How Technology is Fueling the Prospect of the Cannabis Industry

The cannabis sector is primed for development due to made-to-measure technologies.

FREMONT, CA: Cannabis has risen from the shadows to become a major sector in less than two decades, gaining legal status in 16 states and Washington, D.C., as well as numerous overseas markets—a significant turning point for the entire market. This expansion creates economic opportunities and presents its own set of distinct obstacles. Numerous roadblocks are created by a complex regulatory framework and marketing constraints. However, the industry's most powerful driving force continues to overcome these developing pains: the customized technology that enables commercial enterprise.

Compared to traditional merchants, the cannabis sector is governed by a complicated web of state-by-state rules and a never-ending revolving door of municipal legislation. Cannabis retailers in the United States cannot just sell. They must confirm the buyer's identity and, if required, medical card, calculate local taxes, track each purchase, and report to regulatory organizations to validate and enforce possession limitations. Complying with the law is only half the battle—although a necessary half.

Canna-tech skills continue to expand

To effectively develop their businesses and the industry, retailers must do more than comply with regulatory requirements online. The sector has begun to see the value of technology in virtually every part of the organization, from inventory management and point-of-sale and delivery to customer relationship management and marketing automation. However, the critical word is begun. The legal cannabis industry is still in its infancy, and sales and marketing techniques are novel. Fortunately, canna-tech capabilities and use are rapidly expanding—maturing the business in the process.

As a federally restricted narcotic, purchasing cannabis online or with a credit card is problematic, which is why many dispensaries operate on a cash-only basis. Fortunately, technology has enabled workarounds that allow customers to explore and shop online yet pay in-person, amounting to $9 billion in annual sales. POS systems must handle the cannabis industry's unique online-offline distinction. Without these technologies, dispensaries would miss a significant amount of their online orders and would have few ways to collect revenue.

Collecting payments may appear straightforward compared to controlling inventory, which is a difficult task for cannabis items. The technology employed in more established, less regulated areas is incompatible with dispensary requirements. While a restaurant may offer 30 menu items, a dispensary may have 300 or even 3,000, necessitating extensive data attribution regarding strain kind, serving size, and ingredients.

For instance, edibles might have up to 134 distinct characteristics. This is challenging in an industry without a standardized data collection methodology. Additionally, dispensaries must manage fluctuating inventory levels and ensure stock accuracy across their menu offerings. This technology did not exist just a few years ago, and business owners were virtually flying blind regarding inventory management and enabling consumer experiences.

Prices and client needs are analyzed in real-time

Customers will flock if retailers build a dispensary. However, cannabis businesses must grow their customer base and gain repeat business to succeed. Due to cannabis's severe marketing limitations, standard marketing technologies cannot suit dispensaries. Improved cannabis-specific marketing automation and customer relationship management (CRM) systems enable business owners to target marketing campaigns to customers based on their preferences accurately. For instance, they can send a new product notification to customers who have already purchased related products. Real-time analytics on sales data enables price optimization and rapidly and accurately reveals customer insights. Fulfillment and delivery apps can reach a far larger audience and offer greater convenience to customers when ordering and receiving things.

The cannabis industry has gone a long way in the last two decades. However, the industry is still in its infancy. The significance of technology—adaptive technology—in the industry's performance will continue to grow in importance. As more states allow adult use, the technology used to market and identify cannabis merchants and brands must be adaptable and scalable, meeting consumers and companies wherever they are in the process. While the possibility of federal legalization is appealing, it will only complicate and tax the industry's business owners and consumers.