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How the Supply Chain Crisis Impacts The Cannabis Industry

Regulated and unregulated cannabis distribution requirements vary by state and country, resulting in many obstacles. Delivery timelines, already challenged with compliance, were thrown into flux with the unpredictable consequences of lockdowns and quarantines. Even now, major shipping ports worldwide are suffering from further delays and more shutdowns from the supply chain crisis.

With more than 85% of operators reliant on single distribution channels and e-commerce sites, it’s not surprising that this negatively impacts the cannabis industry’s supply chain. However, regulations, restrictions, and sourcing difficulties are only some of the stumbling blocks affecting distribution and sales in the industry. 

The current supply chain crisis results in manufacturing capacity, port overwhelms, and logistical timelines. Let’s explore the various facets of the supply chain crisis for our industry, from capacity to cost to timelines and more.

Regulation and Compliance

Across the cannabis industry, regulation and compliance are well-known causes of supply chain difficulty. However, restrictions vary based on the intent of use, resulting in regulated and unregulated sourcing. In addition, different commodity sources come with their challenges, such as quality control and safety.

Even if companies are compliant with sourcing and distribution regulations, they often do not process, package, and distribute their products through multiple channels. As a result, most companies fail to find more than one source provider of cannabis. This results in supply issues from the very start since profitability relies on steady supply and demand.

Before the pandemic and ensuing supply chain bottlenecks, interstate and global regulation variance already slowed product distribution. As a result, it’s only harder to meet demand as manufacturers, suppliers, and distributors fall behind on commitments. 

Manufacturing Capacity

With staffing shortages, meeting product demand is more challenging than ever. Skill gaps are just one cause of the problem and high turnover in the manufacturing industry as many people job hunt for better pay and benefits. Even with a reliable product source, any cannabis supply chain company suffers without a workforce. 

In the few companies with an adequate workforce, product development is crunched. Many partners in the industry are overwhelmed and past production capacity. The increased demand is great for profitability – only if enough product is supplied.

Port Overwhelm 

If manufacturers’ delays weren’t enough, staffing shortages impact product shipment. With an agricultural commodity, time is of the essence. Sourcing product is more accessible on an international scale. And for a global supply chain like ours, it’s easier than ever to integrate current suppliers with a well-built process.

Unfortunately, shipping delays with port overwhelm stagnate global supply chain management. However, proper planning is a simple way to avoid foreseeable issues such as port overwhelm. If a company lacks proactive processes, things such as port overwhelm make meeting buyer and consumer demand even harder. Fix this by working with reliable, experienced supply chain management.

Logistical Timelines

The biggest challenge and solution to the cannabis industry’s supply chain crisis revolves around logistical timelines. Coordinating multiple people, facilities, and supplies around the challenges described previously is more difficult without proactively developed processes and responses. Adapting to a breakdown in any supply chain requires high creativity and resources. If you lose a product source, and they are the primary source, your business runs the risk of failure.

Planning logistics is critical to keeping supply chains intact. There are several moving parts to consider, from product and service ideation to project scope and market conditions. At the Calico Group, our process exists to address and mitigate risk from day one. Discover why and how our solutions help us and our clients overcome supply chain challenges from the beginning.

Where Supply Chains Adapt

We have already highlighted the issues with single source and distributed supply chains. One of the many solutions we provide includes a multi-continental approach to finding products anywhere. A global supply chain is only as good as its network of partners and suppliers – and our network is strong.

Our end-to-end approach solves current and future challenges. We cover more than supply chain challenges too. With distribution and manufacturing capabilities, meeting consumer demand is easier than ever. Packaging and branding are valuable aspects of our process, saving time and money in finding an outside marketing firm.

Scaling any business in the cannabis industry requires foresight and anticipation of market conditions, obstacles to growth, and expansion opportunities. Revamping a supply chain and sourcing process can scale down time-consuming aspects of your business. Contact us today to discover how we can help improve your supply chain planning and survive the next potential crisis.


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