Cannabis Seed to Sale Software vs. ERP
Did You Know: Seed to sale software systems fail to provide critical ERP features while ERP for cannabis can also provide compliance tracking?
As cannabis evolves into a more heavily regulated space, companies are increasingly turning toward so-called “seed-to-sale” solutions to maintain compliance and mitigate risk.
Seed-to-sale software keeps detailed records on your crop – from when you plant the seeds, until they grow into mature plants, and from there, morph into gummies and vape pens ready to be marketed, sold, and consumed – but it doesn’t necessarily cover the entire business.
And while you might assume that compliance and traceability are enough, the fact is, unless your tech stack covers the end-to-end business, seed-to-sale solutions will only get you so far.
The point is, cannabis companies are just like every other company in that they need a comprehensive ERP solution to avoid risks, rise to new challenges, and capitalize on emerging opportunities.
In these next few sections, we’ll clear up any confusion surrounding the term “seed-to-sale software” and make the case for a cannabis-centric ERP system instead.
What is Cannabis Seed-to-Sale Software
So, again, seed-to-sale software is designed to help cannabis businesses track, manage, and regulate their inventory from the time its planted, through the harvest, all the way up to the point when the final product is packaged and sold to the customer (can be wholesale or retail, depending on your business model).
Seed-to-sale software aims to help cannabis businesses to help state and local governments and agencies collect taxes, verify product safety and quality standards, and enforce regulations.
The focus is on transparency traceability – essentially establishing provenance for every ounce of cannabis you grow. To do this, modern seed-to-sale platforms typically leverage barcodes and labels, IoT technologies like RFID sensors, and biometric scanning.
Seed-to-Sale Software vs. ERP
(a few data points about “hyperconnectivity, consolidation – and where ERP fits into all of this)
First of all, it’s worth mentioning that seed-to-sale software is more diverse than you might think. Some tools focus exclusively on tracking the lifecycle of cannabis products – Other platforms include a POS component or incorporate more supply chain components.
But what they all have in common is a central focus on the product – not everything else that can make or break a business.
By contrast, an ERP centralizes and unifies the entire business.
Beyond simply tracking products through its lifecycle—like Seed-to-Sale systems typically do—ERP solutions like Dynamics 365 Business Central drive efficiency by optimizing and automating back-end operations.
Users can customize everything from user roles and workflows to reports and automations.
They can set up custom rules to enforce compliance and control with both regulatory requirements and company needs – whether it’s about protecting customer data or making sure your sales reps don’t send ad-hoc collateral to a big wholesale account.
That means, sales orders are automatically sent to the finance department for approval. Fulfillment teams receive real-time alerts when it’s time to fill an order. Finance can close the books faster simply by virtue of having access to the same information as the sales team, the warehouse, and the retail operation.
And, instead of relying on multiple systems and spreadsheets that need to be merged manually each time you need to run a report, you can pull up the insights you need in a matter of clicks.
The point is, an ERP handles all of the critical processes seed-to-sale platforms were designed to address – but also everything else.
Where Cannabis Seed-to-Sale Software Comes Short
While this isn’t a comprehensive list, here’s a look at three key areas traditional seed-to-sale platforms don’t fully address:
1. Compliance
Ultimately, seed-to-sale platforms are designed to be compliance systems.
The goal is to provide total transparency into all aspects of the product. That means, you’re not just tracking the raw materials themselves, but also any waste, extracted materials, location information, sales data, etc. – to comply with state laws and federal laws.
The problem is, by focusing exclusively on compliance, rather than the business as a whole, you’re missing the many other elements that go into running a profitable operation.
See, while legalization has resulted in heavy regulations and compliance requirements, it has also meant that cannabis operations have expanded into a wide range of industry segments. For example, growers might branch into retail – making and selling their own brands and products. In that case, compliance requirements bleed into areas like package design, marketing, and sales.
The point is, companies serious about long-term growth and profitability can no longer focus on meeting the bare minimum requirements.
To maintain internal control, compliance, and overall operational efficiencies, companies must look toward a single ERP solution. Otherwise, they’ll fall to companies with more mature digital strategies.
2. Accounting
Most seed-to-sale solutions lack the accounting functionality that every business needs.
So, what ends up happening is, many cannabis businesses invest in both a seed-to-sale platform and entry-level accounting software like QuickBooks.
The narrow focus of seed-to-sale systems and entry-level accounting software forces cannabis companies to track parts of their business in silos — either using spreadsheets or a patchwork of single-purpose apps. That, in turn, limits their ability to innovate, adapt, or even make basic business decisions.
Ultimately, supplementing seed-to-sale systems with third-party accounting software leads to the same problem we talked about in the compliance section – an inability to leverage data from one business unit in another.
3. Operations
Again, seed-to-sale software does address compliance issues related to product tracing and transparency. However, it falls short when it comes to driving and sustaining operational improvements.
A big part of the problem is, seed-to-sale systems lack the ability to track inventory costs related to both raw materials and finished goods. Without allocated costs, companies can’t effectively make decisions based on actual product performance and market share. For example, it can’t tell you which products yield the highest profit margins. Nor can it provide detailed tracking info for production costs, inventory levels, or overhead expenses – all of which makes it difficult to maintain steady cash flow, create budgets, and expand your business.
Final Thoughts
Cannabis seed-to-sale software addresses a critical need. The problem is, it’s a solution that exists in a vacuum. In which case, it doesn’t matter how good the features are or whether there’s an IoT component in the mix – you’re still working with a fragmented solution. That, in turn, prevents you from unlocking the value of your data and making high-impact decisions that enable growth.
The point is, you don’t need seed-to-sale software just because you’re in the cannabis biz.
While the industry does face some unique challenges, in many ways, it’s a lot like any industry where manufacturers are required to track and trace raw materials, lots, and finished goods as they make their way through the supply chain.
Rather than focusing on one critical area, D365 Business Central gives cannabis companies an end-to-end solution for managing their entire business.
Velosio experts can help cannabis companies adapt D365 around their unique needs and regulatory challenges. We offer individualized solutions for everything from regulatory compliance and financial reporting to supply chain management, sales, and marketing.
Contact us today to learn more.