New Ways Legal Cannabis Affects Supply Chain
The legal distribution of marijuana is still fairly new, and brings about several adjustments to the way the industry runs. Cannabis is a thriving industry, and it’s only expected to keep growing by the year 2025. Right now, supply chain is an intricate and crucial aspect of cannabis distribution, and as the industry grows, it’s destined for change. An industry that was once solely a black market, now requires a new scope in supply chain management. The constantly changing regulations and high consumer demand bring about many obstacles for the distribution of cannabis.
In Comes the Middle Man
The legalization of marijuana introduced several new aspects of the industry, including supply chains. Of course, all product-based business need a supply chain, but for cannabis it’s a bit different. Back when legalization was strictly from a medical standpoint, distribution was straight forward. Typically, the growers or cooperatives personally delivered the medical products directly to the end user. However, recreational legalization is totally different. Now, a very basic supply chain model for cannabis looks like this:
1. Growers → 2. Distributors → 3. Sellers
With licensed marijuana distribution companies, logistics and transportation is handled by the distributor, not the grower. Due to this, distributors can represent various brands, selling the same cannabis goods to different retailers. A similar model is that of the beer distribution industry. In fact, many licensed distributors say beer distribution inspires similar operations of this industry. There’s certainly room for improvement in supply change, and it’s assumed the processes will continuously change along with the regulations.
A rather unnoticed yet important principle in the cannabis supply chain is security. Consumers want trust with their local sellers, which naturally falls back on the distributors that get these products to the shelves. Since cannabis distribution still isn’t completely normalized for all citizens, it’s paramount to the industry that consumers feel the supply chain is reliable. Similarly, like any good business, cannabis retailers need to keep up with demand. Having secure supply chain management guarantees your ability to meet consumer needs.
What’s to Come for Cannabis Supply Chain
At this time, federal regulations still place big hoops to jump through for any marijuana-related businesses. The constantly changing landscape and the rapid legalization across America forecasts more changes to regulations in the future. In this early phase, adaptability is essential for distributors and sellers. In order for distributors to keep up with the changes and efficiently meet high consumer demands, they will have to adjust to fit the standards.
Although efficient supply chain is vital, unique branding and brand management is right there with it. Different companies attract certain consumers, and without their demand, distribution isn’t the biggest difficulty. Optimize every area of your cannabis company and spruce up your branding with the help of our professional marketers at Herban Creative. Contact us today for more information.