The Political Tide Continues to Turn for Cannabis

We are seeing an ever-growing number of signs that the political climate towards cannabis has reached a tipping point and that the legalization of cannabis on the federal level in the U.S. is only a matter of time.

A flurry of legislation has been introduced by Democrats and Republicans to end the federal ban on cannabis and ease the banking restrictions that have been imposed on cannabis companies by federal laws.

End Banking Roadblocks

In the latest news, the SAFE Banking Act was reintroduced, a bill that would enable banks to do business with legal state cannabis companies without fear of federal interference or criminal penalties.

The Secure And Fair Enforcement Banking Act of 2019 (SAFE) would stop federal banking regulators from being able to “prohibit, penalize, or otherwise discourage a depository institution from providing financial services to a cannabis-related legitimate business.”

End Cannabis Prohibition

On the same day that SAFE was reintroduced, two U.S. congressmen announced their plans to reintroduce two other cannabis measures—one that would end the federal ban on cannabis and one to study the effects of legalization nationally.

In a news conference that included cannabis activists, U.S. Reps. Tulsi Gabbard, a Hawaii Democrat, and Don Young, an Alaska Republican, announced they’re reintroducing The Ending Federal Marijuana Prohibition Act, which would remove cannabis from the list of federally controlled substances, along with The Marijuana Data Collection Act, which would study the impact of cannabis legalization across America.

A Call for Marijuana Justice  

The congressional bills follow on the heels of a similar bill reintroduced in the Senate by New Jersey Democrat Cory Booker. Called the Marijuana Justice Act, the bill also would remove marijuana from the Controlled Substances Act and enable banks to provide services to cannabis businesses without fear of criminal charges.

Another bill that has aroused hope for marijuana reform is the STATES Act, which would exempt states that have legalized cannabis programs from federal cannabis laws. The bill also would allow individual states to decide whether to legalize marijuana.

Cannabis Seen as Economy and Health Booster

Another positive sign pointing to national legalization of cannabis in the U.S. was a report released in December 2018 by Democrats on the Joint Economic Committee entitled “The National Cannabis Economy.” The report concludes that “the growth of the cannabis economy presents opportunities for greater job creation, more tax revenue, and better patient care.”

The report cites figures showing the cannabis market will reach $11 billion in sales in 2019 and $23 billion by 2022, with the industry employing more than 120,000 people. As more states move to legalize cannabis, says the report, these numbers will only continue to rise, potentially providing a new stream of revenue and jobs to local economies.

But to realize these benefits, says the report, “policymakers must address conflicts between state and federal regulations that impede the growth of the cannabis economy.”

DEA Doubles Down on Cannabis

Another sign of the growing acceptance of cannabis was the DEA’s announcement that it aims to raise the production quota of cannabis for research purposes from 2,500 pounds in 2018 to 5,400 pounds in 2019. The initial quota for 2018 was 978 pounds, so the new quota represents a substantial year-to-year increase.

More cannabis producers also will be able to participate in the DEA program. Up to now, only the University of Mississippi has been granted the legal right to produce cannabis for the DEA.

Many Positive Signs

As we noted previously, the attitude towards cannabis among politicians has been shifting as the cannabis market expands dramatically and local cannabis ventures bring jobs to communities across the country. More and more states are moving to legalize cannabis, and high-profile converts like John Boehner are helping to give impetus to the growing legalization movement.

The legalization of hemp, the FDA’s approval of the first cannabis-based drug, and the DEA’s reclassification of CBD used in FDA-approved drugs also are signs that cannabis has turned a corner and is heading for national legalization.

As cannabis businesses ramp up production and expand their footprints to meet the growing demand, these companies will benefit from an advanced cannabis management system like MaxQ Cannabis that can help them optimize operations while minimizing costs.

As the maker of the most modern, integrated, and scalable cannabis management solution, MaxQ has deep cannabis business expertise. Contact us to learn more about the latest trends in the cannabis industry. 

Read or new eBook, “Why the Right Cannabis Management Software Is Critical to Success!”


New Cannabis Markets: Show Us the Money!

A bevy of new territories began selling legal cannabis in 2018, including Canada, Massachusetts, Maryland, Ohio, and Oklahoma. How well these new markets are faring gives us a sense of the strength of the cannabis market and how closely actual results are meeting expectations.

Great Expectations for Canada  

As CNBC reported, when the country’s first recreational cannabis dispensaries opened on October 17, 2018, Canada became “the world’s largest legal marijuana marketplace.”

No official government tally is available for Canada’s first three months of legal cannabis sales, so it is not clear how well Canada has performed so far.

Statistics Canada projected sales would hit $1 billion in the fourth quarter of 2018 for the entire country. However, the only results provided by Statistics Canada so far are for the sales in the first two weeks after legalization, which totaled $43 million.

Vice, meanwhile, reported that Canadians spent $1.6 billion on legal cannabis in 2018, based on a report by Arcview Market Research and BDS Analytics.

Going forward, Arcview projects that Canada’s legal cannabis market will hit $7.8 billion in 2022. Recreational cannabis is expected to make up the lion’s share, with medical cannabis generating $1.4 billion of the total.

Deloitte projects that the total cannabis market in Canada, including medical and illegal as well as legal recreational products, will generate up to $7.17 billion in total sales in 2019. Legal sales are expected to contribute more than half of this total—up to $4.34 billion—in the first year.

According to Statistics Canada, Canadians spent $5.7 billion on cannabis in 2017, the vast majority of which came from the black market. This shows a strong demand for cannabis that will translate into large figures as consumers transition to the legal market.

Massachusetts Strong Out of the Gate

Massachusetts generated $23.8 million in recreational cannabis sales since its first dispensaries opened in November 2018, according to state officials. The number of dispensaries has increased from two to eight since sales began.

With only two dispensaries operating, the outlets totaled $9.3 million in recreational marijuana sales during the first four weeks of operation. The two dispensaries took in more than $440,000 on the first day of sales, and the state averaged $2.3 million in sales per week.

These are strong numbers compared with first month sales in other states that had many more dispensaries operating, such as Oregon ($14 million, 320 dispensaries), Colorado ($14.7 million, 59 dispensaries), and Nevada ($27.1 million, 53 dispensaries).

Maryland Med Market Soars

In its first year of operation, Maryland’s medical marijuana sales mushroomed to $96.3 million, according to state officials.

Medical cannabis sales in Maryland began in December 2017 with the opening of 10 dispensaries, and demand was so strong that supplies ran out within days. Since that time, the number of dispensaries has grown to 71.

Maryland’s first-year medical cannabis sales topped those of Illinois, Massachusetts, and New York combined. With about 52,000 registered patients at year’s end, Maryland also outpaced Illinois and New York, which each had fewer than 13,000 patients after one year of sales.

Oklahoma Posts Strong Med Sales  

Oklahoma, which legalized medical cannabis in June 2018, began selling plants in October and dried flower in December. In the first full month of operation, Oklahoma’s four dispensaries sold nearly $1 million worth of medical cannabis.

The Oklahoma market is projected to generate $400 million in annual sales over time, according to Marijuana Business Daily estimates.

Domino Effect

Legalization of recreational cannabis in Massachusetts seems to be spurring other New England states into action, including New York, New Jersey, and Connecticut. 

“Now that there’s cannabis stores in Massachusetts, we are really starting to see the dominoes fall,” said Matt Schweich, deputy director of the Marijuana Policy Project.

As mjbizdaily notes, recreational marijuana seems poised to sweep across the Northeast, which could mean billions of dollars of new business opportunities in the densely populated region.

Legalization Sweeping Across Europe

As ICBC reports, there are “fresh signs that wide-spread cannabis reform is afoot across the European Union.”  As the new year began, several European countries moved forward with their legal cannabis programs, including Poland, Portugal, and Luxembourg.

In Poland, medical marijuana supplied by Canada’s Aurora Cannabis went on sale in Polish pharmacies on January 17.

Luxembourg last year announced that it planned to legalize recreational cannabis, which would make it the first EU country to do so. Luxembourg currently is moving ahead with its medical cannabis program.

In Portugal, two bills have been introduced in the Parliament to legalize recreational cannabis.  As of January 15, the medical use law in Portugal, as well as the right to export the drug, was formalized by the Republic Journal, the official publication of the government documenting the passage of new laws.

Cultivation Craze

Another sign of the burgeoning cannabis market in new territories is the number of companies applying for cultivation licenses. In Germany, 79 bidders have applied for the 13 cultivation licenses that will be granted.

Only medical cannabis is legal in Germany, and until the first internal harvest occurs, which is expected in the last quarter of 2020, all medical cannabis flower and oil sold in Germany will continue to be imported.

In Canada, more than 800 new applications were in the pipeline, according to Health Canada.  There currently are 145 licensed cultivators, processors, and sellers in Canada. Beacon Securities analyst Russell Stanley says the Canadian market cannot support so many cannabis producers, which means “a reckoning is coming.”

Altacorp Capital predicts that cannabis cultivation companies will experience “margin compression” as the market matures. To combat this threat, cannabis producers must take measures to minimize their cost of operations. One of the best ways to control costs and maximize efficiency is through a highly integrated and automated cannabis management system.

As the maker of the most modern, integrated, and scalable cannabis manufacturing solution, MaxQ has deep cannabis industry expertise. Contact us to learn more about the latest trends and management solutions in the cannabis manufacturing industry. 

 


Cannabis Hits a Tipping Point and Crosses the Chasm

The cannabis market has reached a tipping point and is showing all the signs of an unstoppable juggernaut.

The signs are many, including:

  • Legalization is spreading at an accelerating pace.
  • The number of dispensaries is increasing exponentially.
  • Deals and investments are multiplying.
  • Big Alcohol, Big Tobacco, Big Finance, and Big Pharma have entered the market.
  • Big brand names like Coca Cola, Heineken, and Coors are entering the fray.
  • A vast new legal hemp market has sprung open.
  • A new generation of cannabis consumers is emerging.

Deals, Deals, Deals

As mjbizdaily reports, based on the number and size of the deals that were done, the year 2018 will go down as “a massive milestone for cannabis companies.” According to Viridian Capital Advisors, 557 deals raised over $13.5 billion in 2018, compared with 378 deals that raised $2.7 billion in 2017. 

Constellation Brands made waves with its $4 billion investment in Canopy Growth Corp. But Altria topped that deal with a $13 billion investment in vape company Juul, a deal that followed two weeks after Atria’s $1.8 billion investment in Cronos Group.

A key trend in the U.S. is the rapid expansion of large publicly traded cannabis companies through the establishment of multistate operations. This is the modus operandi of Acreage Holdings, Curaleaf, Green Thumb Industries, MedMen, and Trulieve—which are the five largest multistate cannabis operators with the greatest market capitalization.

Domino Effect

The big news in 2018 was the legalization of cannabis in Canada. In the U.S., Maine, Michigan, and Vermont legalized recreational cannabis. Medical cannabis is now legal in 33 states and Washington D.C., and recreational cannabis is legal in 10 states and Washington D.C.

As increasing numbers of territories legalize cannabis, resistance to legalizing cannabis is crumbling. At least seven U.S. states are leaning towards joining the recreational ranks as government leaders in New York, New Jersey, Connecticut, Pennsylvania, Ohio, Virginia, and New Hampshire push for legalization.  

Around the world, bans are being lifted to legalize cannabis and allow trade. Most recently, Bermuda announced that was lifting a regulatory ban on marijuana investment funds, while Israel’s parliament approved a law to permit exports of medical marijuana.

At year’s end, Thailand’s National Legislative Assembly voted to legalize medical marijuana and allow cannabis research. This follows on the heels of South Korea, Argentina, and Australia legalizing medical cannabis.

As Forbes notes, U.S. drug policies influence those of foreign nations, and the legalization of cannabis in the U.S. is having a contagious effect worldwide.  

Doubling Down on Dispensaries

The rapid expansion of the cannabis market is reflected in the exponentially multiplying number of dispensaries. Connecticut officials approved nine new medical cannabis dispensaries, which doubles the state’s existing number. New Jersey also doubled its number of medical cannabis dispensaries from 6 to 12.

Pennsylvania issued 23 new medical cannabis dispensary licenses, raising the state’s total to 79. Nevada issued 61 new recreational marijuana retail licenses, which nearly doubles that state’s number. Missouri plans to have 192 medical cannabis dispensaries open by 2020.

Michigan, which legalized recreational cannabis in 2018, approved 91 new medical cannabis licenses, including 45 dispensaries. Massachusetts opened its first recreational cannabis dispensaries, while the first medical cannabis dispensaries were licensed to open in Arkansas, Ohio, and Virginia.

Hemp Is Back

After an 81-year ban, the legalization of hemp in the U.S. became official when President Trump signed the 2018 Farm Bill on December 20. The ability to grow, process, and sell hemp products will unlock a wealth of new opportunities.

As Vox reported, not only will farmers coast to coast benefit from a new cash crop, but the CBD industry, which sold about $350 million worth of products last year, is projected to hit $1 billion in sales by 2020.  

Hemp becomes legal at a time when the demand for CBD oil is exploding. As Jason Williams of Wealth Daily notes, “CBD sales are growing faster than anyone could have predicted — faster than pretty much any other part of the cannabis market.”

And as Hemp Industry Daily reports, “CBD-rich hempseed is legal now, but it’s also rare, giving plant breeders a huge new market as barriers to national hempseed distribution are removed.”

Research Boom

Cannabis research is flourishing as biotech companies discover new medical uses and legal cannabis-based drugs are made available to patients. A historic landmark was reached in 2018 when Epidiolex was approved by the FDA, a move that caused cannabis to be reclassified by the DEA.

After five decades of barren neglect, the U.S. Congress is moving to fund and facilitate medical cannabis research. Besides a new Medical Cannabis Research Act bill, the U.S. federal government plans to award $1.5 million in grants during the 2019 fiscal year to researchers who study how components of marijuana other than THC affect pain.

Cannabis Crosses the Consumer Chasm

As the surging sales and supply shortages in the U.S. and Canada show, the demand for legal cannabis is strong. Consumers are taking advantage of the diverse medical and recreational cannabis products coming to market, including smokables, edibles, beverages, ointments, lotions, and suppositories.

Not only are veteran cannabis users taking advantage of legalized cannabis products, but a new generation of “canna-curious” people are becoming cannabis consumers.

As headynj.com notes, as legalization takes hold, “the doors have opened up to a whole new tribe of people” who are experimenting with cannabis and making informed decisions.  

This includes senior citizens, a group that tended to be anti-cannabis in the past, but who are now embracing cannabis chiefly for medical reasons.  An example is Rossmoor’s Medical Marijuana Education and Support Club in California, where scores of seniors are experiencing the benefits of medical cannabis. These seniors are not only becoming consumers, but pro-cannabis activists as well.

Helping consumers cross the cannabis chasm is Francis Ford Coppola, who has complemented his wine products by launching a cannabis line called The Grower’s Series. The first product is a kit that sells for $99, which is aimed at “individuals who are wine drinkers who may be intimidated by cannabis by leveraging some of the same language.”

Mainstream commercialization is causing the cannabis market to become more sophisticated, refined, and upscale. As Leafly notes, legalization has brought maturity, innovation, professionalism, and credibility to cannabis.

For cannabis producers, the expanding market represents an immense opportunity, and competitive advantages can be gained by deploying the right cannabis management and analytics solutions. 

As the maker of the most modern, integrated, and scalable cannabis manufacturing solution, MaxQ has deep cannabis industry expertise. Contact us to learn more about the latest trends and management solutions in the cannabis manufacturing industry. 

 

 

 

 

 

 


Cannabis Sparks a Beverage Revolution

The infusion of cannabis into beverages is transforming the beverage industry and consumers’ drinking habits. Consumers today can find THC and CBD infused into beers, wines, coffees, teas, sodas, waters, elixirs, and energy drinks. Wellness drinks, in particular, is a significant new category that is bringing  the health benefits of CBD to consumers. This first wave of cannabis drinks is only the beginning, as many of the big guns in the cannabis and beverage industries have set their sights on what promises to be a huge cannabis beverage market. Next Big Thing in Cannabis The first phase of legalized recreational cannabis in Canada did not include beverages and edibles. With the next phase set for the fall of 2019, the major Canadian cannabis producers are forging partnerships with beverage, bio-research, and alcohol companies to bring cannabis beverages to market. Among the big players is Canopy Growth, which made headlines as the recipient of a $4 billion investment from liquor giant Constellation Brands. Canopy CEO Bruce Linton believes cannabis beverages “represent the next big opportunity.” Edibles and infused beverages might have a wider appeal than smoking cannabis, Linton said, because consumers might consider eating and drinking the products to be more socially acceptable than smoking them. Likewise, Tilray CEO Brendan Kennedy believes beverages will ultimately dominate the cannabis market, with only 10% of cannabis being smoked and 90% being consumed as cannabis beverages. Cannabis Chemistry Although many players recognize the commercial potential of cannabis beverages, there are significant challenges involved in producing them. Because cannabinoids are fat soluble rather than water soluble, as beveragedaily notes, “beverage producers are left with the age-old problem of trying to mix oil and water when creating cannabis beverages.” Another problem with oil-based cannabis absorption is that the effects are not felt for 90 minutes or more, in contrast to alcoholic beverages that are absorbed quickly. Among the companies that are developing ways to make cannabis water soluble and more easily absorbable are Trait Biosciences, Vitality Biopharma, Lexaria Biosciences, Ascent Industries, Chemesis International, Tilray, Sproutly Canada, and Emerald Health Therapeutics. Ascent Industries CEO Philip Campbell said his company’s Agrima Botanticals subsidiary has developed a compound that can be added to drinks to make cannabinoids water soluble and quickly absorbable, with the effects felt in 15 minutes. Sproutly Canada announced that it has developed a portfolio of cannabis beverages based on its water-soluble MisT and Infuz2O cannabinoid technology. Among Lexaria’s innovations is a new water-soluble hemp powder called ChrD+ that comes in packets and can be added to any hot or cold drink to infuse hemp oil. The Green Organic Dutchman (TGOD), which created a global division to focus on the beverage industry, has forged an exclusive agreement with Stillwater Brands to license its RIPPLE SC (Soluble Cannabinoids) technology to create soluble and fast-acting cannabis beverages. Taste Appeal Besides solubility, the taste of cannabis can be a problem, with many people finding cannabis to have an unappealing skunky flavor. Thus, cannabis producers are partnering with biotech research companies to acquire the know-how to create more palatable cannabis beverages. Terpenes are cannabis components that impart flavors and mood enhancements to cannabis products, and research is being devoted to infusing terpenes into beverages. NaPro Research, Flowr, and Yofumo are among the companies developing techniques to isolate terpenes and breed cannabis strains with particular aromas and tastes. As Mashable reports, a number of brewing companies are adding cannabis terpenes to their beers to produce various flavor profiles. Lexaria Bioscience has developed delivery technology called DehydraTECH that can be used to infuse cannabis in food and beverages. The technology enhances the taste, smell, speed of action, and absorption. Lexia has introduced a line of cannabis-infused tea, coffee and hot chocolate products, as well as an energy drink. Expanding into Cannabis Territory Among the beverage companies expanding into the cannabis market is Lifford Wine & Spirits. Lisa Campbell, CEO of the company’s Lifford Cannabis Solutions subsidiary, said many cannabis companies are in talks with food and beverage manufacturers that want to extend their brands into the cannabis space. Campbell said her company was working with a number of partners—including WeedMD, TerrAscend Canada, and Token Naturals—to bring “premium infused products” to market as soon as Canada officially permits edibles and beverages. Token Naturals focuses on extracting and refining cannabis oils, and CEO Keenan Pascal said his company was working with food and drink manufacturers to design formulas to bring cannabis-infused products to market. Among Token Natural’s products are bitters for infusion into beverages. Cannabis Brews Studies show that cannabis sales are growing at the expense of alcohol in states in which cannabis becomes legal. To hedge against a decline in their revenues, major beer brands are launching non-alcoholic cannabis beer lines. New companies also are sprouting up to bring cannabis craft beers to market. Constellation Brands, the company behind Modelo and Corona beer, has tied its wagon to Canopy Growth Corp. through a $4 billion investment. Molson Coors followed suit by announcing a joint venture with The Hydropothecary Corporation to develop non-alcoholic cannabis-infused beverages for the Canadian market. Heineken created a subsidiary called Lagunitas and teamed up with AbsoluteXtracts to create cannabis-infused sparkling water beverages called Hi-Fi Hops that are being sold in California. Most recently, Budweiser maker AB InBev forged a $100 million deal with Tilray to research cannabis-infused beverages. Keith Villa, who invented Blue Moon beer for MillerCoors, has launched a new company called Ceria Beverages that will focus on producing a line of non-alcoholic cannabis-infused craft beers.  Villa has partnered with Ebbu, a cannabis company that will provide the extract for beers with or without the skunky cannabis taste. As Villa notes, “It’s tough to make good tasting non-alcoholic beer.” Also pioneering new beer brewing methods is Province Brands, which has developed a unique method of brewing beer from cannabis rather than barley or grain. The process involves milling and “mashing” to extract fermentable sugars from the cannabis plant, an operation that requires specialized equipment and technology that would not be found in a normal brewery. In November 2018, Province Brands announced agreements with Lost Craft Beer and Brock Street Brewing Company to brew beers from cannabis and hemp. Cannabis Goes Pop Coca Cola originally contained cocaine, which was replaced by caffeine, so it’s no large stretch to infuse soda pop with cannabis. Rumors are rampant that Coca Cola and Pepsi are planning to introduce cannabis beverages. Bloomberg reported that Coca Cola was “in serious talks” with Aurora Cannabis. Meanwhile, a new wave of companies is already fielding a variety of cannabis sodas, including Keef Brands, California Dreamin’, Cannabis Creations, Canna Cola, Dixie Brands, and Sprig. Erik Knutson, founder and CEO of cannabis-infused drink manufacturer Keef Brands, believes that “cannabis beverages are the new soda.” Keef produces a line of cannabis beverages, edibles, and additives that includes Keef Cola, Keef Sparkling Blood Orange, and Keef Sparkling Lemon. Cannabis Elixirs The cannabis boom has unleashed a wave of research aimed at discovering the medical benefits of cannabis. As Raphael Mechoulam, the father of cannabis research notes, cannabis is a “medicinal treasure trove waiting to be discovered.” Among those leading the charge is Mindful CEO Phillip Hague, who observes that marijuana contains numerous substances—cannabinoids, flavonoids, terpenes—that have never been investigated in depth. Mindful and other cannabis producers are cultivating CBD-rich strains of cannabis to help unlock the medical potential of cannabis. Lauren Rudick, a partner at cannabis-focused law firm Hiller, says CBD could become an even bigger mainstream ingredient than THC for the beverage industry. “It’s the perfect wellness product, and there are going to be many CBD-fortified foods and beverages,” she says. As consumer demand for CBD products rockets, companies like Lexaria, Zoots, High Performance Beverage Co., and Sprig are racing to create CBD formulas and bring CBD-infused health drinks to market. We are witnessing an incredible turnaround in which the once-forbidden cannabis plant is bringing entirely new types of beverages to market—beverages that are revolutionizing not only the beverage industry, but consumer health, drinking habits, and lifestyles. As the maker of the most modern, integrated, and scalable cannabis manufacturing solution, MaxQ has deep cannabis industry expertise. Contact us to learn more about the latest trends and management solutions in the cannabis manufacturing industry. 

Finally, a Cannabis Management System That Fits the Bill

After working with 10-15 different cannabis management systems, cannabis accounting specialist Andrew Hunzicker found the solutions were “filled with bugs, have had significant downtime, and have many features that simply don’t work.”

He found further that among the existing cannabis management solutions there was not one that was “reliable, effective, or efficient.”

Unfortunately, he concluded, “a reliable Cannabis ERP does not exist in 2018.”

At some point, Hunzicker said, he hoped a vendor would overcome these issues and provide an “all-in-one solution.” Until then, he said, “cannabis companies are forced to piecemeal together several systems.”

MaxQ to the Rescue

That was the case until MaxQ Cannabis entered the picture, providing an all-in-one ERP cannabis management solution with all the functionality Hunzicker hoped would someday become available. Although too new to be included in Hunzicker’s report, MaxQ Cannabis is now available to provide streamlined management to cannabis companies of all sizes.

Built on the Acumatica ERP platform, MaxQ Cannabis is a tightly integrated and highly automated cannabis management suite tailored to the needs of cannabis cultivation and manufacturing companies. With MaxQ Cannabis, all the problems with accounting, compliance, tracking, and reliability cited in the report are eliminated.

Goodbye QuickBooks

As Hunzicker notes, with no integrated accounting and tracking solution available, cannabis companies have had to rely on a patchwork of QuickBooks, Xero, Excel, and other apps to manage their operations.

MaxQ Cannabis solves this problem by providing integrated accounting functionality that encompasses the entire management suite, eliminating the need to employ two or more systems.

Rather than separate accounting, CRM, ERP, inventory, and e-commerce systems, MaxQ Cannabis provides an integrated suite of ERP, CRM, supply chain, and e-commerce functions.  All functionality—including accounting, cost tracking, product tracking, compliance, quality control, and business intelligence—are fully integrated across all phases of cultivation, manufacturing, distribution, and sales.

Automation Advantages

MaxQ Cannabis enables cannabis businesses to be more efficient through automation that saves time and labor, streamlines operations, and minimizes costs. For example, the process of entering a new cannabis strain into the system automatically creates all the associated parts—inventory IDs, bills of materials, kits, and bundles—at the press of a button. The automated process takes less than a minute, whereas it would take hours to input the data manually.

The same type of time and labor savings are gained through the automation of the lab testing process. MaxQ Cannabis automates the lab testing process by uploading the lab results and printing the labels for each cannabis product, a process that is time consuming when performed manually.

The system will store the Certificate of Acceptance (COA) and automatically generate labels from lab results. When products are shipped to customers, the lab results certificate will be mailed automatically with the invoice.

Compliance is ensured by automatically creating and transmitting regulatory reports to the appropriate government authorities, such as the Metrc reporting system.

Full-Spectrum Functionality

As Hunzicker points out, cannabis is a complex world involving several sub-industries (farming, chemical manufacturing, food production, and retail), and mistakes can be costly. Cannabis companies, he notes, are faced with a plethora issues such as multi-entity structures, consolidated accounting, cannabis and non-cannabis divisions, and complex customer resource management.

Providing a full spectrum of accounting and management capabilities—including multi-currency and multi-company—is how MaxQ Cannabis stands out from the pack.

No longer do cannabis companies have to settle for less-than-optimal management solutions. Now they can turn to MaxQ Cannabis, a next-generation cannabis management system with the unity of accounting, product tracking, cost tracking, compliance, quality control, and business intelligence that was missing in first-generation systems.

As the maker of the most modern, integrated, and scalable cannabis manufacturing solution, MaxQ has deep cannabis industry expertise. Contact us to learn more about the latest trends and management solutions in the cannabis manufacturing industry. 


A Heady but Wobbly Takeoff for Canadian Cannabis

After a big media buildup and much anticipation, recreational cannabis finally became legal in Canada.

The results out of the gate were mixed, with sales surging in some places, lagging in others, and supply shortages making it difficult for many Canadians to purchase legal cannabis.

One thing became clear: Canadians love cannabis.

Big Bang

The Ontario Cannabis Store (OCS), which sells online, reported making 100,000 sales within the first 24 hours, with sales rising to 150,000 orders within the first week. Shopify, whose e-commerce software powers a number of Canadian government cannabis retail sites, said the sites collectively were receiving more than 100 orders per minute.

The Canadian economy was the happy beneficiary of this frenzied activity. As Vice.com reported, “Canada made some serious cash on day one of legalization.”

The problem was that the outlets could not keep up with the demand.  As 420Intel reported, “many stores and provinces are completely out of product” and “some experts think it might take a year or longer before the country can supply enough weed to meet demand.”

Blame Game

With so many of the major cannabis growers being Canadian companies, people are finding it difficult to understand why there are shortages, and fingers are pointing in many directions to assign blame.

Provinces are the sole wholesalers of cannabis and cannabis products in Canada. According to reports, provinces say they cannot supply retailers because they are not receiving the supply they were promised from the licensed growers.

While some observers believe the cannabis growers are to blame for not producing enough cannabis, others believe it is the slow pace of Canadian government agencies to grant the licenses that permit growers to sell cannabis.

Carousel of Excuses

The government-run Ontario Cannabis Store (OCS) is the largest retailer in Canada and the only sales channel for legal marijuana sales in Ontario. The OCS initially blamed the delays in fulfilling orders on demand “beyond what we anticipated” and a postal labor dispute that disrupted its exclusive shipper, Canada Post.

However, OCS president Patrick Ford later sent customers a note saying that some of the items from licensed cannabis producers were “mislabeled” and “this delayed our ability to ship your order to you.”

Amateur Growers

In a report on Vice.com, Dan Sutton, founder of Tantalus Labs, said the production capability of many Canadian cannabis companies was overblown because the managers were business people who lacked the agricultural experience needed to grow cannabis on a large scale.

The institutional knowledge needed to reliably grow massive amounts of cannabis simply doesn’t exist, he said, and the industry won’t figure it out for a while.

Sutton said he did not believe there would be enough supply to meet demand for 18 months, which would “result in the collapse of some of these big companies on the stock market.”

Harvest Coming Soon

Jordan Sinclair, vice-president of communications for Canopy Growth Corp., disagreed with Sutton’s assessment.

Sinclair said the shortages were the result of larger than anticipated demand, logistical issues in getting product onto store shelves, and yields that are still a few months away from being harvested.

Canopy has been expanding its production capability over the past year, but it will be a few more months before the facilities are in full production mode, he said.

Robbing Peter to Pay Paul

Rosalie Wyonch, an analyst with C.D. Howe Institute, said she believed there was plenty of blame to go around and that “no one is completely guilty, and no one is completely innocent.” Licensed producers failed to deliver enough cannabis, provinces failed to procure enough cannabis, and the Canadian government via Health Canada may not have approved enough LP licenses in time for legalization.

Wyoch also said legal producers were short on medical cannabis because they were routing deliveries to meet their obligation for recreational cannabis.

“The truth is, there’s a huge incentive for licensed providers to supply distributors before they supply medical patients, and as a result these medical patients are getting the short end of the stick,” she said.

A Little Perspective

Taking a step back, we can see that even with the shortages, Canada is doing a lot better than other places in which recreational cannabis became legal. In California, for example, there was no cannabis available for an entire year after legalization became official, and cannabis dispensaries are still spotty throughout the state.

In Massachusetts, recreational marijuana was legalized in November 2016, but sales are not expected to begin until this month, a full two years after legalization and four months after the July 1 target date this past summer.

Future Looks Bright

Despite the shortages, the strong demand for cannabis signals a bright future for the cannabis market in Canada. With so many major Canadian cannabis companies focused on producing large quantities of premium cannabis, consumers will be well served in the near future.

Cam Battley, Chief Corporate Officer at Aurora Cannabis, is among the bullish believers, noting that even though some cannabis companies might have stumbled getting their products to the provinces, the fact that there was such high demand was a good thing. Customers will be pleased with the high-quality cannabis that will be available to them, he said.

As we noted in a previous post, major Canadian cannabis companies like Aurora, Canopy Growth Corp., The Green Organic Dutchman, and Tilray are looking beyond Canada and making moves to become leading providers worldwide.

As the Financial Post reports, a new report from the Bank of Montreal projects a worldwide cannabis market of $194 billion in 2025. The report pegs the total Canadian cannabis market at $5.9 billion. Based on these projections, says the Financial Post, “the potential of the global cannabis industry is so vast that it could eventually make the sky-high valuations of some Canadian licensed producers look like bargains.”

As the maker of the most modern, integrated, and scalable cannabis manufacturing solution, MaxQ has deep cannabis industry expertise. Contact us to learn more about the latest trends and management solutions in the cannabis manufacturing industry.