Streamlining Cannabis Cultivation and Production to Drive Profitability

For growers and processors who want to streamline cannabis production to drive profitability need to start with forecasting sales to plan the resources, and factoring in timelines for state testing and quarantining as well as how much raw material waste you will generate.

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    For cannabis growers and producers, streamlining production to drive profitability is about end-to-end planning. It starts with forecasting sales to plan the resources (people and equipment) you need so your growing and production processes meet the customer demand. Along the way, you need to factor in state testing and quarantining requirements as well as how much raw material waste you will generate.

    If you track everything accurately, you should have a good idea of approximately how much product you will have to sell. And then in the end, all that information should allow you to evaluate all your processes—from cultivation to testing, production and fulfillment—as well as the vendors you work with and the people you hire to know if they positively or negatively impact production.

    The key to getting there is access to real-time, accurate data—so you know not only what’s happening today but what to expect week-over-week and month-over-month. And that’s where an ERP solution built for cannabis growers and producers comes in handy.

    In this blog, we examine the keys to streamlining cannabis cultivation and production and how SilverLeaf, powered by Microsoft Dynamics 365 Business Central helps you solve the challenge.

    Tracking Quality Testing

    Working with a controlled substance like cannabis and producing consumable items requires accurate record keeping of material and product testing. The testing process slows down production, but it’s also required by state regulations. The key is to use a tool like SilverLeaf that streamlines testing and record keeping in order to minimize delays.

    SilverLeaf has a feature called production measures that allows you to assign testing to different steps in the production process and capture that information, such as the temperature of raw material during production. In addition to facilitating testing, the data drives production decisions based on the recorded measurements of a product or production process. For example, you can record and identify that a vat converting cannabis into a crude distillate at a temperature of 180° degrees yields X percent while at 200° that same vat yields 10 percent more.

    You also have the flexibility to continually test and capture information while raw materials go through production and in finished form. This enables you to make qualified decisions on how to best produce products at the highest yield and the highest efficiencies. Factors you can track include the temperatures of and the calibration of machines as well as the potency of final products and the amount of inventory after raw materials are converted to distillate form. You can also track state-mandated data for certificate analysis tests such as the presence of pesticides, heavy metals, and solvents.

    Monitoring Waste

    Destruction documentation is a critical requirement for doing business in the cannabis industry. When producing products like gummy bears or jellybeans, not everything from the vat of liquid makes it into the food molds. You’re left with some unusable material. However, it’s still a controlled substance that may contain THC or other cannabinoids that need to be tracked by qualifying and quantifying the destruction.

    SilverLeaf gives you the ability to compliantly trace the source of cannabis material and track that information up to the destruction point. You also eliminate tracking data manually while gaining the ability to automatically produce documentation that references the origin of where destroyed material came from when required by your state.

    For any raw material you purchase from a vendor, you can also measure the percentage you end up destroying to determine which vendor’s materials perform best. The more material you don’t have to destroy helps you increase the production of your manufacturing processes.

    Another key feature is identifying if any production machines are not working efficiently. For example, you might put 100 pounds of material into a vat and only get 80 pounds of crude distillate because the material sticks to the cylinders. In addition to spending extra time to clean the machine, you end up throwing away 20% of the material.

    Managing Production

    For cannabis cultivators, managing production goes beyond determining how many of each type of plant to grow. There are also decisions to be made about where to grow the plants and where to maintain them once they bloom.

    SilverLeaf lets you record and analyze plant production orders and see your cultivation capacity as well as the products you’re going to produce by strain, by location, and time of year. This gives you a true production plan you can act upon to determine your labor needs and to see the quantity and the week that you will receive each plant strain.

    Comparing this information to the sales forecast tells you what you need to buy or grow. You then know what you need to produce. You can also see what’s scheduled to be produced and what machines and people it takes to convert the material into finished products so you can set the production schedule.

    Gaining Real-time Inventory Visibility

    The SilverLeaf perpetual inventory feature gives growers and producers visibility into exactly where inventory is and when inventory is supposed to arrive at specific locations. An availability matrix provides flexible templates that show availability by various attributes, such as product line, time of year, day of week, or by month. The matrix can also show what’s available by strain and specific attributes such as smell, taste, and color.

    You can also drill into quantities that are available for specific customer groups or locations, which sales orders that availability is allocated to, and if any production orders will increase that availability. Both your sales and production teams can see what’s available now and what’s going to be available based on your planned production orders minus your sales orders. You might discover, for instance, that the quantity of one product is about to decrease by 500 based on open sales orders, but production also plans to deliver 900, so your net gain will be 400.

    Automating Warehouse Processes

    With SilverLeaf, you can set automatic defaults for where specific products should be located after the production process is completed—whether it’s a facility or a bin within a facility. The warehouse team can see what’s being delivered—correlated to outstanding sales orders—to start planning for the movement of that inventory. The system also identifies the location of consumables so the warehouse team doesn’t have to manually update production orders.

    For example, a production journal might identify an order that will consume a cartridge, distillate material, a box, and a label. Each component might be in different bins. But based on the automatic default to the last-used location that you can set within products and product types, the warehouse team is always retrieving items from the same bin. You can set default output bins for specific materials as well as the last bin used according to how you want to streamline the production process.

    Tracking Expected vs Actual Costs

    The purpose of streamlining cannabis cultivation and production, of course, is to ultimately drive profitability. As you track the testing of quality measures, monitor waste, manage production, gain visibility into inventory, and automate warehouse processes, SilverLeaf also enables you to track expected costs vs actual costs.

    Projecting product costs is one of the most difficult challenges cannabis growers and producers face. But with SilverLeaf arming you with accurate data on actual costs and the production performance of your assets and your personnel, your managers will have the information they need to adjust your processes. That in turn will increase your margins and your profitability.

    Mastering Cannabis Operations

    SilverLeaf and D365 can easily manage cultivation and production, in addition to other aspects of managing your cannabis business. Mastering cannabis operations encompasses all of these areas, and the SilverLeaf team wants you to succeed. Signup for our 4-part series on Mastering Cannabis Operations to learn how you can better manage processes in your operations.