Navigating the Top 6 Business Challenges Faced by Cannabis Orgs

The complexity of running a cannabis business makes it one of the more challenging industries in which to operate and turn a profit.

Sara Silver

Follow Me:

Table of Content

    The complexity of running a cannabis business makes it one of the more challenging industries in which to operate and turn a profit. As the cannabis industry continues to evolve, business owners face a unique set of six challenges that can impact their success.

    There’s a range of business types—from cultivation to production, distribution, wholesale, and retail. Some owners manage multiple entities across all five types. Special skillsets are required to know the best way to grow cannabis, manufacture the many byproducts, and then market products so they sell.

    Top 6 Business Challenges Faced by Cannabis Orgs

    1. Complying with regulations—maintaining track and trace data and getting it uploaded into the state system (such as Metrc) requires rekeying the data if your ERP system is not integrated. This not only adds to administrative costs but also increases the chances of input errors and compliance violations. If you have entities in multiple states, you must comply with the nuances of each state’s regulations.
    2. Monitoring data changes—with multiple spreadsheets and separate accounting software (such as QuickBooks), it’s difficult to lock down who can make changes to data, such as product pricing and customer terms. Changes often go through without appropriate approvals, and if an error occurs, it may be difficult to determine who made the change.
    3. Projecting available inventory vs. forecasted sales—to maximize revenue, you need to know the forecasted sales for next week, next month, and next quarter. Then you want to ensure you have the right amount of inventory on hand. If the quantity falls short, you lose sales opportunities. If the quantity runs too high, your cash flow suffers.
    4. Controlling product costs—it’s critical to identify all the rolled-up costs (including shipping) for each product lot to calculate accurate margins. Knowing your costs also gives you the ability to adjust your supply chain when necessary.
    5. Accessing financial reports—compiling numbers from multiple systems and spreadsheets simply takes too long. Plus, the data you collect today may be inaccurate tomorrow. You need to know how the business is doing in real time rather than waiting until the end of the week or the end of the month—so you can act before it’s too late.
    6. Managing multiple business entities—perhaps you have multiple properties where you grow cannabis or more than one production facility. You might also have several retail outlets in multiple states. Complex organizational structures make it difficult to combine revenues and costs to determine how the overall company is performing. You may also miss out on the ability to take advantage of vendor discounts across all your entities.

    From navigating complex regulations to managing supply chain logistics, cannabis operators need to be equipped with the right strategies, processes, and business systems to overcome these six challenges and thrive in the dynamic cannabis market.

    Top 6 Business Challenges for Cannabis Organizations Infographic

    SilverLeaf: Cannabis-Specific Functionality and Consolidated Data

    Many business owners navigate the six cannabis industry challenges by turning to SilverLeaf, which runs in the cloud and is built on the Microsoft Dynamics 365 Business Central ERP platform. As a multi-entity solution that supports up to 300 business entities and complex organizational structures, SilverLeaf adds functionality to Business Central specific to the cannabis industry while consolidating all data into one central database.

    Customers can leverage the single solution to manage cultivation, production, operations, sales, supply chain, and finance functions by tapping into these capabilities:

    • Integrate with state systems (Metrc) to automate accurate compliance reporting.

    • Documenting substance destruction and lab testing results.
    • Assign permissions and set up approval workflows to establish audit trails for data changes.
    • Track production costs and gain real-time visibility into inventory availability and valuation.
    • Streamline production schedules, strain management, product replenishment, and label printing.
    • Trace raw material usage in finished goods to ensure product safety.
    • Track the chain of custody for all products.

    • Predict yield by strain and track the location of every plant.
    • Build a bill of materials for each product to measure rolled-up costs.
    • Tie inventory to the general ledger for profitability visibility down to the item level.
    • Analyze revenue and costs for each business entity across any dimension.
    • Execute inter-company transactions.

    SilverLeaf is a user-friendly ERP solution that tackles the unique challenges cannabis growers and processors face. With functionality for vital workloads, you can easily manage, measure, and track performance to keep your operation growing. Learn more about SilverLeaf,

    For a deeper dive, check out our on-demand webinar:

    Sara Silver

    Follow Me: