By: Dann Anthony Maurno
The NAV People has released D365 Cannabis for the marijuana market-a market that, of course, operated informally before legalization.
The NAV people describe D365 Cannabis as an “enterprise grade software [that] manages every aspect of the business from ‘seed to sale.'” As well as managing the greenhouse, growing and manufacturing processes, D365 Cannabis also covers finance, sales, distribution and wholesale, as well as the management of dispensaries. As a modular solution, D365 Cannabis can be implemented enterprise wide or across discrete business units.
The solution is built on AgriWare, a seed sales and inventory software, then is powered by Microsoft Dynamics NAV. AgriWare covers the greenhouse side, Dynamics NAV the manufacturing and financials, and The NAV People has written a point-of-sale component for brick-and-mortar dispensaries, which taps into patient information in cases of medical marijuana.
Why the D365 label? “I think we all know the branding of all of this is going to change,” says Jeff Kiehn, The NAV People’s CEO of the Americas. “With us launching a product right now, branding it with Dynamics 365 is slightly ahead of the curve. Our speculation is that [by fall], it’s not going to be NAV, it’s going to be Dynamics 365.” The company has apps that were approved just last week for Dynamics 365 for Financials, and it is actively recoding its NAV add-ons for Dynamics 365 as well.
How it is structured
Kiehn described some of the complexities of this new market, which call for an enterprise-grade solution:
- As a new industry, its growers and producers are largely new. Kiehn says of the grow side of the business, which is the greenhouse, “Obviously there’s no track record; you’re not finding investors or operators who have been growing for 20 years.” Some come from the agricultural world, and one customer has taken over a greenhouse that used to grow for Del Monte. But while greenhouse managers may have experience with cucumbers and tomatoes, none have experience with marijuana.
- Allowable form-factors vary by state and country. Colorado allows for practically any cannabis-based product to be sold from a dispensary, including food products (like cookies and brownies), oils, loose leaf by the ounce and even topical products and bath oils. By contrast, most states allow for dispensing only dry marijuana bud or oil (much used for medical use). Thus a Colorado producer has far more SKUs than would a producer in Canada.
- Supply chain regulations vary widely by state and country. As an agricultural product bordering on a pharmaceutical, most states require lot traceability (e.g., for product recalls); thus each plant must have a unique identifier. It being a controlled substance, most states require a report should a plant be destroyed or goes missing in the supply chain. True too, medical-use regulations vary state-by-state. In most instances, patients are issued cards enabling them to purchase product, which tap state-run databases with the volume or forms the patient can purchase (usually in a one-month period). Canadian dispensaries use the Health Canada system. “So that’s the integration we need to have,” says Kiehn. “We know the state systems that they need to report into, and have NAV send the details that [any particular] state is looking for.”
- Purchase options run the gamut from online-only to cash-only. Health Canada customers can only purchase cannabis products via ecommerce, which requires credit card processing. In the US, customers in New York (and in most states) must go to a brick-and-mortar dispensary and pay cash out of pocket. “In the states we’re dealing with right now, it’s pretty much a cash transaction,” says Kiehn. Large banks are turning dispensers and producers away, forcing them to go to small regional banks that don’t typically allow for electronic fund transfers. So, customers may be able to preorder on a Web commerce site, but must pay cash at the dispensary.
- Producers must reproduce their infrastructure state-by-state. Kiehn described a grower based out of Illinois and New York that is expanding into Maryland and into Massachusetts, with plans for more geographies. But says Kiehn, “that whole supply chain has to sit within the state. You can’t produce product in Illinois and ship it to NY; it has to be produced in NY, and follow NY regulations; and it can’t cross state lines.”
As The NAV People describes D365 Cannabis, it is designed to manage each stage of the business and supply chain (seed-to-sale), including:
- Growth: Greenhouse management with individual plant identification, greenhouse planning schedules, labor and grow-side costs.
- Production: Manufacturing and production control for various form factors (e.g., oils, dried flowers, cookies and other food products), with resources planning, reporting and KPIs.
- Sale: Management of sales and sales channels, be they a growers’ own dispensaries or wholesale supply to other outlets. The system manages orders, invoices and shipments with full reporting and KPIs, and can be configured for both B2B and B2C.
- Accounting: Financial accounting provides all the necessary features including cash receipts, consolidation and credit control, fixed asset registration, depreciation and multi-dimensional analysis.
Kiehn says of growers, producers and dispensaries, “They’re all learning at the same time.” For an industry that has no legacy of enterprise solutions, a vertically-integrated solution is, in his words, “a holy grail.”