Anyone launching a cannabis business knows it's important to build a comprehensive risk management strategy to handle all the threats they face - especially considering that cannabis is still illegal on the federal level.
Navigating the very complicated supply chain of cannabis requires balancing modern seed-to-sale tracking technologies and many other spinning plates, especially when companies don't have the proper insurance for their cannabis business.
.jpg?width=2254&height=400&name=Free%20Insights%20(1).jpg)
The right cannabis insurance company will be invested in growing your business and securing it through risk management.
5 Risk Management Techniques to Scale Quickly
As the cannabis industry continues to grow rapidly, companies in this space are looking for ways to scale quickly while minimizing risk.
1. Spot-On Compliance
Compliance must be the top priority for cannabis firms that are trying to grow quickly.
According to Emily Paxhia, a subject matter expert in the marijuana industry, "Compliance should be the cornerstone of every cannabis firm. Without it, you run the danger of being fined or shut down, which can be very expensive and bad for your reputation."
Cannabis businesses must work closely with regulators and keep up with all applicable rules and legislation to stay compliant. This involves obtaining the necessary licenses and permissions, followed by strict quality control requirements. Companies must also ensure that all staff members have received training, including to handle the safety and compliance demands of the industry.
2. Investing in Technology
As Chris Walsh, MJBizDaily's CEO, said, "Technology can revolutionize the cultivation of marijuana by enabling growers to produce more products with higher quality and better yield."
Technology and automation are effective tools for cannabis businesses to utilize as part of their growth strategy. Cannabis businesses are streamlining their processes and reducing the possibility of human mistakes by investing in cutting-edge software and hardware solutions.
Technology helps cannabis firms monitor and trace their products through the supply chain.
Monitoring the supply chain is even more important in the cannabis business, where stringent and complicated regulatory regulations exist.
By employing modern tracing software, companies guarantee that their items are correctly labeled, kept, and transported as per state rules - helping them stay out of trouble on compliance.
Remember: A protected business is a financially healthy business!
3. Securing Facilities and Data
Another crucial factor for cannabis businesses trying to expand fast is security. Cannabis companies' products and data are at risk, so businesses must stay cautious in safeguarding their assets.
Preventive security measures cover everything, from cybersecurity safeguards like antivirus programs and encryption to physical security safeguards like CCTV and alarms.
Cannabis businesses can collaborate with security professionals and invest in cutting edge security technology to guarantee the safety of their premises and data. This can be anything from sophisticated cybersecurity software to biometric access to all sensitive facilities.
4. Including Risk Management In Routine
Cannabis company leaders are preoccupied with running and expanding their businesses and may not have the time or resources to deal with risk management on their own.
Cannabis risk management can be integrated into routine procedures and does not need to operate as a separate program. Documentation and collaboration are great techniques for integrating risk management.
Let's take an example of information management to explain this kind of integration.
Manufacturer of cannabis Company X learns that its gross profit is low because it is not pricing its products correctly. This happened because the head of the company’s finance department did not account for all direct and indirect costs. The problem is later solved when the head of finance resolves the errors and routinely establishes a system to examine expenses and spot information gaps.
5. Staying Flexible and Adaptable
Finally, cannabis businesses that want to grow rapidly must stay prepared to shift direction promptly if market conditions change. This means staying updated with the cannabis market and being prepared to modify strategy as necessary.
In a nutshell, cannabis firms can use a variety of risk management techniques to expand while lowering their risk exposure. These businesses position themselves for success in a fast-paced and captivating market by emphasizing compliance, technology, security, collaboration, and flexibility.
Isaac Bock is the managing director of AlphaRoot.
