Updated: Dec 13, 2020
If you are seated on a board of directors in the Cannabis space, then I'll assume you've asked the question "Well, how do we get Walmart?".
Let me rephrase this last sentence, if you are seated on a board of directors in the Industrial Cannabis space, then I'll assume you've asked the question "Well, how do we get Walmart?". It's a strong question, a question that has been asked by some of the strongest groups in the CBD Cannabis space since the 2018 Farm Bill was passed, which allowed once again for the production of and manufacturing* of Industrial Hemp / Cannabis [specifically CBD or Cannabidiol] products in the United States. So what's the answer? Where is Walmart, and why aren’t they knocking down your door?
You’ve hired accordingly, you have the Greek God/dess that knows how to control a showroom floor, you have the “Marketing” expert that keeps coming up with new and exciting ways to only maintain the status quo (that you had hoped might change as people become more educated on the good your company was doing due to the team you had put together). You’ve hired the best SEO team (for whatever that means). You've hired that "in touch" millennial that knows how to get 100K bots…I mean "humans" that now follow you on Instatwitter. You dropped too much on that extraction salary (that you still aren’t quite sure why) and after 2+ years and the oils you are producing do not seem to be any different than when you first started which makes you wonder why you also have an “R&D Specialist” on your payroll. You've been blogging, not to mention the mail chimp campaigns. And you cannot forget that one manager that came with an intimidating resume, even though he just graduated from CU Boulder in the summer of 2019. So again, you ask yourself, WHERE IS WALMART?!
Why did you take on the A-Share investor(s) that were required in order to supply the salaries required for the absorbent payroll listed above, if Walmart isn’t going to call and request a sit-down?
And then one night, suffering from an anxiety attack that seems to have stemmed from the predicament that you currently find yourself in, something makes your fingers type “Supply Chain Management in the Cannabis Space” into the old Google search bar.
Nothing but blog posts and startup companies pop up, which is strange, because you cannot be the first person to realize that Cannabis (Industrial and Medical) is well on its way to becoming just a normal global commodity, and with all global commodities, they require a global supply chain management team to endorse your product prior to a Walmart picking it up to place on their shelves. But again, you begin to wonder, why aren’t there any Titans of Industry that are focusing on Supply Chain Management for the Cannabis Space? Is it still too risky? Has the intrigue of Cannabis not reached the desks of the major commodity desks? I mean, Cannabis has never caused an auto accident (though the author of this post still finds a sinister motive behind a statistic such as this), there has never been a documented “addiction” for the Cannabis Sativa plant (again, the author finds this claim suspect as well). Cannabis can apparently cure both “Cancer” and “Covid-19” though the FDA has failed to endorse such a claim.
We’ve all had a great aunt that was living on the wild side and decided she wasn’t going to ask permission from her Husband or Doctor, and she was going to find a cure for her arthritis naturally, who turned to an Endocannabinoid Booster Tincture and BAAM no more crippling pain!
We’ve all seen what a low dosage CBD Endo-Pet Booster CAN do for that Weimaraner that suffers from crippling painful panic attacks [maybe more so "crippling" for the owners] whenever they BLINK and become overcome with FEAR that their owner has DIED in that half of a second of eye closure.
But again, you ask yourself, why are there no major global supply chain managers stepping up to back your brand in front of Katie at Walmart?
There’s a simple answer, you may not believe it, but it really is quite simple – “Reputational Risk”!
What is “Reputational Risk” you might be asking yourself? Well, great question, that one’s quite easy as well, reputational risk is what major Box Stores and downstream buyers have to assume whenever they are dabbling in the unknown and I assure you, no matter how many times Cannabis has cured AIDS or COVID-19 or LYME Disease, or CANCER, those claims have yet to be backed by a credible source that is accepted globally (now before you start shooting steam out of your ears, I AGREE WITH YOU 100%).
I HAVE SEEN WHAT MIRACLES THIS DRUG CAN PRODUCE, but it is a DRUG and it needs to be treated like every other drug globally, and that means clinical trials, clinical trials that rely upon APIs [if you’ve made it this far into this blog then I can only assume that you know what an API is – if not, think Ingredient in a medication, or think one step farther, and think Active Pharmaceutical Ingredient, or API] and that’s almost impossible because of the "anti-Pharma" stance solidifying the Cannabis Movement. Most of us do not want to play by BIG Pharma’s rules and we have all become quite comfortable on our soapbox spouting off the power of the Entourage Effect!
BIG PHARMA believes in single molecular forms when creating medicines, and the FOOD AND DRUG ADMINISTRATION is even keener on this ideology because it has worked for them over the years. But, we [Cannabis Industry] have been traditionally made up of outlaws, entrepreneurs, and enthusiasts [try not to put a negative connotation on this statement, I'm trying to speak lightheartedly on our backgrounds] and we are not fond of being told what to do because we have FACEBOOK to push our message to the masses! But seriously, phase 1 [Cannabis 1.0] is coming to an end and we are going to have to start looking at this industry from new eyes, well, at least some of us should, I know my customers would love to have the stereotypes removed so they can help the ones they love [that have only heard the negative stereotypes of "marijuana" and getting "high"].
Sorry, I really did just scream from a soapbox and I apologize, like you, I believe in the incredible power of this drug Cannabis, but I am a part of a minority that does believe that cannabis can have a negative influence on people’s lives when abused, and it does most certainly cause auto accidents because people have at one time or another found themselves lost in a Trey riff while driving their TESLA on Autopilot on I-90 only to remember that your 1997 Tacoma doesn’t come equipped with a suite of advanced driver-assistance system that is so often featured on many of Elon Musk’s TESLAs and BAAM! All of a sudden you find yourself walking down a side road with your steering wheel towards what Siri is claiming to be the nearest “Baskin Robbins” for a 32 flavor sampler in hopes of avoiding the police that is most certainly on the scene by now.
But again, I digress, we were talking about “Reputational Risk” and how “Reputational Risk” affects the buying power of some of the largest corporations across the globe. Let us assume that a board of directors purpose is to ensure the company's prosperity by collectively directing the company's affairs while meeting the appropriate interests of its shareholders and relevant stakeholders, and you meet the appropriate interests of the shareholders and relevant stakeholders by managing the reputation of both the board and the company by making intelligent decisions that positively impact the overall wealth of the corporation. So, where do cannabis and your brand fit into that “positive” impact? Well, it doesn’t. It doesn’t and it won't because the board of directors does not consider your Social Media an expert, nor are they fooled by the resume of your 2019 CU Boulder Graduate. They care very little about the Director of Extraction, less so that is, than the Extraction equipment that is capable of becoming GMP Compliant (and let's be honest, 9 times out of 10, most “Extraction Equipment Manufacturers” do not apply universally accepted normative standards for engineering when developing their prototypes, let alone take into consideration a need for peer reviews and standards that ensure both safety and compliance in a globally dictated arena called Global Manufacturing Practices (or GMP to the expert). Again, you find yourself asking, “what did I get myself into?”
Here is the great news, you are one step closer to meeting the demands of Walmart, you just need to Google the right search words, and I suggest trying “Supply Chain Management for Colombian Coffee” or “Bananas” or any other global commodity and you are sure to come up with groups like Peterson or Control Union. Do yourself a favor and ask for more information on their website. Educate yourself on what the global downstream buyers are looking for in a Value Chain – the chances are much better that groups like these will be better versed at helping your brand, considering they manage supply chains for all of the buyers you are looking to attract.
Can “Canna Supply Chain Management” out of Denver Colorado introduce to a Pepsi Co., or a Walmart, or a Coca-Cola? They might be able to via Instagram [at least get you in contact with the summer intern that is responsible for a C-Level executives feed], but can they pick up the phone and call direct? Probably not. So, then what?
Well, here is some key function in any global Supply Chain Management System:
You will have to align flows (sound easy right?),
You will have to integrate functions within your organization (again, this is easy enough, I’m sure that 2019 super-grad can handle this one),
You will have to coordinate your processes,
There needs to be a complex design of your core systems, and last but not least
You will have to manage your resources.
Here is the great news, you are one step closer to meeting the demands of Walmart, you just need to Google the right search words, and I suggest trying “Supply Chain Management for Colombian Coffee” or “Bananas” or any other global commodity and you are sure to come up with groups like Peterson or Control Union. Do yourself a favor and ask for more information on their website? Educate yourself on what the global downstream buyers are looking for in a Value Chain – the chances are much better that groups like these will be better versed considering they manage the supply chains for all of the buyers you are looking to attract. Can “Canna Supply Chain Management” out of Denver Colorado introduce to a Pepsi Co., or a Walmart, or a Coca-Cola? They might be able to via Instagram [at least get you in contact with the summer intern that is responsible for a C-Level executives feed], but can they pick up the phone and call direct? Probably not. So, then what?
Standards are not unique to any particular sector involved in global trade, they have been trusted and adhered to for decades throughout the global commodities world because they work, so why not allow them to work for your Cannabis brand? Standards create systems of trust for downstream buyers, market participants, and investors, essentially a standard is a glue that ensures the global supply chain works together all while managing normative behaviors that must be practically applied to individual regions.
Here is a solid hint, start with a planning portion. Establishing the objectives your organization is looking to establish. Look at risks and opportunities associated with your action items, and plan for changes because the pivot is as necessary to deliver results in accordance with customer requirements and the organization’s policies as the reputational risk we talked about earlier [you may have mountains of data and 1 million Instagram “likes” but that does not mean you are correct in the eyes of the shareholders/stakeholders]. Your organization will have to take into account the context of your shareholders if you are wanting to play on the global stage, not to mention the needs and expectations of both the internal and external customers (while including all statutory and regulatory requirements that are applicable to the product, service or application to ensure its safe and proper intended use to the customer or end-user).
So let me ask you this?
Does your cannabis-centric supply chain management “firm” know how to include all interested parties, their role(s), and the inputs required of them in order to properly plan a global value chain in cannabis?
Starting with just these objectives and processes, you now better understand why a global cannabis supply chain has to be implemented and managed by a team with global reach if you are hoping to pique the interests of Walmart. Your brand should be looking at teams with multinational expertise that includes fields beyond just cannabis cultivation, standards and programs like CUMCS, Global-GAP, EU-GMP, GACP are just the tip of the iceberg when it comes to a successful value chain bid in Global Cannabis. While some standards are built through improvement programs and are subject to objectives, targets, and management programs, most are controlled through operational control procedures that have been managed by specialists for hundreds of years. While I value the underdog's competitive attitude towards an emerging marketplace, I place a higher value on the trust that has been established for years, decades, and possibly even millennium. I would trust the company that has Walmart, Coca-Cola, Pepsi Co., Dole, etc. in their portfolio to bring you to that next level, but I still love the competitive nature of the entrepreneur to pull a rabbit out of a hat!