The Cannabis Industry Needs a Data-Driven Mindset

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A data-driven mindset can help us rethink key decisions and improve processes.

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Working capital in cannabis is precious. Businesses are navigating between an endless array of hurdles, from limited fundraising opportunities to the lack of financial institutional backing to complex, state-specific compliance and regulations. While most of these are outside of an operator’s control, we found that inventory management — one of the largest consumers of working capital — is an area of opportunity for both retailers and brands.

Most sales reps for cannabis brands are incentivized to maximize order value. The larger the order, the better. This is because they don’t know the next time they’ll get an order and have limited visibility of the retailer’s actual sell-through. This translates to larger order sizes and conditioning the retailer to negotiate based on order size.

 

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