Mining Data for Operational Efficiency
In addition to looking at the broader market, it’s important for cannabis retailers to look at their own data, which can help with operational efficiencies, said Cy Scott, Headset’s co-founder and CEO. For example, looking at its own data enables a retailer to determine the optimal amount of inventory it carries — you don’t want so much that your cash is all tied up, but if you have too little, you might be out of something your customers want.
“You don’t want to be out of cash because it’s all in inventory,” Scott said. “But as a customer, you may go to another retailer, and they may lose you forever. It’s really around those operational efficiencies — sales trends and staffing trends.”
Because Headset collects data through retailers’ point-of-sale (POS) systems, it sees the information in real-time and feeds it into its market intelligence system.
“We give retailers their data back to them in a better manner,” Scott said. “We really help them drill in and understand what’s performing well for them. We also give them benchmarking tools so they are aware of what’s happening around them and can optimize their own stores.”
Alex Feldman, general manager of New York-based LeafLink Insights, said many of its clients use data to determine whether it makes sense to expand to a new state or how particular products such as flower or vape cartridges are selling. LeafLink Insights, a newly created entity of the cannabis industry’s wholesale marketplace, has a product suite that includes MarketScape and myBI. MarketScape monitors competitive product trends, retailer purchasing habits, order value trends, and brand rankings at the county level in real-time. MyBI is an advanced business intelligence product that allows users to measure their company’s performance against internal key performance indicators while optimizing their organization.
“The value proposition is that the head of sales or an owner can prepare information for a Monday morning sales meeting,” Feldman said. “They’ll be able to tell if they need to focus on different counties or different retailers, and they don’t have to invest in a whole set of data analysts.”
Harvesting Data for Higher Crop Yields
Cultivation facilities vary from company to company. Some are automated; others take a more hands-on approach to growing cannabis.
Regardless of their methods, collecting data from the grow rooms can give a cultivator a better picture of its operation and enable it to better mitigate loss and enhance efficiencies. Data can help a grower monitor and control the environment cannabis plants are growing in, leading to more consistent and higher-quality products.
Key aspects of a grow room that should be tracked include temperature, relative humidity, CO2 concentration, light, vapor pressure deficit, and water content in the soil.
“To create a really solid, high-quality plant, environment is everything,” said Ben Celani, co-owner of High Life Farms, which has a 53,000-square-foot cultivation facility in Chesaning, Mich. “It’s also important for mitigating pests and mold.”
Data also can help your sales force by predicting how much flower you’re producing over what period of time, said High Life’s General Manager Kyle Neathery. If you know how much the plant weighs when it’s cut down, you can predict what your yield will be after it’s dry.
“That helps our sales team forecast what they can sell,” Neathery said. “It helps the entire downstream process.”
With the cannabis industry projected to reach upward of $25 billion in sales by 2025, there are plenty of opportunities for ancillary businesses to provide goods and services to plant-touching businesses, and data can play a key role in those endeavors, New Frontier’s DeCarcer said.
“There are many opportunities beyond cultivation,” said DeCarcer. “The startup community should not limit themselves to we’re going to grow, process, make edibles. The sky is the limit in terms of how much the industry is going to explode. The industry is ready for sophisticated solutions that we see in more mature industries.”
About the Author
Margaret is an award-winning journalist who spent nearly 25 years in the newspaper industry. She has covered a variety of business topics, including residential and commercial real estate, technology, telecommunications, and cannabis.