Why Distribution is Important in the California Cannabis Industry, according to Verdant Distribution

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Cannabis, whether medicinal or recreational, is a socially sensitive product subject to abuse that needs to be regulated and distributed responsibly. Distributors like Verdant Distribution are responsible for quality assurance, inspection and testing for purity and contaminants before the product can be delivered to dispensaries and eventually on to consumers, according to Verdant Distribution.

California legislators recognize that cannabis and cannabis products, whether medicinal or recreational, are socially sensitive and should be regulated and distributed responsibly. In order to achieve that goal, California’s regulation of the cannabis industry has been structured to revolve around a strong distribution tier that mirrors the success of California’s alcohol regulatory system. Over the last eight decades, California’s alcohol regulatory system has provided the public with a huge variety and selection of products, fostered competition between suppliers, lead to innovation, superior quality and stabilized pricing and has assured efficient and effective regulation, control and taxation by the state. Consequently, California’s cannabis laws now mandates that only licensed distributors may transport cannabis and cannabis products throughout the state. In addition, inspection, quality assurance, coordination with testing labs and collection of state excise taxes may only be done by licensed distributors. These requirements ensure efficient and effective regulation, taxation, public safety and an open, accessible and diverse market place for cannabis in California.

In addition to the foregoing, California distributors also play a vital role in protecting and benefiting cultivators, manufacturers, dispensaries and consumers as exemplified below:

Cultivators/Manufacturers:

Distributors will provide California cultivators and manufacturers with the following benefits:

Product pick up from the cultivator/manufacturer

Testing and delivery to dispensaries

Sales representatives introducing and educating dispensaries on cultivator and manufacturer products and new lines
Provide expertise and economies of scale necessary to assist the building of competitive brands both regionally and statewide in a soon-to-be very competitive market.

An avenue to markets that small and/or specialty cultivators and manufacturers would typically be unable to reach due to capital restrictions, lack of transportation, marketing and a sales force
Timely information to cultivators and manufacturers about local markets, trends, successes and failures so that suppliers can adjust accordingly.

Education to dispensaries and consumers about cultivators’ and manufacturers’ existing and new product lines
Deliver cultivator and manufacturer products on a regular and consistent basis to local dispensaries
Helping cultivators and manufacturers manage their production and budget for the future
Information related to changes in legislation, rules and regulations .

Dispensaries:

Distributors will provide the following benefits to California dispensaries:
A wide variety of products at a reasonable and consistent cost.

Ability to get information and order from the myriad of products that will be produced in the state from one sales person instead of multiple representatives. This leaves dispensaries time to focus on their business and their customers
Education about existing products and new product lines.

Weekly product deliveries in manageable quantities to avoid both out of stocks and high inventories.

Market insights and trends

Act as a communication conduit between the dispensary and the cultivators and manufacturers in order to provide product feedback.

Give dispensaries displays and other sales materials that assist the dispensaries in selling product while educating consumers.

Keep an appropriate level of inventory on hand providing the dispensaries with “just-in-time” delivery to minimize dispensary cash-flow and storage issues. This gives dispensaries adequate space to display a variety of products.
Ultimately, all the benefits of distribution for cultivators, manufacturers and dispensaries benefit the consumer. Consumers will enjoy a huge variety and selection of products, confidence of availability and fostered competition between cultivators and manufacturers that leads to innovation, superior quality, safe products and stabilized pricing.

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Daniel Heuer
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