Several start-ups have joined forces to provide enterprise resource planning (ERP) solutions to help cannabis farmers run their specialized operations and navigate the regulatory challenges of the market.
Leaf Logix, a New York-based software vendor to marijuana growers, provides specialized software that covers operational needs for cannabis businesses. Its functions include points of sale, business-to-business wholesale distributions, e-commerce, cultivation and tools for processing, manufacturing and reporting.
Cannabis Creative Group, a digital marketing company in the Boston area, will offer Leaf Logix’s ERP functionality to its marijuana retailers, growers and cultivators for point-of-sale transactions, cultivation, inventory management and distribution.
At the same time, Leaf Logix will refer its ERP clients to Cannabis Creative for Web design, digital marketing, search engine optimization and marketing, lead generation and other marketing activities.
Cross-Selling Opportunities
Both companies have chosen to specialize in the marijuana sector and exploit the cross-selling opportunities that exist between them.
“This partnership will allow us to go beyond the traditional agency model by offering our clients holistic solutions that meet with their digital marketing and business needs,†says Josefine Nowitz, co-founder of Cannabis Creative.
Leaf Logix developed its seed-to-sale ERP software to integrate with all regulatory and compliance providers, allowing its clients to grow intelligence and compliant operations.
It maintains a service footprint in three continents and the United States as well as the District of Columbia and Puerto Rico. It supports the all operational needs for cannabis companies.
“It’s in the customer’s best interest for there to be a synergy between the companies that help them grow their business and the companies that help them operate,†says Scott Hinerfeld, a LeafLogix vice president.
$10.5 Billion Spent on Cannabis
In 2018, total cannabis spending at U.S. dispensaries including medical and retail purchases reached $10.5 billion, according to research firm BDS AnalyticsOpens a new window .
That’s estimated to rise to $12 billion by year’s end. In 2019, the direct industry is said to be responsible for the employment of 121,000 full-time workers in the United States.
Illinois became the 11th state to legalize recreational marijuana in June. Utah and Missouri voted to legalize medical marijuana this year, and Oklahoma voted to legalize it last year.
Altogether, medical cannabis is legal in 33 states.
Key Takeaways
- The marijuana sector needs specialized ERP solutions that can support the proliferation of new businesses active in the sector, not just growers but also those ventures active in processing and distributing the drug.
- The market is growing as more states approve the sale and distribution of cannabis for medical and recreational purposes.
- Companies that operate in this sector have specific needs and must comply with a high volume of regulatory reporting. This element of compliance makes them similar in many respects to pharmaceutical businesses, but at the same time they also exhibit some of the qualities of farming enterprises.