Five Challenges Facing Multi-State Operators that Can Be Overcome with an ERP

multi-state operators

Operating a cannabis company across multiple states is no easy feat. Because each state has its own rules around growing, packaging, testing, marketing and more, it’s extremely challenging for operators to plan business processes around constantly shifting regulations. 

Many cannabis companies across the US operate as multi-state operators (MSOs) and own products or dispensary brands that are available in multiple legal state markets. While MSOs attempt to standardize operations to increase efficiency and profitability, they may end up with a portfolio of individual brands operating in virtual silos from one another. That’s because cannabis rules across state lines can be so detailed, that standard operating procedures can’t effectively accommodate the nuances of state-specific regulations. MSOs, then, are left with the inability to standardize their practices, ingredients and methods, leading to organization-wide inefficiencies and a lack of visibility. 

In this blog, we look at the future of the cannabis industry in the US, how MSOs can plan for the potential federalization of cannabis laws and the role technology plays in preparing for future regulatory changes. We also look at the ways an Enterprise Resource Planning (ERP) solution built for the cannabis industry can help MSOs overcome five common operating challenges. 


A Good Foundation for Now and for the Future 

While word on Capitol Hill is that the Senate is expected to pass a bill federally legalizing marijuana in the next two years, it’ll likely be a while before all the wrinkles of federal legalization are ironed out. Questions around state-specific regulations vs. overarching federal ones will undoubtedly create grey areas in the overall legalization of cannabis and whether operators will have to adhere to state rules, federal rules or both. 

That is why it’s critical for MSOs to build their operations for the current industry climate but with the capabilities to pivot if and when something like federalization occurs. 

Here’s an example: in today’s landscape, MSOs will have facilities in various states with no ability to ship across state lines, creating a number of independently operating businesses. A solution like an industry-specific ERP solution can consolidate an MSO’s finances and data across all business units, creating one version of information for increased visibility and better decision making.  

If and when federalization of cannabis in the US occurs, MSOs with a comprehensive software solution will have an advantage because they put the building blocks in place to capitalize on expanding national opportunities. A solid business foundation allows MSOs to quickly expand as required, ensure flexibility as the industry changes and pivot operations with the help of inherent business practices created early on.  


Overcoming Five Common Multi-State Operator Challenges 

An ERP solution built for multi-state operators helps them overcome five common operating challenges now and in the future: 

  1. Compliance 

An ERP system like CannaBusiness ERP helps manage and support compliance efforts by integrating with various state regulatory systems. If a site is set up for regulatory reporting with BioTrack or Metrc, for example, an ERP can work in the background to capture transactions, process them and send them automatically to BioTrack or Metrc using an API.  

For cross-border transactions, MSOs need the ability to maintain audit trails and perform recalls, segregate duties during cultivation and trace every interaction throughout the production cycle. ERP allows users to sync daily activities for compliance and record and archive information about plant phases, additives, employee interactions and more. 

  1. Company-Wide Integration 

We mentioned previously that one of the biggest issues for MSOs is a lack of standardization and visibility across business units. An ERP solution connects departments, data and processes into a single system, providing MSOs with one single source of organization-wide truth. Instead of relying on disconnected data from independently operating software systems, with an ERP, MSOs can make faster, better decisions about the health of their entire business.  

  1. Product Quality and Consistency 

Ensuring consistency and quality across operating entities can be difficult without a single solution in place. With an ERP system, MSOs can standardize quality control measures across the business, giving users visibility into how each business unit is functioning. Based on quality data, users can gain insight into which entities have more recalls or what facilities are producing more waste. This information not only helps MSOs meet GMP and other regulatory standards, but it also provides them with insight into where to focus additional time and investments. 

  1. Operational Efficiency 

An ERP solution built for the cannabis industry allows MSOs to consolidate and streamline operations across multiple business units. Rather than relying on purchasing data and financials from each state-specific business unit, for example, with an ERP solution MSOs can oversee the entire portfolio of purchasing, allowing them to buy items at a higher volume and increase overall efficiency. 

A more efficient business also allows MSOs to scale quicker, making it easier to acquire a new business because those standardized building blocks of operational efficiency are already in place. When a new business or employee is brought on, there’s no need for a massive training or integration effort, since processes are institutionalized across the business.  

  1. Unorganized Data 

For MSOs without an integrated solution in place, it’s difficult to ensure that the data from each location’s operations is accurate and organized. That’s because without complete visibility across all entities, it’s easy to miss trends in data and difficult to make real-time business adjustments. 

ERP software provides multi-state operators with end-to-end management of their entire operations. That means from the moment materials and ingredients enter your facility until the finished product is delivered to your customer, an ERP system is there to help manage every aspect of your business. For MSOs, an ERP collects and organizes data from all entities into a single system. While every business unit will have its own cultivation practices and data around costing, crop management, waste and harvest processes, all of that information will automatically be pulled together in one place to provide users with insight into data discrepancies and the overall health of the organization.  


To learn more about the future of the cannabis industry and how multi-state operators can plan for future regulatory changes with the help of ERP software, register for our upcoming webcast. For more information on CannaBusiness ERPreach out to us. We’d love to chat. 


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