There’s a lot of growing going on in the cannabis industry—and it’s not just the plants.
In the United States alone, the cannabis industry has only a very recent history with legalization. But, let’s face it: Marijuana has been popular far longer than it's been legal. Since its recreational legalization in Colorado and Washington in 2012, the cannabis industry has been growing like a weed—literally.
However, even today, getting a cannabis company off the ground comes with many different challenges. Regulations, licensing, competition, you name it. The cannabis industry is a promising one, but there are many hoops to jump through if you want to take your cannabis company from one or two backyard plants and grow into a multi-state cannabis powerhouse.
Of course, with great challenges, come great opportunities for cannabis in 2021.
Recent trends in the cannabis industry show that the many different uses for cannabis products are being not only normalized, but endorsed. This means an increase in sales, popularity, industry education, and—inevitably—competition. As more and more cannabis companies work to take advantage of the emerging market, the industry's weaknesses begin to reveal themselves.
At no fault of their own, cannabis companies are experiencing growing pains that many other industries don’t have to endure, and here are a few of them:
Cannabis problem #1: industry biases
Let’s face it: the biases against the cannabis industry are very real—socially, politically, and economically—even in 2021. A growing cannabis company, just like every other company, needs everyday products like computers, light fixtures, cleaning supplies, and office supplies. However, it's harder for some cannabis companies to easily access these products due to limited opportunities of partnerships—financially and commercially.
Businesses, product vendors, banks, and many different institutions refuse to work with cannabis companies for a number of reasons. Sure, the volatility of a new, highly regulated market may scare some businesses away from partnering with cannabis companies. However, to be frank, many businesses don’t want to be associated with cannabis companies because the industry itself isn’t “socially acceptable”—to their standards.
Vendors refuse to have relationships with cannabis companies due to the infancy and controversy of the industry; cannabis companies are struggling to grow because they don’t have strong vendor relationships due to the infancy and controversy of the industry. A catch 22 of the 21st century.
How to overcome cannabis industry biases
Purchase your cannabis company’s products through a reliable, centralized, and cannabis-friendly purchasing platform that “revolutionizes” your cannabis company’s growth—allowing for “almost instantaneous” expansion. All the vendors you need to grow your cannabis company—in one place.
Cannabis problem #2: unequal payment terms
As mentioned above, institutions—such as banks—do not offer cannabis companies the same accounting terms as they do companies in other industries for fear of financial risks and legal prosecutions. By receiving extended payment terms, such as Net 30, companies are able to have more cash on-hand to strategize for growth as opposed to paying for bills and products immediately.
We are able to split up our bigger bills and better forecast our payments. Instead of having a $300,000 bill at once, we can split up our payments so that they are easier to manage. -Neil Hesse, High Level Health
With Net 30 payment terms being unavailable to the cannabis industry, cannabis companies can kiss the idea of having cash on-hand to execute growth plans goodbye. That is, of course, unless cannabis companies can get Net 30 terms—without a bank note.
How to overcome unequal payment terms in the cannabis industry
Partner with a platform that allows you to have more cash on-hand to make smarter business decisions. “Forecast payments” with a purchasing system that grants your cannabis company Net 30 terms to execute growth plans in a highly restrictive, yet promising market.
Cannabis problem #3: disorganized operations
Organizing operations processes—from purchasing products to organizing invoices to making sure those payments are made on time—is a challenge for any new industry. It is especially a challenge for the cannabis industry because the cannabis industry itself can feel like the “Wild West” in some respects. It’s a contradiction really: a highly regulated industry that feels almost as though there are no established, efficient practices for cannabis companies to follow in order to grow.
To touch on one operations issue in particular, invoice control for cannabis companies seems to be a constant issue. High Level Health, before consolidating their hundreds of invoices into one monthly invoice, had no approval process for their purchases and were struggling to manage both their time and payments by trying to organize and pay over 400 invoices every month. A decentralized payment process took away from High Level Health focusing on doing what they were best at: growing—both their plants and their business.
Hundreds of invoices across all High Level Health locations—consolidated into one monthly invoice.
How to Overcome Disorganized Operations in the Cannabis Industry
Consolidate your monthly invoices into just one monthly invoice. With a centralized payment process across all of your locations, your cannabis company can “focus on making [your] business better, and not have to focus on a tedious payment process.”
The Bottom Line for Cannabis Companies
The potential for the cannabis industry is exciting; partner with a purchasing platform that specializes in helping you grow your cannabis company. Pay one monthly invoice across all locations. Take advantage of Net 30 terms to invest in your growth—not bank interest rates. Partner with a vendor that supports you, your cannabis company’s growth, and this budding industry.
All of your purchases. All of your payments. All on one platform. Ready to take your cannabis company to the next level? Schedule a demo with Order.co today!
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