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Member Blog: Attracting Investors Requires Compliance And Scalability

by Frank Nisenbaum, Vice President of ERP Sales, c2b teknologies 

More new cannabis entrepreneurs are trying to carve out space in the industry, and as the market continues to expand, so are cannabis investors.

This comes as no surprise. Cannabis investors have more predictable ways to invest in cannabis companies since marijuana can now be found in everything from beverages to beauty creams.

But the needed operating capital coming from these investors isn’t being thrown at new upstarts riding on nothing more than the dream of success in the legal marijuana marketplace. Cannabis investors want to see the people and businesses into which they put capital have a strong commitment to their industry and a dedication to their processes. Of course, this entails strict adherence to local, state and federal regulations for compliance initiatives, but investors also want to see a solid foundation for expansion and scalability in place.

Scalability

Consider your projected growth over the next few years, what are you doing to meet it? Investors want to see more than forward-thinking ideas, they want to see the initiatives you’ve put in motion to meet your projections. Are you upgrading suppliers, creating new products, or even better, adding new locations?

Investors need to believe that organizational leadership has a sound plan for scalability in place. More importantly, as you expand into new markets and grow your product offerings, you have invested in the framework and infrastructure in order to grow their operation in line with your business plan.

Regulation and Compliance

Among the more burdensome compliance issues for cannabis operators is the need to track the entire lifecycle of cannabis products from seed to sale. You need to be able to account for every step in the lifecycle of your cannabis plants and be able to provide this information to regulatory agencies at a moment’s notice.

Adding to the complexity of tracking the plant, you’ll need tracking for each employee who works with the plant. These seemingly minor details can derail the best intentions, so demonstrating success surrounding mandated quality assurance testing at key points in the plants’ development will get the attention of would-be investors.

Multiple Jurisdictions for Added Complexity

Compliance is even harder to achieve due to the multiple bodies which have jurisdiction. Local, state, and federal agencies all jockey for partial control of regulatory measures placed upon your cannabusiness.

Some of the federal agencies involved in the regulation of legal cannabis plants include, but are not limited to:

  • United States Department of Justice
  • Environmental Protection Agency
  • Internal Revenue Service

Each state in the U.S. has its own regulatory body for cannabis operations. Examples include:

  • Department of Public Health
  • Department of Food and Agriculture
  • Department of Fish and Wildlife
  • Department of Pesticide Regulation
  • Alaska Marijuana Control Board
  • California Bureau of Cannabis Control
  • Colorado Department of Revenue Enforcement Division Marijuana Enforcement
  • Illinois Department of Financial and Professional Regulation, Cannabis Regulation
  • Maryland Medical Cannabis Commission
  • Massachusetts Cannabis Control Commission
  • Michigan Department of Licensing and Regulatory Affairs Bureau of Marijuana Regulation
  • Nevada Department of Taxation
  • Oregon Liquor Control Commission
  • Washington State Liquor and Cannabis Board

The full list of regulatory bodies is much longer. Compliance concerns are not exclusive to this industry, but as a cannabis operator, you face a tremendous number of regulatory bodies and each of these agencies has specific requirements to adhere to in order to stay compliant and stay in business.

As cannabis legalization becomes more widespread, each jurisdiction develops its own guidelines surrounding cannabis, from seed to sale. Unfortunately, this often creates confusion and leaves cannabis compliance open to interpretations. Without the systems in place to track and document multiple aspects of the cannabis industry, you’re at risk for considerable fines for non-compliance.

How to Present Your Cannabusiness

If you’re seeking capital from cannabis investors, understand that building a cannabusiness for compliance and scalability is nearly impossible without purpose-built technology. To that end, cannabis operations software is an invaluable platform for your cannabusiness when looking to attract investors.

Beyond your core business functions, investors consider the systems in place which support your cannabusiness. By planning ahead and incorporating a cannabis operations solution before you seek outside funding, you’re able to enjoy the fruits of efficiency, but you’re also able to prove it.

Cannabis operations software features tools for inventory tracking, asset management, and personnel scheduling and management, which means that the regulatory guidelines with which a cannabusiness must remain compliant are areas intrinsically handled by the platform. These systems excel at tracking inventory and allocating resources while maintaining clear audit trails, which is extremely important if a regulatory agency knocks on your door.

Cannabis operations software gives you and potential investors a unified view of your entire operation by bringing all operational data under the same umbrella, standardizing the data reporting and making it available for easy cross-referencing. By collecting all data into a single pipeline, a best-in-class solution gives everyone in the process the tools and insights necessary to make the right decision.

Vice President of ERP Sales, Frank Nisemboum, is a trusted advisor at c2b teknologies who has guided organizations of all sizes enabling them to establish a technology presence and expand their business through technology. His proven ability to analyze the current and future plans of a company and work with team members to subsequently bring technology solutions to the organization result in improved processes and controls that assure continued growth and profitability. 

Frank has worked in the ERP and CRM software selection, sales and consulting industry for almost 25 years. His strong ability to understand, interpret and match the needs of an organization to the right solution make him an asset to all of his clients. 

c2b teknologies integration and engineering experts have partnered with leading cannabis industry experts to develop a software solution that provides a complete cannabis operations system. The best-in-class solution not only handles tracking of seed-to-sale activities but encompasses your entire cannabis operations with compliance needs handles along the way. Our passion for solving problems drives us to deliver innovative solutions for everyone we work with. Visit c2btek.com for more information. 

Member Blog: Four Reasons ERP Helps Growing Cannabis Companies

by Frank Nisenboum, e2b teknologies

Owners, presidents, and CEOs understand that you have to spend money to make money but it’s often difficult to justify investing in Enterprise Resource Planning (ERP) software when you could spend that money on new equipment or other tangible assets. Implementing the right ERP software can dramatically improve every aspect of your business from employee retention to customer satisfaction with consider cost savings and increased profits. Further, ERP software can significantly increase the value of your business for owners and investors. ERP helps executive leaders to understand what’s happening throughout the business with alerts, dashboards, and tools to make strategic decisions when necessary.

With dispensary ERP, companies serving the legal marijuana supply chain finally have the tools they need to drive innovation and gain insights for expanding their operations. ERP software automates many cannabis accounting functions related to technology, services, and human resources, all while allowing cannabis businesses to organize and manage real-time data from various solutions into a single view.

It’s easy to see why businesses operating in the cannabis industry would have intricate inventory management needs, but there’s another business side to cannabis which many might not consider. The cannabis industry has complex accounting requirements that go hand-in-hand with their inventory and other business processes.

With cloud accounting software built specifically for cannabis companies, organizations within the cannabis supply chain finally have the advanced technologies to support their unique operational and accounting needs. Today’s growing cannabusinesses need to adapt in a rapidly changing environment and when they’re successful, it gets noticed. This often results in company leadership seeking investor funding or entertaining mergers and acquisitions talks. When companies operating in this space attempt to position themselves for growth, they need field-tested cloud accounting software to prove it.

In this rapidly changing industry, here are a few ways an effective, flexible, and secure cannabis ERP solution will allow you to adapt, positioning your cannabusiness for growth:  

Know Your Customers – Data and Predictive Analytics

Dispensary ERP solutions allow you to compile and understand data about your cannabusiness and the marijuana industry as a whole. With a better understanding of supply and demand pattern, dispensaries can make informed strategic decisions about products and operations.  

By capturing relevant data about your cannabis operation, you answer many efficiency and profitability questions. What are customers most interested in? Which products are they buying and in what quantities. How much are they spending? Are there patterns in accompanying purchases or complementing products? These insights and more help your cannabusiness to create customer personas allowing you to better service your clientele.

280E Tax Woes – Accounting

A fully integrated, purpose-built cannabis accounting software package which offers financial reporting, meets GAAP and auditing board compliance standards also needs to be robust enough to handle other complexities within the industry. Does your off-the-shelf solution ensure compliance with section 280E of the IRS guidelines which prohibits a cannabis operation from deducting certain business expenses? If you’re not sure, the answer is probably not.

With modern cannabis solutions available, your operation can fully organize financials by department across multiple locations as well. Dispensary ERP gives you all the financial reporting tools you need for journal postings, purchase orders, invoices and cash management by recording all transactional data in detail, by location.

Staying In Compliance

Regulation and managing regulatory compliance continues to be top priority for growing cannabis companies. As legislation changes, cannabis operators need varying levels of up-to-date reporting capabilities surrounding seed-to-sale traceability, product recall capability, and proper labeling among many other considerations.

Built to exceed compliance standards, your dispensary ERP delivers individual and aggregated reports, unalterable custody tracking with time stamps to provide the real-time data needed for compliance initiatives – as well as for auditors, CPAs and others who will need access to the books.

If you have multiple locations, you will need to monitor, track and record data from each of your locations, jurisdictions, or intra-industry verticals (growers, processors and dispensaries). With one centralized database and integrated reporting, individual factions of your business are no longer operating as silos and staff have access the real-time access to accurate data for regulators.

Growing Your Business – Scalability

Consider growth plans as you look for technology solutions. If your plans include multiple locations or jurisdictions, you will need cannabis-specific software to manage the complexities that arise as a result. If you decide to diversify your product line by vertically integrating other seed-to-sale products, you will need industry-specific solutions to address the inventory, accounting and compliance ramifications not offered by out-of-the-box technology.

Growing cannabusinesses need to work efficiently with suppliers and growers, accurately forecasting demand and staying abreast of current regulations. As a result, your growing company needs solutions which are flexible and customizable with built-in cannabis-specific features.

Like any other business, growing a successful cannabis business requires technology tools to readily handle its industry’s trends and business process complexities. A flexible, powerful and scalable dispensary ERP will help you address those challenges while you continue to expand your operations.

Vice President of ERP Sales, Frank Nisemboum, is a trusted advisor at e2b teknologies who has guided organizations of all sizes enabling them to establish a technology presence and expand their business through technology. His proven ability to analyze the current and future plans of a company and work with team members to subsequently bring technology solutions to the organization result in improved processes and controls that assure continued growth and profitability. Frank has worked in the ERP and CRM software selection, sales and consulting industry for almost 25 years. His strong ability to understand, interpret and match the needs of an organization to the right ERP and/or CRM solution make him an asset to all of his clients.

At e2b teknologies, our passion for solving problems drives us to deliver innovative solutions for everyone we work with. Visit e2btek.com for more information.

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