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The Success of the Legal Cannabis Ecosystem Relies on This

Increasing the power of businesses, governments, patients, and consumers to make smart, safe decisions.

Opinions expressed by Entrepreneur contributors are their own.

Whether we realize it or not, our everyday needs depend on a complex infrastructure of multiple supply chains. Virtually every product we purchase, from any industry, is the result of a sequence of production and distribution processes.

Think back to when the Covid-19 pandemic first caused closures and major shutdowns. Toilet paper was flying off the shelves like it was a hot new electronic on Black Friday. Although TP brands and distributors were aware of the shortages, they couldn't keep up with demand and struggled with new safety protocols enacted in warehouses and production spaces. Armed with insights into their full supply chain, they were able to pinpoint the problematic areas, and implemented solutions to remedy the identified issues. Now, we all have toilet paper again!

But not all supply chains have adequate transparency, and a lack of insight leads to problems with production, distribution, and even consumer safety. A few years ago, a romaine lettuce E. coli outbreak caused hundreds of consumers to get sick, and it took weeks before the FDA was able to identify the source of the contamination. Even after identifying the source, they were never able to fully confirm the exact farm or batch the tainted product came from. If the producers were using a similar solution to the cannabis industry’s integrated seed-to-sale supply chain technology, it would have allowed regulators to quickly identify the exact source of the contaminated batches and remove them from distribution.

When it comes to products that people are putting in and on their bodies, strict supply chain technologies are necessary to establish the safety and accuracy of the commodities. Consumers are becoming increasingly concerned about the efficacy and safety of what they are using and ingesting, prompting more industries to provide additional transparency to the production and distribution of their products.

Employing dedicated software can make all the difference. Technology makes supply chain management more efficient, accountable, and cost-effective, benefiting both the producers and the end consumer.

Connected data proves cannabis compliance

When it comes to the cannabis industry, supply chain technology is crucial.

Cannabis has a complicated legal history. It has long been classified as a Schedule I drug by the DEA, despite the fact that more than half of the states have legalized it for some combination of medical and recreational use.  The disparity in legalized usage has contributed to the illicit market for cannabis products, leading to counterfeiting, incorrect dosing, and contamination issues.

In 2019, the industry experienced the fall out of this illicit market production when several people died from counterfeit vape pens in both the cannabis and tobacco markets. The vape crisis provided a critical wake-up call for producers, suppliers, governments, and consumers, and drew attention to the dangers of consuming unregulated, counterfeit products. 

Related: Two Companies Partner To Completely Obliterate Vapegate

After an FDA investigation, it was determined that vitamin E acetate was being added to illicit market vape pens, causing lung damage, illness and ultimately lead to the death of 54 people. Under the strict track-and-trace requirements imposed on the legal cannabis industry through state government regulations, additives to cannabis products would have been prevented due to the transparency the technology supplies to the industry’s supply chain.

The world's most transparent supply chain

Through their strict regulatory oversight, the cannabis industry has ultimately created one of the world's most transparent supply chains. For cannabis, supply chain technologies facilitate safety, regulation, and compliance along every step of the plant's lifecycle, from seed to sale to shelf. It cuts out the risk of counterfeiting and contamination, keeps shelves full, and allows for quick problem-solving. It also pivots when something goes wrong.

The slow maturation of the legal cannabis market created an initial lag in the acceptance of these types of technologies. Why? Cannabis is an agriculture product, and the agriculture industry has long managed to get by with limited, "check the box" type compliance solutions instead of strict tracking. This is the likely reason why the impact of the romaine E. coli outbreak was so difficult to manage. 

The impact of a contaminated batch extends beyond consumer safety; it can significantly damage a brand’s reputation and profitability. As cannabis evolves from the illicit market to a legal and regulated industry, many producers are still apprehensive about adopting technology into their operations.

In many cases, operators don’t see the correlation between supply chain transparency and the larger concerns around safety and brand reputation. Companies that are still leery of supply chain technology only need to look to large companies, like Chipotle, who have battled consumer safety crises to understand the importance of consumer safety on their reputation. Seed-to-sale supply chain tracking technology helps mitigate and even prevent these types of supply chain breaches.


The cannabis industry continues to face intense scrutiny, more so than other, more established industries. While public opinion has shifted significantly in favor of legalization, many people are still wary about the plant's safety due to cannabis's status as a Schedule One drug. Despite countless studies showing the medicinal benefits, the legacy of cannabis as an illicit substance continues to impact widespread acceptance.

Supply chain to the rescue

In many ways, the use of seed-to-sale supply chain technologies helps mitigate these concerns. By tracking the plant's lifecycle, from the moment it is planted to the moment it is sold, provides assurances to consumers, and helps cannabis operators gain broader appeal for their products. If consumers have confidence in a brand's safety and quality, they will continue to support and purchase products, ensuring the growth and profitability of the industry.

Supply chain technology is a critical piece of the cannabis ecosystem and provides an interesting case study for other supply chain-based industries. Connected data and insights are modernizing and propelling the cannabis industry by increasing the power of businesses, governments, patients, and consumers to make smart, safe decisions. As we all become more aware and educated about what we are consuming, the application of this kind of transparency to other industries seems inevitable. Consumers are demanding higher levels of accountability and information, and the model established by seed-to-sale software provides a blueprint for how other supply chains can implement similar transparency and accountability.