Cannabis Supply Chain Basics: What You Need To Know

According to the September edition of Business Wire, “global legal cannabis market size is expected to reach USD 91.5 billion by 2028, registering a CAGR of 26.3% over the forecast period.”

If you are planning to set up a cannabis business, you must understand that there are many stakeholders involved in its supply chain.

For instance, there are cultivators, distributors, ancillary laboratories, and retailers to begin with.

So, the first thing you ought to decide is where do you want to start. Do you wish to be a cultivator or a distributor or want to set up a dispensary?

Regardless of where you wish to mark your presence in the whole supply process, you will need to be familiarized with the complete chain.

Don’t worry; here’s all you need to know about the basics of the cannabis supply chain.

Cultivators & Growers

The supply chain begins with commercial cultivators and growers. However, it is noteworthy that there are statewide differences in regulatory take on cannabis.

So, you must grow and harvest their crops within the state where you wish to sell.

Perhaps, this is the most crucial stage from seed to sale within the cannabis supply chain.

Manufacturers & Producers

The following essential stakeholders in the cannabis supply chain are manufactures and producers. They are precisely responsible for trimming, drying and processing the flowers.

Indeed, at this stage, the flowers are prepared for final retailing. Further to this, there are typically no alterations to the final product.

Their work includes processing flowers to produce all the extracts and infused products as well.

Testing Laboratories

It is noteworthy that cannabis is generally tested at two stages within the supply chain. First, it is tested immediately after cultivation. And a second time after it has been processed and packed.

The second testing is generally done to ensure that the final product is in compliance with the state and federal regulations.

Test results usually include residual pesticides, impurities, and THC content.

Wholesalers & Distributors

Wholesalers and distributors complete the last stage before cannabis products reach the end consumers.

You would be buying finished products in bulk before selling them to a licensed retailer. Sometimes, you may also need to get your independent testing report before you can sell your bulk products to the retailers.

Apart from this, as a wholesaler or distributor, you’d also need to manage your own transportation to deliver the products from growers to retailers.


Now comes the last stage of the cannabis supply chain- the retailer. Typically, these are known as dispensaries that sell both recreational and medical marijuana. However, the product line largely depends on the state laws in which you wish to operate.

As a retailer, you’d want to get your custom packaging with your brand identity.

Besides, you’ll also need to get them delivered to other stakeholders involved in the supply chain.


The entire cannabis supply chain from seed to sale involves mainly these five stakeholders. However, there can be instances when other stakeholders may also be involved. For example, there may be ancillary plant-touching MRBs involved who are responsible for handling the products.

Nonetheless, you have the gist now to get started and plan your position in the cannabis industry.

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