The medical marijuana market is undergoing a rapid expansion, bringing with it more growers, more customers — and more headaches.
In fact, the business has become so complex that many farmers are installing specialized ERP software platforms to manage their interrelated growing, storage, transportation and legal requirements.
In 2018, the value of the global medical cannabis industry was estimated at about $13.4 billion — and most recently forecast to hit $148 billion by 2026. The massive growth is requiring the industry to overhaul many operations created when it was a mom-and-pop operation, among them new supply and distribution chains and tightening regulatory environments.
Farmers entering the industry are learning quickly that the business of growing and marketing medical marijuana is more demanding than raising conventional crops. Many growers thus are turning to specialized Enterprise Resource Planning systems to help them collect and analyze data and manage their business operations.
Looking outside the box
While some farmers have turned to ERP platforms built for the agriculture sector, others have looked outside of their industry and found that data platforms originally designed for pharmaceutical firms are a better fit.
One reason is that cannabis and cannabidiol,Opens a new window  a healing ingredient from marijuana plants that doesn’t produce a “high,†are regulated much like other pharmaceuticals and distributed through similar sales channels.
Priority SoftwareOpens a new window , for example, has entered the cannabis market with an ERP application. Priority was working with several pharmaceutical clients, and its entry into the medical marijuana arena now looks like a prescient move. Much of the fundamental architecture underlying the company’s software had been tried and tested with pharmaceutical firms.
The cannabis-growing process is tightly regulated and requires specific seed-to-sale reporting as well as detailed records and accounts. Growers need to maintain a meticulously-updated list of materials with the other day-to-day data for ERP systems, such as warehouse management and delivery scheduling.
Cannabis growers exploring the ERP market will find many helpful features in pharmaceutical ERP systems but they have unique needs as well. Some ERP developers have been consulting with growers and other industry specialists to develop products to match the industry’s specific requirements.
What to check out?
Various companies involved in the cannabis supply chain can benefit from the features inherent in the new generation of ERP platforms serving this market, including improved data collection and better management of margins.
Basic tools that you should see in a suitable platform include cultivation and processing management, manufacturing and reporting, points of sale, B2B wholesale and e-commerce oversight.
Platforms should also be able to integrate with regulatory and compliance providers to ensure all operations meet the right criteria.
Cannabis firms are also growing up themselves as demand for cannabis-based treatments grows, driven by a need to treat an aging population and neurological disorders that can accompany aging. Marijuana growers are discovering that what started out as relatively small businesses have outgrown their human resource and accounting needs.
This is the time when a successful grower should be looking for an integrated ERP package to support further expansion within this sector.
Key takeaways:
- Rapid growth, and projected growth, in the medicinal cannabis and CBD market means that there are already dozens of maturing cannabis businesses at various points in the North American supply chain.
- Requirements for ERPs are being met from a range of directions but pharmaceutical ERP specialists are especially well-positioned to meet market demand.
- Pharma ERP has been designed to help distributors in the same market as medicinal cannabis and to function within a tightly-controlled regulatory environment.
- Pharma ERP developers are also awake to the fact that they need to configure their software offering to include modules unique to the rapidly expanding cannabis market.