Our fourth Q&A host, Sandra Thibodeau from Cannabis Business Opportunities, gave some applicable best practices for cannabis businesses – and businesses in general.
According to Sandra, here’s the difference between procurement, contract management, and supply performance management:
- Procurement is the acquisition of goods and services that your business needs to produce a product or service to the consumer. I would like to add that purchasing deals with the sourcing activities, negotiations and strategic selection of goods and services and is used to describe the transactional function of procurement for specialized services or goods.
- Contract Management is the management of contracts made with vendors. Contract administration is performed as required to negotiate, support and manage effective contracts.
- Supply Performance Management is ensuring current, complete, and accurate information is available for use in award decisions. We provide up-to-date documentation of contractor’s ability to provide quality, on-time products, and services that conform to contractual requirements.
Yalcin Surkultay at STI Technologies Limited, asked, “What are some best practices in implementing alegal purchasing practice?”
Sandra responded that “the first step is to see exactly what role purchasing plays in your company. When this is fully understood, the personnel you choose to perform these tasks should be capable of interpreting and enforcing the Commercial law for your state and/or country.”
Then, she says, you should ask a list of questions in order to figure out what your procurement requirements are:
- Who has the authority to purchase items for the company? What items can that person purchase? Are there any spending limitations?
- What are the business’s requirements for adequate supplier competition and what criteria will be used to select possible vendors?
- Which types of contracts can the business enter into with successful bidders or vendors?
- What is the company’s position on conflict of interest and personal loans from suppliers?
- What kinds of information does the company consider confidential?
- What is the procedure for dealing with legal questions?
To this end, Terrien Hale, owner at Hale Heals in Nevada, said, “I want to start an edible company and want to make sure source high grade product and ensure the company I buy from is legal in their processing as well.”
Sandra responds that a very important piece of the procurement process is planning for your future buys. You should be writing down all the requirements you want and need from the high-grade product you are seeking. So information such as strain preference, extraction method, wanting more or less of a specific chemical, organic versus pharma grade, etc.
Automation is the key to the bottom line, she says, and is the key to making sure you can spend your time and money on other resources.
This example is brought up by Matt McLaughin at KeyIn who asked, “We mostly buy from our personal network we have acquired over the years. Why would we need to consider implementing a standardized purchasing process?”
Sandra replied, “If your company has a personal network of trusted suppliers and you are happy with the quality and pricing and the budget is good and everything is operating smoothly, I would say that you already have a purchasing process you are adhering to.”
Then the conversation moved more broadly to companies generally entering the market. Sandra’s advice was, take what you know and apply it to the industry. (After all, that’s what makes this space so unique!)
For example, Russ Logan, managing director at technology company Originate asked how companies new to the cannabis industry, but who have deep experience in their area of expertise, can best demonstrate their qualifications to serve the industry.
Sandra replied, Find your niche and run with it. Marketing, networking and educating people on the importance of what your expertise is and how it is important for them, will always win them over because the “need” is there.
No need to reinvent the wheel, she says, apply what you know and make it happen! That is the joy of starting a company in the Cannabis industry, especially when you have professionalism and standards behind it.
To conclude: the key to making your company work is to make it flow naturally. Take what you already know and apply it, automate what you can, and plan ahead so that you don’t have to worry about these things down the road!