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AUTHOR:  aBIZinaBOX Inc. CPAs – Jordan S. Zoot, CPA
PUBLISHER:  CANNABIS LAW REPORT

We don’t have experiences that impress or “WOW” us very often. Perhaps we have become jaded. However, we had one today, and are still attempting to digest it. We spend most of our time working in the commercial cannabis industry in California – complaints about the complexity of licensing, tax reporting and regulatory compliance are constant. The implementation of the METRC compliance system in California became a running joke with single and double digit usage out of thousands of licensees.

 

METRC is a track and trace system that is designed to monitor activity in the cannabis industry and report to governmental and regulatory agencies. It is not particularly user friendly, and some would say painful to interface and work with. Hence, the ability of the software that a cannabis industry business uses to operate its business to seamlessly interface with METRC is somewhat of a “holy grail”.

 

We have deployed and looked at several applications for the operation of extraction, manufacturing, and distribution of cannabis. Once again, our focus has been on the California market.

 

We are going to be brutally honest.

 

  • Our initial experiences were with Fishbowl Manufacturing, and it was a decent product, but, we think its model is a bit outdated.
  • We looked at Flourish Software, and while we like their platform and METRC integration, the lack of a connector to QuickBooks Online is cause for concern, and while they have a broad range of modules, they seem to be spread somewhat thin. We reserve judgment on them.
  • Then we watched a demo of Kanha CMS and were completely blown away. Kahna’s application is a platform that was built for cannabis, not modified from something else. The application has a seamless real-time sync with METRC that has finally gotten it under control.

 

The features of the application include:

 

  • Purchasing – the purchasing process, including the generation of Purchase Orders and track of Cannabis Cultivation Tax [“CCT”] is entirely automated.
  • Inventory Tracking – handles batches, strains, parent-child product history, testing records, and detail for pesticides. Cannabis and non-cannabis items are easily tracked by the system with a novel SMS reporting functionality.
  • Manufacturing – the system maintains multiple production calendars so tracking batches and personnel is simple. Every step in the manufacturing process and costing information it tied back to inventory. Kitting and “Standard Operating Procedures” [“SOP’s”] are an integral part of the system. There is a robust function to track metrics and process control, and critical calculations are automated.
  • Sales – the platform has a robust B2B interface which facilitates wholesale distribution of product. The platform captures the data which is required for CCT and Cannabis Excise Tax [“CET”] reporting in California. The reports and data capture facilitate an ability to comply with California Dept. of Tax and Fee Administration [“CDTFA”] and cannabis regulatory agency reporting and record keeping requirements [See “Whose Books?”]
  •  Reports – the platform provides the ability to specify KPI’s in dashboards, and support export to Excel, CSV and PDF. We were particularly impressed at the app’s ability to generate a commercial manifest the complied with Bureau of Cannabis Control [“BCC”] requirements.
  • Integration – exists for METRC, QBOnline, Leaflink and
  • Automation – the platform has extensive tools to facilitate the process automation.
  • Additional – the platform supports barcode scan from iOS and Android devices, has an integrate chat function which is like Salesforce Chatter.

 

Our understanding of the range of products that are being produced on the Kahna platform include:

 

  • THC w/without CBD Edible Liquids (i.e. drinks, tinctures, etc.)
  • CBD ONLY Edible Solids (i.e. tablets, candies, etc.)
  • CBD ONLY Edible Liquids (i.e. drinks, tinctures, etc.)
  • Flower Based Smokables (i.e. pre-rolls, joints, blunts, etc.)
  • Flower plus Concentrate based Smokables (i.e. kief joints, bubble joints, rosin sticks, etc.)
  • Extract based Smokables (i.e. Vape Cartridges, Syringes, etc.)
  • BHO and Solvent less Concentrates (i.e. Wax, Shatter, Budder, Sauce, Sugar, etc.)
  • THCA Crystals and Crystalline
  • Wholesale Distillate
  • Wholesale CBD Isolate

 

If we sound giddy, perhaps it is because we are. The platform is constantly evolving, and the epiphany that struck us, is that a cannabis manufacturer or distributor could run their entire business off this application. Say goodbye to Excel spreadsheets and patching apps together.  

We are witnessing a HUGE leap forward in technology for the management and operation of cannabis businesses. Watch for future articles where we take a deeper dive into the platform.