The purpose of working with a three-tiered system in Nevada is to ensure accountability and responsible practices, making sure that only licensed marijuana products make it through to market. This creates protective barriers against dangerous cannabis products from reaching the consumer. Additionally, this system will ensure that the state collects cannabis taxes efficiently.
How Cannabis Distribution can get along with Alcohol in Nevada via a tiered system
Tier 1- Manufacturer – Cannabis and Infused products that are made in Nevada to be purchased by Nevada distributors.
Tier 2- Distributor – Through a regulated system, Nevada cannabis distributors deliver cannabis products to licensed retailers across the state. Distributors collect and send excise taxes and ensure that the cannabis is properly handled and responsible consumption. It is the distributors responsibility to create the safest environment for the consumer.
Tier 3- Retailers – Nevada retailers who are licensed to sell cannabis directly to Nevada consumers.
How Cannabis Distribution Works
Most people may think distributors simply deliver products from manufacturers to local retailers. However, the role of the distributor is much more involved than simply providing a delivery service.
Distributors purchase the cannabis products from suppliers, one reason for this is because it reduces the suppliers’ capital costs (i.e. payment issues from suppliers). The product is then transferred and stored at local distribution facilities until local retailers order it. Typically, this is done so retailers can keep their inventory and holding costs to a minimum. Given the high value of product we are dealing with, security is of the utmost concern. By incorporating processes and streamlining physical and electronic security measures, consumers can rest assured that the product they are purchasing has been monitored from seed to consumer. Additionally, especially in the cannabis industry, same day or next day delivery helps keep the freshness of many products for consumers.
Retailers are licensed by the state of Nevada and include such outlets as your local dispensary, casinos, restaurants, concert venues, and sporting venues. Because distributors are responsible for selling the beverages to retailers, suppliers also benefit, as they often cannot afford to employ large sales forces. By using a distributor, a supplier can increase the scope of the market.
Through strategic partnerships and industry best practices, distributors ensure the market remains viable, providing balance of payment advantages to both the supply side and the retail side. This, and collection of excise taxes are probably the most critical benefits distributors provide. Without the distributors all areas of the supply chain would experience bottlenecks and restrictions, due to capital constraints and logistical issues.
Nevada Cannabis Distributors Association Best Practices
Industries that flourish adopt a philosophy of continual improvement to their processes. Incorporating a best practice can have a profound effect in reducing errors, labor, and turnover time.
It is important to note that while all companies differ, there should be some basic guiding tenets that help facilitate a smoother process flow.
#1 Using an advanced shipping notification system. ASN is simply a way to track the details, contents and deliveries of packages. Without this system in place, a facility greatly compounds its inefficiencies.
Most of the time products are to be transferred to a retail store, or some sort of venue. By having foresight of which shipments are to arrive in the coming days as well as the details of each product and next destination, warehouse personnel can prepare in advance for outbound shipment for each incoming load. The best scenario is for inbound shipments to be received, inspected, re-configured and then quickly loaded onto trucks for routing for their final destination.
#2 Vendor Compliance Policy. Vendor Compliance is in place to support the “retailer”, providing the perfect order model as well as the correct product, right amount and perfect time concept. Improving vendor compliance or vendor performance greatly reduces or eliminates waste in the retail supply chain. This is a great quality control measure for the industry that should be implemented at every distribution facility. Transparency and communication are key components that need to be collaborative with all parties involved in the chain.
#3 Rotation of stock. Ensuring that products shelf life expiration is current. Rotation of stock if not current to best protect the consumer.
# 4 Manage product returns. Returns management is another important best practice area that is often overlooked. Distribution facility managers must be able to control the returned goods inventory so they know what is being sent back and what needs to be disposed of.
#5 Implement cycle counting. Taking a physical inventory can be tedious. As a solution, many companies look for alternatives to conducting annual physical inventories. One method is incremental cycle counting. This is a way of eliminating the physical inventory and maintaining faster, more accurate real-time control of inventory within a distribution center.
What is cycle counting? Cycle counting is basically designating a certain number of products or bins each day to be counted so that over the 12-month period the entire distribution center is counted perhaps several times. By doing this errors are corrected at the time that they are identified. There are a number of advantages to this process, the most obvious one is that the inventory accuracy is progressively corrected rather than having it done in one massive step once a year. Cycle counting usually cuts labor demand significantly since it can be worked into the normal workflow of the distribution center.
Nevada Cannabis Distributors Benefits
NCDA supports the local community, local farmers. We love local family owned businesses! And when you buy local it helps ensure a strong future for local products. Using a dedicated team of foragers working around Nevada to find the best locally grown, raised and produced items to feature at your local Cannabis Distributors.
NCDA will work with local distributors to support safe and legal use of cannabis related products. As well as promote and invest in programs against under age use.
The above are just a few considerations. As most companies are constantly changing so should your best practices. The important thing to remember is that a best practice should be implemented, and if done correctly can increase productivity, reduce costs and create a sustainable path to growth.