Choosing an ERP system for your cannabis extraction and processing business can be a complex process that requires careful consideration.
Businesses growing, processing, and selling cannabis must deal with challenging operational and technological issues and complex regulatory requirements.
It is essential for startup companies in the cannabis space or rapidly growing and maturing companies to understand and stay ahead of the challenges. Regulatory requirements vary depending on jurisdiction and sector.
For example, cannabis retail and extraction or growing companies face different regulatory environments than those operating in the retail sector. The cannabis supply chain includes three main components: growing, extraction, and retail sales. Each segment has its unique challenges.
In this article, we will examine the challenges in cannabis extraction and how they affect your choice of an ERP system to manage your cannabis business.
When the cannabis plants are harvested, the molecules inside are converted into a usable form through extraction. Various extraction methods are used to convert the substances found in the cannabis plant into a functional state. The most common procedures involve washing the extract with butane, propane or hexane. Butane is then evaporated out of the liquid leaving only the extract. Other methods include using alcohol and carbon dioxide for extraction. Winterization, distillation and filtration are used to separate pharmaceutical compounds from undesirables during processing. These extracts then have their solvents removed by distillation and filtration before refined into pure forms like THC, THCA, CBD, CBDA and CBN.
The cannabis industry has particular regulations regarding disposal, returns, and production. As an emerging industry that was recently legalized in Canada and is still being legalized throughout the USA, Regulations are being tweaked frequently by Health Canada. They have named cannabis products Cannabis 2.0, which includes everything from edibles, extracts, and topicals to smokable concentrates. With increasing regulations and complex products, companies face the challenge of selecting the right start-to-end cannabis ERP solution that is flexible enough to quickly and cost-effectively cater to business needs while complying with regulators.
Key challenges for cannabis extractors to keep in mind.
The cost and efficiency of cannabis production equipment
Extracting at a small scale is easy with the right equipment, but extraction efficiency is not high with these methods. The lack of available equipment can be a problem in meeting large-scale production. Scaling up to produce larger quantities requires more and costlier equipment. However, getting newer equipment doesn’t just increase the production revenue as the equipment, utilities and other supporting infrastructure increase. Companies often track these costs to factor them into production costs.
When production scales up, so do the purchase orders for all the hazardous materials needed. This includes carbon dioxide, ethanol, butane, propane and cooling liquids for refrigeration. The process often stops and starts, which takes time and labour since workers are required to monitor the process. Your ERP system needs to be flexible enough to accommodate recording these changes to track and report accurate production costs.
Scalable, adaptable and flexible.
- Handle multi-jurisdictional operations
- Manage user rights and tasks for control and security
- Monitor cultivation and operation activity costs
- R&D to support new extractions, infusions and concentrates
- Capable of handling all of your data reporting needs
What is HEMP?
Hemp is another variety of Cannabis sativa that is specifically grown for industrial and medicinal use. Hemp is used in a wide range of products, including clothing and paper. Along with bamboo, hemp is among the fastest-growing plants on Earth.
Is hemp the same as CBD?
Both hemp and CBD oils come from the plant cannabis Sativa, but they are different substances. Hemp oil comes from industrial hemp, the term used to designate cannabis grown for food and fibre (not pot).
Tayana Solutions provides end-to-end software consulting. We specialize in process manufacturing and can help you with eCommerce, production, quality, regulatory reporting, and customization needs. Contact us if you are looking for a compassionate and reasonable service provider to help with your digital transformation.
Vijay comes with a vast experience in ERP and enterprise solutions space with about 20 years of experience in various packaged application like Acumatica, SAP, Orion, Salesforce.com, SugarCRM and, SalesLogix.