected to maintain a broad commitment to quality that includes rapid error and variation identification. Conscientious and brand-savvy cannabis producers embrace quality standards and build quality management programs into their operations from the start.
5. Product traceability as part of the big picture
Seed-to-sale traceability is job one for every cannabis operator. However, seed-to-sale software applications are not the best way to achieve that traceability. While seed-to-sale software addresses compliance issues of product tracking common in the cannabis industry, it falls short in its ability to drive operational excellence throughout the rest of a company’s operations.
So, while traceability is critical, it should be combined with capabilities supporting the larger context of the cannabis business. Cannabis ERP applications combine the necessary product tracking with inventory costing and availability data, MRP, machine scheduling, quality testing data, replenishment, procurement capabilities, sales forecasting, and financial reporting into a single cohesive cannabis business management application.
The Case for Cannabis ERP Solutions
Budding cannabis operations enter the industry with plenty of skill, passion, innovation, and drive. Cannabis ERP complements those assets, providing the tools, structure, and compliance framework that allows operators to flourish in one of the most challenging, rewarding — and regulated — industries around.
Silver Leaf ERP is a cannabis ERP solution specifically designed to stay abreast with cannabis compliance and give its users that big picture focus through its integration and functionality capabilities. To learn more about the solution, and how Velosio’s partnership promise helps your cannabis company flourish, contact us today.