5 Reasons To Hire A Third-Party Supply Chain

4 min read

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Bringing legalized cannabis to market might seem fairly uncomplicated; after all, it's just one plant that needs to be grown and packaged into a product. However, there are many complications that can arise along the way, especially in an emerging industry with ever-changing regulations. For this reason, companies with the strongest supply chain will win the race to market and confidently maintain a dominant position in a highly lucrative market.

The industry suffers from significant startup supply chain challenges, with many companies attempting to vertically integrate every part of the seed-to-sale process, essentially becoming a one-stop-cannabis-shop. Unfortunately, many businesses compromise both quality and supply by doing this due to lack of a proper infrastructure to execute this business strategy.

Below are five reasons why partnering with a reliable third-party supply chain management company is a smart and obvious way to ensure measurable benefits, while propelling a cannabis brand towards market dominance.

Ensure Consistency

If a company doesn't have a consistent product, it doesn't have a brand. And if it doesn't have a brand, it won't win over or maintain a significant share of the market.

Just as pharmaceutical companies tightly control each stage of production, cannabis companies should also have full oversight of its supply chain. Companies must closely monitor the growth, cultivation, extraction, manufacturing, packaging and distribution of its products, which ensures products are consistent and consumers know exactly what they are getting.

Scale Effortlessly

A strong third-party supply chain can help a cannabis company scale operations, which help structure costs. Supply chain management companies bring efficiency, negotiation skills and logistics expertise, which are critical elements for any rapidly growing company.

In addition, hiring a third-party frees up resources to invest in machinery and technology, meaning a company doesn't have to retrofit its manufacturing operations as it grows and scales.

Implement Rigorous Quality Control

The legal cannabis industry faces a unique obstacle in order to reinvent and educate the market from a decades-long negative perception. Due to uncontrolled federal legistation, there is no standard for quality control, which results in, potentially, dangerous or illicit products being sold. Even with regulations in place for most states, testing of cannabis is erratic and there are no uniform standards, leaving each company to create its own guidelines.

A third-party supply chain company can provide quality control with a defined standard operating procedure that includes streamlined processes and automation, helping establish a clear path for businesses to use as a blueprint.

Benefit From An Experienced Management Team

The legal cannabis industry is still in its infancy, meaning companies are learning on the fly about how to manage supply chains, while budgeting for how to spend on talent. A third-party management company allows cannabis companies to access an experienced network, capable of consulting on high-level strategy. While scaling cannabis companies certainly want to keep costs down, investing in a management team will reap significant organizational and financial rewards.

Comply With Regulations

As mentioned above, the cannabis industry has ever-changing regulations, many of which can be difficult for new businesses to comply with. With the help of a third-party supply chain manager, companies can maintain quality control standards, while also getting ahead for any potential federal legalization testing by the FDA, USDA and others.

Partnering with a third-party supply chain management company gives cannabis companies the ability to scale securely, deliver on brand promises, remain compliant, and capture greater market share. As the industry continues to evolve, it's important to stay compliant and ahead of the curve.