National consulting firm NexTec Group has over 25 years of experience offering tailored business management solutions to various industries, and one of their latest bespoke products was designed with the cannabis industry in mind. The CannaBusiness ERP brings expansive organizational software to cultivators throughout the market, supporting businesses in their pursuit of higher profit, lower overhead, and better products for retailers and consumers alike.
We sat down with NexTec’s Senior Marketing Manager Dan Wu to discuss the importance of cannabis enterprise resource planning (ERP), how NexTec first developed their winning product, and how focusing on finances is just the start when it comes to boosting business.
Leafwire: How was CannaBusiness ERP first developed?
Dan Wu: The CannaBusiness ERP product was developed as a way to consolidate our efforts in the cannabis industry, which we began to pay closer attention to in 2017. At the time, we were having a lot of success with modifying our ERP products to suit specific manufacturing processes, which we’d been developing with the food industry in mind.
Around the same time, cannabis legalization began to spread, and growers, distributors, and dispensaries were coming together to form conglomerates and MSOs. We realized the industry was lacking a specific solution for enterprise resourcing and planning, and we saw our product as a perfect fit.
LW: Why is that?
DW: Cannabis and food share similarities and challenges. Crops and livestock all undergo growth, harvest, packaging, and distribution, and the FDA regulations they’re required to follow are not unlike cannabis’s rigorous and ever-changing compliance requirements. It’s very similar to cannabis’s seed-to-sale journey.
Once we realized that our product fit well in the cannabis industry, we began to modify it even further to really suit the market. We included a lot of additional resources that customize the product to deal with those differences in regulations—any hurdles that are specific to cannabis MSOs.
LW: What benefits does the ERP bring to the industry?
DW: A lot of cannabis companies we work with are still fairly young. The industry is still going through a growth phase, and a lot of companies have just recently been funded. When you’re a business owner in the process of being purchased by private equity—or you’re seeking investors—your finances and transactions need to be totally transparent to potential investors and stakeholders.
Most of the time, if you don’t have some sort of financial tool similar to what we offer, you aren’t able to keep accurate track of every expenditure, every product that’s come in, the cost of your distribution, etc.—and that process alone can require a team of 10-15 people.
ERPs help you get a better hold of your financial future without having to spend a fortune on additional labor. The tool grants you financial visibility, which also helps you predict your income and forecast expenditures. MSOs have a lot of moving parts throughout the seed-to-sale journey; an ERP tool can automate much of that for a business, making everything more streamlined and transparent for everyone involved.
LW: So, do all of the ERP’s benefits revolve around financial planning?
DW: No. That’s what the ERP is the backbone for, but there are a lot of different functionalities that can be plugged into the software. Its basis is financial solutions, but you can also include a warehouse management tool, a logistics tool, crop forecasting, etc. The more functionalities you add, the easier it will be for your business to work together and understand what’s going on throughout the supply chain.
LW: How has your software played a hand in innovating cannabis cultivation?
DW: As a grower, you want your yield to be as efficient as possible. You don’t want a lot of crops to go to waste, and you definitely don’t want your product sitting on shelves for an extended period of time.
Let’s put it this way: the word “planning” is in “ERP” for a reason. Our product allows your organization to be able to map out your yield according to your projected forecast for revenue and sales. We’re giving you a tool to see the future clearly—or, at least responsibly prepare for it.
LW: What should cultivators keep in mind when considering ERP software?
DW: If you’re big enough to look for an ERP, you should already be looking forward to your future. There are multiple ERP solutions available to the market; when you’re making your decision, look at the longevity of the company and product. You don’t want to go with someone who cobbled together some poor code for a cheap solution.
You should also look for products that understand your company and aren’t afraid to work with the cannabis industry. Larger ERP solutions might look fantastic on the surface, but the bigger companies might shy away from cannabis. That’s something for MSOs to be cognizant of. Go with companies that have software that was designed for the industry—and to take it a step further, go with companies who are willing to stand behind the industry and update their software to evolve with regulation changes, which are always something to keep in mind.
LW: What’s on the horizon for CannaBusiness ERP and NexTec?
DW: We typically do a quarterly release for our products, where changes are pushed out to everyone who is on license via cloud.
We recently added waste management and waste control to the ERP, and we’re looking to add features and functions designed to deal specifically with the packaging and distribution of products.