By Seed And Beyond | Blogs |
Vertical integration is a commonly used business-related term across a wide variety of industries. In this blog, we are going to discuss what vertical integration means for the cannabis industry. When a business is vertically integrated, it means that the business owns all stages of their supply chain (from cultivation to retail) – the business will grow their own cannabis, extract and process it, manufacture products and also sell through their own retail stores. Vertical integration in the cannabis space ensures that the end-to-end business operation runs like a well-oiled machine. One important aspect of vertically integrated businesses is the single point of control of every aspect of the business thereby enabling customers to receive higher quality and fresher products at lower costs.
There are different stages in a Cannabis industry supply chain. The process starts at the cultivation facility, where the plant grows from seed to harvest. Once ready for harvest, it is cut so that the plants are prepared for the lab extraction facilities and quality control. At the extraction facility, the cannabis plant goes through the process of extraction to remove the cannabinoids for edible or concentrate production. If the plant remains in its flower form, it travels to the manufacturing facility where packagers accurately weigh out and label the cannabis. Once labeled in compliance with local state laws, the final product is ready for the retail (or pharma) shelves. In a vertically integrated business, the company owns all sectors of this process.
There are a set of rules and regulations mandated in each state for vertical integration of a Cannabis business. Not all states allow vertical integrated Cannabis businesses. Some states mandate businesses to have vertically integrated whereas the other states have a strict ban on vertical integration. One of the main reasons for states that mandate vertical integration is because it allows the state to oversee all the operations in an efficient and smooth manner and have control over the entire supply chain process. Additionally, it also helps the retail facilities from purchasing black market products, as the businesses are required to produce, manufacture and sell their own products. There are a few other states that have a ban on vertically integrated business.
There are also a few states that leave the choice up to the businesses for vertical integration. In these states, cannabis companies can weigh the following pros and cons of vertical integration to decide if the structure is right for their business goal.
Seed and Beyond Cannabis ERP software powered by SAP Business One has redefined the way Cannabis ERP software work. Seed and Beyond’s vertically integrated Cannabis ERP software solutions address almost every area of business: from cultivation, extraction/processing, manufacturing, distribution to retail and marketing, sales, and customer support to finance, accounting, human resources and project management. Businesses can monitor their end-to-end supply chain within a single platform. Seed and Beyond is powered with modules for every vertical in the Cannabis industry – from seed to sale.
Track every individual plant through the different stages of cultivation and harvest, and maximize overall yield with our robust cultivation module. Optimize future yields and efficiencies and increase your profitability with ease.
Manage end-to-end manufacturing processes and optimize resources with our manufacturing modules. Gain insights and streamline workflows at each stage of manufacturing from extraction and refinement to the end product.
Manage inbound and outbound shipments, inventory levels, vendors, facilities and wholesale partners within a single interface. Track shipping and deliveries, and efficiently streamline the distribution of high quality Cannabis to consumers.
Monitor and manage your entire retail operations with Seed and Beyond’s Retail Module. Track real-time sales, control inventory, increase ROI, and simplify operations efficiently. Gain complete view of your customers and grow your Cannabis retail empire.
Manage logistic challenges by integrating data and business intelligence using the Seed and Beyond delivery module. Streamline orders, scheduling, payments, delivery and invoicing within a single platform. Track your fleet and optimize delivery of Cannabis to consumers.
Analyse data points, track key performance indicators and make intelligent and strategic decision with our extensive seed-to-sale Cannabis reporting and analytics platform. Connect to data and generate accurate reports across all different processes and share your reports in different formats and configurations.
Facilitate quality control testing and ensure that the products meet the required expectations. Track internal, customer and supplier quality activities and provide methodologies and efficient workflows for quality management.
Get an overall view of all your financial transactions with Seed and Beyond Finance Modules. Manage financial operations with other processes and improve your cash flow.
Manage your sales and customer lifecycle effectively. Understand customer needs better and meet their needs with Seed and Beyond’s CRM capabilities. Increase Cannabis sales, attract customers and improve sales operations with ease using our Sales and Customer Management modules.
Monitor, track and report every gram of Cannabis through your entire supply chain. Our system keeps track of changing regulatory needs and has modules to track and report necessary parameters adhering to cannabis regulations. Print Cannabis compliant labels customised to your business directly from the Seed and Beyond platform.
To know more about vertically integrated Cannabis business, get in touch with us.