Technology

Cannabis Businesses reap benefits from ERP software

In an previous post, we considered five styles in the 2019 nutraceutical market. Each trend presents both opportunities and issues, and we promised to look more meticulously at many of those. “All things cannabis” was one of the 2019 styles we recognized, and it’s hard to overstate the value of that trend within the top nutraceuticals industry.

As the industry proceeds to gain significant (and legal) footholds in both Canada and the U.S., one trend-within-the trend is the growing interest of traders in the cannabis industry. And while there are obvious opportunities within this pattern, there are difficulties as well-mostly bordering the underlying workflows, operations and financial management systems had a need to attract, make an impression and reassure equity shareholders. Let’s review the condition of cannabis investment today, and then consider four key functional elements investors look for and savvy cannabis companies are trying for.

cannabis software
There are now dozens of publicly traded cannabis companies and the best already are worth billions. A lot more than 50 U.S. cannabis companies are actually trading on the Canadian Securities Exchange (CSE) as they contest to raise capital to range their operations. Meanwhile, Canada’s major cannabis firms found their way onto the brand new York Stock Exchange (NYSE) and Nasdaq in 2018.

2018 was an extremely busy season for Canadian cannabis companies, as Altria (makers of Marlboro), entered the Canadian cannabis market with a major investment in Cronos Group, a cannabis company in Toronto. Constellation Brands (parent or guardian company of Corona Beer) put $5 billion into Canopy Expansion, a publicly traded Canadian cannabis company. And Molson Coors, another brewer, created a jv with a cannabis company in Quebec.

The writing is on the wall: small-, medium- and large-sized cannabis businesses will continue to be received by bigger companies, whether by choice or just to gain usage of the capital required to make it through. Interest from traders can appear ideal to many small and growing cannabis organizations, however in order to appeal to investors-both public and private-they must demonstrate a certain level of maturity, both bordering creation and in conditions of the accounting. What exactly are traders looking for?

Traders want auditable financials
Cannabis and nutraceutical companies seeking collateral money must be scrupulous in their accounting. Traders want to see that their goals hold the financial and businesses reports that permit them to deeply understand a business in familiar, industry-standard formats, and from an accounting system that is secure and auditable.

Entry-level accounting applications do not supply the strict accounting control buttons and audit trails that businesses seeking outside investment need. Many do not promote or enforce business process controls throughout your procedure, including making sure compliant separation of duties. It also doesn’t provide your management team with profound financial and operational performance visibility critical to achievements of your distributed targets to increase market show, revenue and profitability.

Investors need to find out you can grow
Investors need to know they can expand a firm. Cannabis companies seeking collateral investment are smart to take up a financial management solution that can unequivocally deal with that progress in smart, compliant ways. Shareholders wish to know their investment goals have the system to expand and generate a profits on return that matches their expectations.

Many smaller companies and startups focus on an entry-level accounting system. They are simply perceived as easy to execute and easy to use. However, as you increase, and your business requirements have more advanced, you’ll likely come across the frustrating limits of such something. Our clients associate reports of time-consuming consolidations, inter-company transfer processing limitations, sluggish and unreliable reporting, error-prone manual functions and security issues. The truth is, entry-level applications simply aren’t made to provide the sturdy financial-management functions a cannabis business finding your way through or receiving collateral investment needs.

Shareholders demand a safety protocol
Recalls are bad for business. Not to minimize the real risk to human health, but a recall event is enormously costly for a business, both in terms of financial deficits and ruined reputation. In a comparatively new industry like the cannabis industry, it’s safe to state that regulators will be keeping a particularly watchful eye.

Basic level accounting systems are simply just not designed to provide the specific level of monitoring and quality control cannabis businesses need. Only a solid ERP solution suitable for the process processing/nutraceutical industry will offer the tools essential to show investors-and customers-that your organization takes safety critically.

Traders want actionable insight
Investors love accounts. They want perception into every part of your operations. Access to timely relevant data-sliced and diced, in depth and consolidated, permits you as well as your investment partners to help make the right decisions that cause repeatable, profitable expansion. Robust and adaptable reporting tools providing visibility essential to get around market changes, understand performance and make course corrections as needed.

Entry-level software users often export data to spreadsheets to be able to filtering and compute data sets against functional data. Obtaining reviews such as earnings and reduction by location or income by staff are difficult, if not impossible. These applications just can’t provide a sufficient depth and breadth of understanding into the financial and functional aspects of your company to satisfy buyers that you’re a deserving target and also to keep you profitably on the right track once you obtain that investment.