Before the onset of the COVID-19 pandemic, a major irritant for legal cannabis businesses was the dizzying array of different and, at times, overlapping software packages required to operate in the industry. Cultivators, processors and retailers all need to satisfy complex regulatory requirements in addition to managing their own operations. All of this is managed through sophisticated software.
In the case of retailers and medical dispensaries that sell to consumers, software that helps these businesses comply with their state’s track-and-trace rules also offers menu displays, enables online ordering, facilitates delivery where allowed, and more. While some of these software offerings might one day converge, the unique functionality provided by each today is essential.
Once COVID-19 took hold, the script flipped. No longer seen as confusingly redundant and questionable expenses, these software stacks became viewed as lifesavers for retailers. Beginning in March, state regulation rapidly changed due to the pandemic, and dispensaries and retailers had to keep up. Their software helped them adjust seamlessly to the new rules, ensuring they experienced no major disruptions.
Cannabis Software Creates Profitability
Picture an entrepreneur opening a new cannabis dispensary in California and the software choices to be made before she opens her doors.
To start, she needs to have a point of sale, inventory management and auto-compliance software platform like Greenbits (the company I co-founded), which can hook into the track-and-trace system at the state level, which is Metrc in California. Next, the dispensary must be able to meet customers where they are on the internet and on mobile devices, so having an online menu software provider like Leafly or Weedmaps is key. In California, dispensaries are permitted to deliver cannabis products, so the entrepreneur might sign up for software to help process orders, such as Dutchie, and then another piece of software to facilitate deliveries, such as OnFleet. Dutchie also offers a kiosk function to retailers, allowing patients to digitally browse products once inside the dispensary, so that add-on might be necessary. This means one individual dispensary might subscribe to four or five services, some of which are partly redundant, before they’ve even opened their doors.
Yet, this tech proved to be a blessing in disguise during the current coronavirus crisis as individual states started enacting different policies to protect public health. For example, Colorado mandated curbside pickup for dispensaries to stay open, while Nevada only permitted delivery. Having this software in place meant the difference between staying open or shutting down because it allowed retailers to adjust instantaneously to the new regulations. In Colorado, a retailer could receive orders via Dutchie and bring them curbside to a consumer. In Nevada, retailers could use OnFleet to pivot to the delivery-only model. Legal cannabis sales continued and even increased in most legalized states at a time when people couldn’t enter a retailer.
Cannabis Tech Helped Workers to Stay at Home
Because of cannabis tech, most retail employees could mainly work remotely and safely during the state shutdowns. While employees were needed to receive shipments of product and to deliver them curbside, for the most part, employees could perform their jobs digitally, from managing inventory and expenses to complying with regulations.
Beyond helping businesses, tech also helped states to continue their oversight of retailers. One critical task of a state regulator licensing a new retailer is to conduct an inspection before allowing the business to open its doors. Anecdotally, I’ve heard inspections in Alaska occurred remotely through video conferencing software and Michigan signed an Executive Order permitting remote inspections.
A Dark Cloud’s Silver Lining
Amidst the pandemic’s economic wreckage, the legal cannabis industry has proven resilient. According to Greenbits, online ordering of cannabis from when the pandemic took hold in the middle of March through April 15 was up 278% in Washington, Arkansas, Oklahoma, California, and Massachusetts, and sales are up in nearly every state where cannabis is legal. Without sophisticated software to give retailers the adaptability they need, it would have been difficult to keep pace with the demand. And, without cannabis tech, the industry wouldn’t have had the ability to emerge as a silver lining around a dark economic cloud.