Analytics in the cannabis industry can help a business run efficiently and give meaningful insights into aspects like sales performance. Most organizations think of these bottom-line benefits when they consider whether to invest in a solution that can offer them the kind of analysis that can keep them ahead of the competition.
One of the possibly more underrated aspects of an analytics tool, though, is the ability to handle certain regulatory aspects that are such an important part of new cannabis laws. Recent news out of Missouri offers a cautionary tale that helps underscore exactly why this kind of tracking is so important.
What is regulation?
Recreational cannabis sales in Missouri became legal in February. As in every other state where recreational cannabis sales to adults have been legalized, Missouri instituted a series of regulations aimed at making sure the products are produced and sold safely. Among the many manufacturing requirements are the mandatory disclosure of the exact level of THC 9, CBD, and delta-8 per serving or dose, and packaging rules such as a prohibition on using more than one color, and no designs or shapes of humans, animals, or fruit.
Every state also has its own regulations surrounding cannabis cultivation and testing. These regulations are intended to drive business to the licensed retailers in the state, rather than the illegal markets. The licensed retailers have to meet these regulations so that customers know the products being sold are approved and therefore safe. That’s where the problems in Missouri developed.
Recalls affect businesses
Missouri’s Division for Cannabis Regulation (DCR) issued a recall in August of products sold to dispensaries and manufacturers by the infused product manufacturer Delta Extraction. The DCR said the recalled products were not compliantly tracked in the system that the state uses for track and trace – so the state could not verify that the products came from marijuana grown in Missouri or that the product passed required testing prior to being sold at dispensaries.
MJBizDaily reports that the recall will cost Missouri cannabis businesses millions of dollars in lost sales and inventory. This includes the product itself that is not allowed to be sold, as well as oil that can’t be used in other products.
Smaller independent businesses are affected more than the larger companies because many of the larger companies source their own products and rely less on other suppliers. Many retailers are waiting for word on how to proceed. While the best-case scenario would be eventually getting approval to sell the products, that is unlikely. It is more probably that they will have to either destroy the product or return it to the manufacturer.
Data could make a difference
The situation underscores the importance of organizations finding the right analytics solution. Missouri requires operators to all use the same software state-wide, and some businesses are pointing a finger at that organization for not issuing some kind of warning when numbers were entered into the system that could have raised a red flag. (For its part, the company says it is up to the regulators to take action on any irregularities.)
Regardless of who is ultimately to blame in Missouri, the ordeal shows that although analytics requires organization to make an investment, the move could ultimately end up saving a business money in the end. The data from a trusted analytics solution can give you the history of a product from the moment it was planted, not only giving you a leg up on the regulatory requirements a state imposes, but also preventing you from falling victim to an unexpected recall. For the smaller organizations that do not source their own marijuana, it is imperative to know where their product is coming from. There is certainly a financial benefit to having that seed-to-sale information, but along with that comes a peace of mind that no unexpected expenses will pop up.
An organization can’t control every variable. There are bound to be unanticipated roadblocks in the life of any business. With the right analytics solution, though, a company can be sure it is doing as much to prepare as possible, whether that’s for the problems they do expect, or the ones they may not have any control over at all.
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