Marijuana Business Magazine May-June 2020

Marijuana Business Magazine | May-June 2020 58 “That creates a complete paradigm shift in terms of how the partners view you and work with your firm,” Grover said. “And that’s something that we used to get a lot of flak for from our board: fly- ing around so much and having all these face-to-faces. But those relationships that we were able to strengthen and set up have really allowed us to keep delivering to our customers.” TIP 3 PLAN AHEAD TO ENSURE YOUR PRODUCT INVENTORIES ARE ADEQUATE, ANTICIPATING HOLIDAY DELAYS AND OTHER FACTORS THAT CAN AFFECT SUPPLIES. Pantry Infused food manufacturer | Los Angeles Pantry began selling cannabis-infused olive oils, ganache bonbons and other food products in California in 2019. The startup quickly noticed inconsistencies in how long it took to receive chocolate from Italy, packaging from China and other orders from its international suppliers. “Early on, we were waiting on product—whether it was chocolate or packaging or whatever—and seeing the lumpiness in the supply chain made us carry more inventory,” said Scott Jen- nings, CEO and founder of Pantry. Pantry aims to hold enough packaging inventory to last roughly three months. Because food products have a shorter shelf life, the company tries to keep enough ingredients in stock to last one to two months. “Not everybody has the money to do that because inven- tory is expensive. It’s money that’s literally sitting there until you sell it,” Jennings said. Although Pantry has explored other suppliers for its ingredients, the com- pany’s inventory cushion has not yet required a vendor switch, he said. “We try to build in cushion models. If somebody says they can deliver in a cer- tain amount of time and they were late before, then we build in a little variance around what they say and what we’ve seen them do,” Jennings said. “Then we add a little bit more variance to that time estimate depending on if there’s a pan- demic or something else going on.” Lucid Lab Group Extraction and technology firm | Seattle Getting shipments out of China during the coronavirus pandemic is taking 11/2 to two times longer than it typically would take, Jim Makoso, vice president at Lucid Lab Group, said in late March. The company, which extracts cannabinoids and manufacturers vape products, had some inventory cushion amid the coronavirus pandemic because it placed a larger order during the fourth quarter of 2019 to ensure it would receive vaping hardware during “the very small window” between Christmas and Chinese New Year. “We’re really pretty proactive in terms of making sure our inventory stocks are adequate to handle any demand that we can foresee,” Makoso said. “We’ve got it down to a science. We take whatever it is we think we need, multiply it times 1.5, add in the growth factor—however fast our businesses is growing—and that’s what we make sure we have on hand,” he added. TIP 4 THINK OUTSIDE THE BOX AND WORK WITH LOCAL SUPPLIERS. Coda Signature Edibles manufacturer | Denver Environmentally friendly packaging inadvertently helped Coda Signature circumvent inventory shortfalls for its new line of gummies. Before the coronavirus pandemic, the infused chocolate maker worked with a domestic vendor during the fourth quarter that could supply the firm with compact pouches for the gummies it calls Fruit Notes. “Interestingly, first we looked at round tins and square tins,” said Marji Chimes, chief marketing officer for Coda Signature. “We’re very concerned about the environment, and we want to have a packaging that has a smaller footprint.” Coda settled on mylar pouches from a U.S. company for its coconut and lime, strawberry and rhubarb and other gummies. “They’re really flat, and you can store a lot of them,” Chimes said. “Bigger picture, we’re starting to look at the compactness of packaging for storage in addition to the environmental aspects.” While Coda works with a mix of domestic and international suppliers—an Ecuadorian food producer, for instance, to import chocolate and a Chinese cartridge maker for its flavored cannabis distillates—dealing with local suppliers allows the firm to easily communicate the goals for its product packaging, quickly respond to regulatory changes and reduce shipping costs, Chimes said. “It was a collaboration (with the domestic vendor) to get us to where we really wanted to be,” she said. Pandemic Pivot