Interest in cannabis has increased over the past few months. A lot of people are becoming more aware and accepting to the use of cannabis. Legislation is being passed in most jurisdictions, allowing the use of cannabis for different purposes. With this in mind, the supply and demand dynamics for cannabis are bound to change. This is a product that has been widely used in many places, but mostly in secret. With relevant legislation and the fact that people can now use cannabis without worrying about getting on the wrong side of the law, demand spikes and the explosive growth brings challenges and opportunities for the supply chain.
Improved Retail Practices
If you have ever been in the wholesale-retail business, you understand the need to be at the top of your game when it comes to the supply chain economics. Customers have certain expectations that must be met, or they will move their business elsewhere. On the other hand, if you stock a lot of a product but it doesn’t move as fast as you expected it to, you will end up with insane losses.
The same applies to the cannabis market. In a short span, wholesalers and retailers have had to boost their supplies, given an insane demand for the product. Legalizing cannabis has seen the market net more than $8 billion in 2018 alone, and it’s expected that by the year 2023, the market should have surpassed $20 billion.
The explosion in demand is something that most suppliers would never have been able to prepare properly for. Technical supply chains for cannabis are yet to be available, so a lot of the retailers are spending lots of time placing wholesale orders. At the same time, the only way for such retailers to keep track of their supply is to get in touch with their operators and vendors frequently, making sure that things are running smoothly.
Room for Innovation
To make things easier, it’s important that the active players in the cannabis industry consider technological innovation in the supply chain system. This would see the adoption of online e-commerce tools, which make it easier to track sales and supply, and manage the supply chain so well that it responds adequately to consumer demand.
As time goes by, and with an increasing adoption of cannabis and relevant products, it’s expected that the demand will get higher. Companies are already setting up to produce some of the cannabis products that are used in areas like nutrition. Therefore, such companies will also drive up demand, compounding a problem that’s already existent in the retail customer market alone.
Well, since everyone seems to be benefitting from the cannabis business, the government must also find a way to share in on this piece of cake. As the order volumes increase, so does the potential for revenue collection through taxation. Whichever innovative options are available for cannabis users, wholesalers and retailers, they must also factor in the cause for intricate tax return filing.