Cannabis Companies: How to Tackle Complex Compliance Challenges with Digital Transformation

The cannabis industry has exploded over the past few years and shows no signs of slowing down. CNET reports that “as of April 2022, 37 states have legalized the medical use of cannabis” and “18 states have legalized the adult use of marijuana for recreational purposes (and medical uses, as well).”

As the list of states legalizing cannabis continues to grow, so, too, are sales. The same CNET article reported U.S. sales of legal recreational cannabis at nearly $15 billion last year and is on target to reach $25 billion by 2025. These figures don’t even take medical cannabis sales into account. Market data firm Statistia reports that “The number of cannabis consumers is likewise expected to grow in the US: by 2025, the country is projected to have close to 50 million consumers.”

Along with growing product demand, consumers and sales comes increased scrutiny from regulators. And this makes a whole lot of sense—it would be unfathomable to put an untested and unregulated product of any kind into the hands of even one consumer, let alone 50 million.

Thus, the cannabis industry is now heavily regulated with complex—and constantly changing—compliance requirements. Cannabis companies must follow federal mandates issued by the U.S. Food and Drug Administration (FDA), along with state-issued regulations.

While this is much appreciated from a consumer perspective, from a business standpoint, successfully complying with myriad federal and state regulations can be tricky. And, compliance isn’t something to be taken lightly. Rather, it’s essential to protect operating licenses and company reputation and to avoid non-compliance business repercussions, including losing licenses, customers and millions of dollars in fines.

Digital Transformation in the Cannabis Industry

So, how can cannabis companies capitalize on new market opportunities and grow while maintaining compliance? The answer lies in replacing traditional point solutions and manual processes with a modern data-driven technology and enterprise solutions that can help reduce risk, lower costs, streamline operations and stay ahead of changing regulations.

Often, cannabis companies don’t know all the data they have to work with because they’re dealing with highly manual processes and systems that operate independently rather than as part of an integrated ecosystem.

By modernizing and bringing it together—and understanding the best ways to access, store, analyze and report on that data with best-fit technologies—cannabis companies can drive decision-making, gain unprecedented insight into their operations and accelerate growth while ensuring compliance with state-specific reporting requirements

For example, Trulieve worked with Navisite to implement SAP’s enterprise resource planning (ERP) solution, S/4HANA, gaining a modern, agile platform for managing its business. Navisite also helped Trulieve implement cannabis-specific solutions, including a cultivation application that tracks the growing, moving, harvesting and other key characteristics of the cannabis cultivation process. Today, Trulieve is driving business efficiencies and meeting specific compliance reporting requirements for each state in which it operates.

A few benefits of modernizing cannabis operations with technology include: 

• Seamless integration with regulatory authorities to ensure accurate, timely reporting
• Elimination of highly manual, error-prone processes
• Total visibility from seed to sale to support decision-making and forecasting
• Comprehensive security strategy and solutions to reduce the risk of cyberattacks
• Ability to leverage and integrate intelligent technologies like blockchain, artificial intelligence (AI), internet of things (IoT) and more

When cannabis companies are operating from a single source of truth, they’re able to track every aspect of the product’s journey and make more informed decisions. This not only keeps them in compliance—but also provides a more consistent, high quality customer experience that empowers them to differentiate their businesses.

Partnering for Technology Expertise

The takeaway here is that digital transformation can help cannabis businesses mitigate the compliance risks associated with operating in a heavily regulated industry while providing new levels of automation, visibility, agility and trust. But how do you know which enterprise solutions and technologies are right for your business? That’s where Navisite can help.

Navisite helps cannabis companies compete and grow with business advisory and end-to-end digital transformation solutions. We collaborate with stakeholders across the organization—senior business, operational and IT leaders—to identify opportunities and accelerate growth with tailored, vertically-integrated solutions that span the entire seed-to-sale process.

To learn more, read about Navisite’s Cannabis Services.