Necessary Elements of a Successful Marijuana Supply Chain

Getting involved in the thriving marijuana industry can be extremely profitable and rewarding, but to succeed, you must first understand the industry inside out. But where should you start?

First, study the marijuana supply chain to understand everything that goes into creating and selling a marijuana product. Then you can pinpoint the area where you’d have a competitive edge.

In this article, we’ll cover the 4 main steps of the cannabis supply chain, how they contribute to the industry, and the opportunities available to entrepreneurs who want to get involved. Read on!

What Is A Cannabis Supply Chain?

A cannabis supply chain is the network and activities involved in creating a finalized marijuana product for consumption. It’s all of the moving parts and people, including cultivators and growers, packagers, distributors, and retailers. Everyone that takes a product from seed to sale—whether that’s just the buds, or edibles, vape pens, drinkables, and more—is part of this supply chain.

Marijuana Supply Chain Factors to Keep in Mind

Whether you plan to be at the beginning or end of the supply chain, knowing your state’s rules and regulations and the steps involved in the cannabis supply chain is imperative for success. Every business that touches the marijuana plant along its path from seed to product, must have the appropriate license to do so.

The Main Stages of the Marijuana Supply Chain

California marijuana supply chain

1: Growing & Cultivating

Growing and cultivating cannabis plants is the first step in the marijuana supply chain. Each grower must have the appropriate operating licenses from their individual state in order to plant, grow, and harvest marijuana. Once the plants are fully flowered, cultivators can either treat their own flowers or ship them to a licensed company for production.

As a fairly inexpensive and easy step, this stage is enticing to both small and large-scale growers who want to take their growing hobby to the next level. If you do decide to take on a growing operation, keep in mind that it has its hurdles, including navigating different laws, regulations, and licensing fees.

After your plants are cultivated, you’ll then need to have them tested and eventually manufactured to continue along the chain.

2: Testing

Cannabis is tested twice throughout the supply chain for regulation compliance, quality, and safety. First, the plant will undergo testing after it has been harvested, and then again after the bud has been converted into a consumable. After testing, batches are logged in a seed-to-sale system, which tracks the rest of the process.

If you aren’t interested in growing cannabis directly, testing can be a viable option for a business venture. Again, each state has its own testing standards, so you’ll need to know exactly what is required in yours before opening a lab.

3: Manufacturing & Distribution

Once tested and approved, plants are then sent to manufacturing companies. Here, products are prepared for sale and consumption. As a manufacturer, you’d be responsible for trimming, drying, and curing the flowers. Then, the buds can be extracted for distribution and sale as-is, or used to create oils, edibles, concentrates, vapes, and other consumables. Once the final product is ready and packaged, it is distributed for testing and then sent on to retail companies responsible for the sale of the good.

Note that in some instances, companies might manage all of the components of the supply chain. But, more often than not, businesses will partner with other, licensed companies for manufacturing and distribution.

If you want to be a part of this process, keep in mind that manufacturing a cannabis product can be quite technical. Understanding the chemical reactions involved can be very advantageous at this step.

4: Retail

When the product is completed, it will arrive at its final destination for sale and consumption. Typically, smaller retailers will only participate in the final sale of the product and not in the other steps involved in the supply chain. This is a great place to start off as a budding cannapreneur as you will only have to worry about selling the final product as opposed to the extensive steps involved in the other 3 aspects of the supply chain.

Understanding the steps of a marijuana supply chain

Medical and recreational dispensaries must adhere to strict rules and regulations and can vary based on the types of products they sell. Retailers (online or in-person) often offer a selection of flowers, oils, and concentrates, seeds, edibles, drinkables, or marijuana clones for sale.

If you’d like to open your own dispensary, be sure to do your due diligence first. Conduct market research, connect with distributors and producers, obtain the appropriate licenses, choose a location, and properly market your company to increase your chances of success.

Moving Forward With Your Newfound Knowledge!

Now that you understand the diverse business opportunities available along the cannabis supply chain, consider where your future business will fall along the chain. Whether you’d like to devote your resources to growing wholesale marijuana plants, distributing, testing, or selling them, making connections throughout the supply chain will be extremely beneficial.

If you are hoping to take your hobby to the next level, or believe you could create the next big thing in the cannabis industry, you’ll be one step ahead of your competitors with your newfound knowledge about the marijuana supply chain. From here, you can make an informed decision about which process you’d like to participate in to make the most out of your time, money, and effort. With an appreciation of how everything ties together to create quality final products, you’ll be able to remain competitive and reduce your overall costs as a business owner in this booming industry!

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