Tracking America’s Cannabis Supply Chain Challenges

Canada has declared Cannabis or Marijuana a legal medicine. United States is following suit, however here in the US, it is being done state by state, Colorado has done that for quite some time, many states are following, for the latest states please google as it is changing every time you read this article. So naturally there are a lot of Cannabis vendors that are going to set up shop and start selling them. One weird thing that I learnt was that let us say there is State1 that has declared Cannabis legal, then State5 has declared Cannabis legal, but State2 that is in between State1 and State5 has not declared Cannabis legal, if you are transporting Cannabis in a truck from State1 to State5, and if a cop happens to pull you over in State2, then you could be potentially arrested because as a trucker you are transporting an illegal substance, how interesting is that? I am sure there are Cannabis lobbyists working this through with the Federal and State Governments.

In my attempt to learn about this Cannabis or Marijuana, I am learning that Cannabis is similar to alcohol, however without the side effects of alcohol, when people consume alcohol, the first thing that happens is their judgement is impaired, that is why we are told do not drink and drive, because at the speed which we are going, if our brain does not make decisions fast, we would end up in an accident, which is what alcohol impairs us from doing, then some people turn bitter, then some people throw up, the people that turn bitter start becoming violent and show the violence towards the people around them, whereas Cannabis is not like that, it still slows down the brain, they take time to pick up things, if their brain effectiveness is 100% without Cannabis, then with Cannabis, their brain effectiveness is 90%, which without Cannabis they would pick up faster, other than that, it triggers a lot of hunger, and puts people to sleep. I have known people that said they ended up eating a lot of potato chips after taking in Cannabis to satiate that hunger. And then they sleep a lot, so essentially it is a lesser evil compared to taking in alcohol. Also previously Cannabis was categorized along the side of Heroin, but further research is suggesting that Cannabis should not have been categorized that way, it is not as harmful as Heroin, but it should really be categorized along with alcohol. More research is underway in order to complete such a study. Again I don’t know if I am allowed to drive after taking Cannabis, I wouldn’t be comfortable driving if I know my brain is functioning at a 10% less effectiveness, so be careful, do not drive after taking Cannabis.

In order to be successful, the Cannabis vendors need to have a very good supply chain infrastructure in place with the customers being hospitals and the sick patients that are buying this Cannabis with prescription from their doctors. So delivering good quality Cannabis involves growing it successfully, without any bugs eating the Cannabis floret, often Cannabis is grown indoor in a temperature controlled light controlled environment, it is like growing a plant, essentially Cannabis is a flower, so it is growing a plant, plucking flowers, in other words harvesting, ensuring the flowers are of very good quality, do some kind of quality audit by observation, looking for certain coloration and attributes in the florets, then doing some kind of a shelf life tracking to ensure the flower (like produce or vegetables, or any other perishable food product) has not expired and enough shelf life days are left, so that the product can hit the pharmacies, be in the pharmacies for a few days, then the consumer can buy the product from the pharmacies and then consume the Cannabis before it expires.

Also as this is used as a medicine, incorporate lot tracking because that is how medicines are tracked today, the idea being if the medicines turn out to be defective, it is easy to go back and catch hold of that batch or that lot and do an easy and quick recall of that lot/batch very fast. So nobody gets killed or impaired by the defective product. Also each floret is tracked separately and this being expensive, I would think each floret will be tracked with some kind of a Serial#, similar to expensive electronic goods like Television, Computers, Mobile devices etc. And also in the Cannabis world, the Serial# could potentially help understand where the Cannabis floret originated, for example if you look at the UPS tracking # that starts with 1Z, by decoding the numbers UPS can exactly determine at which store or Distribution Center, the package originated and of course more pedigree type of information can be associated to the Serial# while ascribing Serial# to the Cannabis that was just harvested. And this Cannabis being a controlled substance, there would some specific documentation requirements for transportation, I am sure all the states want to make money of this, so it will be taxed at some level at some point, hence specific reporting documentation might be needed to accurately report the monetary value of the product and hence the taxes can be paid to the appropriate authorities on a timely manner. Also there might be temperature controlled transportation requirements that might come up, that is the way produce or perishable food products are transported today and if the produce is changing hands, the parties also ensure when they take up such produce, they ensure such a temperature controlled ambiance is maintained throughout the Supply Chain, so the produce does not perish. I am guessing there will be similar requirements for Cannabis as well.

Also in the food industry there is something called catch-weight, when a piece of meat is picked for order fulfillment or even a piece of cheese, these products cannot be exactly cut for the order quantity, instead there will be some allowances that are allowed, so the customer still gets the best cut in order to make that special steak with that special cut, similarly cheese that is made in a specialized process, will have to be shipped as that one round piece or that one piece, hence that entire piece needs to be weighed and sold by weight, so the pickers write down the weight of such products as part of the picking process hence the customer is charged for those items based on weight and a price by weight is maintained in the item master. So there might be similar requirements for Cannabis as well, if there is one piece of floret, that needs to be sold, that might be sold as one floret by weight, instead of exactly splitting that by weight to fulfill the order accurately by weight.

So as a Cannabis vendor how do you do data collection? And how do you maintain and manage your inventory, so you not only have very good visibility to the inventory on hand, but also able to effectively fulfill orders, accurately and ship them on time, so your customers get them on time, then consume them and overall have a good experience with your product. And like any other new product, this whole thing is going to evolve in many different aspects, for example the vendor might start as a mom and pop shop, then the business picks up, volume increases, then also there may be change in legislation related to marijuana, so as a vendor you will have to comply with all of those changes, as more states make marijuana legal, you will have to support this additional, volume of business, shipping to the end customers in these states using the right transportation infrastructure, while ensuring that the shelf life is maintained and the product does not go bad for whatever reason.

So how do you implement an effective data collection process to manage this Cannabis Supply Chain? Before we talk about data collection, it would make sense to understand the different categories of the Cannabis shops.

Tier 3 – Mom & Pop Shops

These are tiny operations, that don’t have a lot of volume. So they don’t need very expensive tools for data collection, a simple mobile app that can scan barcodes using camera would suffice. The main goal here is to have some kind of a systemic solution to track everything instead of relying on paper or spreadsheets, so that the data is available, also as this industry is growing fast, as states repeal the restrictions of Cannabis use their volume is going to only increase, which means all this data needs to be ported to a slightly larger system, so that these mom & pop shops can still migrate to mature systems without losing the data.

Tier 2 – Small but growing shops

These are small shops but are growing pretty fast, so they don’t need ultra-sophisticated tools but need quite appropriate tools in order to do effective data collection. An iPod in a sled with a bar-code scanner is not a good idea, because instead of doing their function these guys will be doing Apple updates often. Also iPods don’t last for more than 4 hours because they have such a small battery. Also after certain versions iPods don’t even turn on, and if you want to take advantage of Apple’s Face-time or iMessage in your distribution center, all you have to do is forget the Apple id that you put in, you will never be able to start the iPod unless you put in the right Apple id back in the iPod, if you forgot it, you pretty much bricked it. So my recommendation is always go with Android, Android is much more flexible to accommodate your business requirements. There are many rugged Android devices that are available that are much better fit. And Android with a built on bar-code scanner is a much better fit. It is simple and gets the job done. The focus is not so much on the efficiency of the process, but much more on the data collection and data integrity with ease of use. And again keep in mind while the business grows, all this need to be migrated to a much more mature enterprise grade Supply Chain infrastructure.

Tier 1 – Much bigger Shops, typically Corporations

These are much bigger distributors, something similar to a much more modern, larger pharmaceutical distributor, for example similar to Amerisource Bergen or somebody like that. These guys manage a much larger Supply Chain, also a much more nimbler Supply Chain, the nimbleness is very important because if there is a recall, that needs to be implemented very fast and the defective product needs to be recalled.

Wearable data collection tools lend really well to the cannabis supply chain for the following reasons

The cannabis product is small, which means the operator can wear the wearable in their arm and still carry the product, pick the product, drop them in the out bound carton going to the customer. Hence the processes are efficient and also the user gets a tool he/she likes and enjoys using it.
Wearables are much more suitable for the next gen work force.
However the caveat is that, the application UI/UX needs to be optimized for the wearable, or else the user experience will be a nightmare.

Cloud base systems are a much better fit than on-premise solutions for the reasons below

You don’t need an army of IT people make sure these servers are running.
The cloud automatically scales up and scales down, so you don’t have to worry about adding and removing servers based on the volume of your data.
It is very easy to buy cloud infrastructure from AWS or Google Cloud or Azure cloud vendors.
Updates, patches, any other compliance requirements at the server level and operating systems level is automatically taken care by the cloud vendor
Ubiquitous access, as long as internet is available the cloud can be accessed, hence your application running in the cloud.

I can add more reasons, but most of them are the same reasons why you would host any application in the cloud.

So what kind of challenges are you running into, while you are trying to build systemic infrastructure to manage your Cannabis Supply Chain? Would love to hear your thoughts.

Originally published at Smartgladiator.com on March 16, 2019.