Boost Your Cannabis Business Profit Margins with ERP Systems
Tight profit margins are a reality in the cannabis industry—making operational efficiency a critical factor for success.. Federal tax burdens, market price compression, and fierce competition require businesses to maximize every resource to stay competitive and profitable..
Here’s how Cannabis Industry ERP Systems help:
✅ Precise Inventory Management: Reduce waste with detailed seed-to-sale tracking.
✅ Efficient Production Scheduling: Align production with demand to cut unnecessary costs.
✅ Streamlined Operations: Automate processes like SOPs and employee time tracking for maximum efficiency.
✅ Equipment Optimization: Monitor machine performance to minimize downtime.
✅ Compliance Confidence: Stay audit-ready while simplifying regulatory requirements.
ERP systems are transforming cannabis operations by streamlining processes and helping businesses make data-driven decisions to improve efficiency and profitability.
How Cannabis Industry ERP Systems Boost Profit Margins through Effective Resource Planning
Profit margins in the cannabis industry are notoriously slim—which makes efficiency a top priority for operators. Whether in emerging markets like Missouri and Ohio or established markets like Colorado and California, operators face pressure from federal tax code 280E and market price compression, as well as competition from other regulated and legacy operators.
Enterprise resource planning (ERP) tools have long been a cornerstone of back-office operations across industries with roots in older methods like Material Requirement Planning (MRP) and Manufacturing Resource Planning (MRP II). Since the 1990s, these tools have evolved alongside advancements in computing, offering businesses comprehensive solutions for forecasting, operational streamlining, and data-driven decision making across critical areas such as human resources, equipment management, standard operating procedures and inventory.
That said, ERP software systems are particularly valuable due to the unique challenges posed by tight regulations and slim profits in the cannabis industry. ERPs serve as a critical record-keeping tool, ensuring business maintain accurate and organized documentation for operational compliance. This becomes important during events such as recalls or audits, where quick access to detailed and accurate records can protect the business from penalties or reputational damage.
So how can cannabis operators effectively maximize profit margins? Here’s a closer look.
Cannabis Industry ERP Systems and Effective Resource Planning
Implementing Figgro’s cannabis industry ERP system can significantly enhance profit margins for plant-touching businesses through the following mechanisms:
- Comprehensive Inventory Management: The Figgro platform provides seed-to-sale product tracking for cultivators, manufacturers and retailers that aligns with the metrics sought by cannabis regulatory systems. Seed-to-sale systems like Metrc and BioTrack are used by state regulators to monitor the cannabis supply chain. That track-and-trace capability does more than just keep cannabis operators compliant, however. It can be invaluable for effective resource planning and supply chain management.
Figgro’s ERP system offers detailed insights into inventory lots, enabling operators to track purchase dates, quantities received, current stock levels, and associated purchase order numbers. This precise tracking minimizes overstocking and stockouts, reducing holding costs and waste.
- Production Scheduling and Tracking: A quality cannabis industry ERP system facilitates efficient production scheduling by providing insights into inventory levels, batch production jobs, and sales orders. This ensures that production aligns with demand, optimizing resource utilization and reducing unnecessary labor and operational expenses.
- Bills of Material (BOM) Management: Operators can gain an in-depth understanding of all production components, including raw materials, semi-finished products, and ingredients. The Figgro ERP platform allows for the definition of fixed and variable labor costs, including consumables, enabling precise cost management and more accurate pricing strategies.
- Templates for Standard Operating Procedures (SOPs): Figgro provides “done for you” formula-based manufacturing process templates, allowing operators to automate lab processes from biomass extraction to downstream refining. This standardization enhances operational efficiency and product consistency, leading to cost savings and consistent product quality.
- Employee Time Tracking: The Figgro ERP system includes an employee time tracker with clock-in and clock-out features, syncing data with third-party accounting platforms like QuickBooks. This functionality provides detailed reports on employee productivity, enabling better understanding and management of labor costs, which can be some of the largest expenditures for cannabis operators.
- Machine Effectiveness Monitoring: Cannabis operators can also monitor the overall effectiveness of their manufacturing equipment and processes, including production hours and downtime. This data helps in maintaining optimal machine performance, reducing stoppages and ensuring efficient use of equipment, thereby lowering operational costs.
- Toll Processing Management: A cannabis industry ERP system like Figgro also allows for tracking and tracing of toll processing deals, including the nature of these deals and any ensuing revenue or inventory splits. This transparency ensures accurate revenue sharing and inventory management, contributing to better financial outcomes.
Figgro’s ERP system streamlines operations, enhances efficiency and provides detailed insights into various cost components. This comprehensive approach for all aspects of the cannabis industry—cultivation, manufacturing and retail—enables operators to make informed decisions, optimize resource utilization and ultimately maximize profit margins.Ready to elevate your profit margins and compliance? Contact us today to learn how Figgro’s cannabis industry ERP system optimizes business operations.
