Marijuana Business Magazine January 2019

Marijuana Business Magazine | January 2019 72 CHALLENGES: New packaging and testing regulations enacted July 1 in California put some cultivators and product manufacturers out of business, while others were forced to scramble to become compliant. Those regulations created a surge in demand for compliant products, and Caliva had compliant product ready to stock, including flower, vape cartridges and pre-rolls. Inventory management for vertically integrated businesses with wholesale operations is more challenging because it requires managing processes for both retail and wholesale inventory, Caliva CEO Dennis O’Malley said. “Inventory control is very complex for vertically integrated businesses with multiple distribution points and multiple product lines coming in and out,” O’Malley said. “After a period of unprecedented growth, inventory management became more critical.” SOLUTIONS: Caliva has integrated its point-of-sale (POS) system, Green Bits, with Seattle-based Headset's cannabis data platform. That combination gives Caliva’s inventory-control team a real-time indicator of its wholesale business. Headset’s Bridge service—a vendor-managed inventory system—allows Caliva’s team to see a retail partner’s inventory. That, in turn, helps Caliva forecast upcoming inventory needs and dial in its manufacturing and production schedules. For its direct-to-consumer inventory, Caliva developed proprietary software and integrated its other applications—Green Bits and Headset— so there’s a single source for inventory information, including what’s in stock and what needs to be reordered. All of Caliva’s products have one master inventory number. Even if products are sold through different channels—retail, web or delivery—once a product is listed as out of stock in one channel, its status updates across systems. EXPERT ADVICE: Hire inventory-control managers with experience in other highly regulated industries—think pharmaceutical, agriculture or perishable-foods companies. Experience in high-traffic, high-volume, direct-to-consumer businesses such as Amazon or FedEx is helpful, too. Those candidates are generally more agile and advanced in managing inventory control systems, O’Malley said. And—perhaps most important—don’t run out of product, O’Malley said. It sounds simple, but it’s hard to execute at scale when you manufacture, distribute or sell hundreds of products. Caliva's multiple distribution points make accurate inventory numbers critical. Courtesy Photo Relying on Technology Dennis O'Malley is CEO of Caliva. Courtesy Photo CALIVA San Jose, California Vertically integrated with cultivation, retail, wholesale and distribution licenses Founded in 2015 Stock Taking