Paul Botto is president and co-founder of Lucid Green, a Brooklyn-based inventory management company.
The cannabis industry is one of the fastest growing industries in the world. With emerging retail markets, the U.S. cannabis market is projected to reach $72 billion in legal sales by 2030. But despite this exponential growth, the cannabis industry is plagued by outdated processes.
Due to complex regulatory requirements and the new nature of the industry, we have not experienced many of the benefits technology can offer at scale. Extensive use of technology will help create a more streamlined cannabis supply chain that will grow the industry, reduce costs and increase transparency and trust for all stakeholders.
As another retail market is set to launch, its proposed regulation puts the industry at a tipping point followed by other markets. New York is leading the way by incorporating innovative technologies into its proposed regulations to ensure its markets are as efficient, safe and successful as possible.
Consumer impact
Educating consumers is key to growing the New York market and the industry as a whole. The state is proposing a set of technology-driven regulations for packaging, labeling, advertising, and testing requirements for cannabis products. One of the requirements calls for the inclusion of scannable barcodes or QR codes on cannabis products to allow consumers to view verified product information, including Certificate of Analysis (COA), from a simple scan. I’m here.
A product’s COA ensures that the product meets safety and quality standards set by regulatory agencies. Some QR codes can also verify the authenticity of products, helping prevent counterfeit and black market products from entering the legitimate market. For the consumer, having direct access to her COA in an easily understandable and accessible format where the product is verified is a huge step forward in giving additional information and confidence in the purchase.
Currently, the industry mainly relies on high-level product classifications such as Indica, Sativa, and Hybrids, and is heavily dependent on THC levels. However, these classifications do not provide consumers with details about the exact content of the product or how it might affect them.His COA of the product goes beyond these high-level classifications. to detail what is actually included in the product. By making a product’s COA easily accessible, the industry can better educate consumers about their products and gain greater insight and control over their experience.
For the cannabis industry to continue to grow, consumers need to feel confident that they will have a safe and enjoyable experience. The industry is not growing as current cannabis users are buying more products. It’s growing as more information becomes available to your family, friends and neighbors so that they can feel confident and informed about their purchases and experiences.
Supply chain modernization
New York is projected to become the second largest legal cannabis market in the United States, with an estimated $4.2 billion in legal sales within five years. As New York prepares to open up its retail market, it assesses the many obstacles faced by industry stakeholders to ensure that its regulation drives the market to success.
In addition to the superior consumer experience technology brings to the industry, all stakeholders in the supply chain will benefit from the widespread use of technology. Currently, cannabis distributors and retailers are plagued with suboptimal and enormous manual inventory management costs.
For distributors, this often means an additional costly “touch” when managing inventory flow and order fulfillment. Retailers, on the other hand, often experience increased costs from manual data entry and secondary decals, as products take longer to reach shelves. On average, manual inventory management costs retailers more than $10,000 per store per month.
The same QR code as above enables dynamic product-specific information, allowing brands, retailers, and distributors to continue adding and sharing digital information about their products with partners throughout the product lifecycle. can do. This eliminates the extra “touches”, data entry, and sticker steps. And by using this technology for their own internal efficiencies, brands, distributors and retailers can recoup their profits, cut costs and increase sales for all. increase.
New markets leveraging innovative regulations level the playing field and set the stage for success for social equity licensees. Because social equity licensees typically have less access to capital, they carry more weight per dollar compared to some of the larger companies in the market. The dynamic information-sharing capabilities of these types of his QR codes allow social equity licensees to open stores faster by reducing the cost and time spent on manual inventory management. You can also highlight your social equity status in your results, making it easier to build trust with your customers.
New York is actively trying to address issues within the industry with regulation that promotes technology. These should be the blueprints of the future for other markets and industries.
Related: NY Cannabis Insider’s Week in Legal Weed August 28, 2022
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