Put the Cheech and Chong stereotypes away – cannabis is serious business. The legal cannabis trade demands a high level of logistics and compliance. That’s what I learned from Cuba Flowers, Chief Information Officer at Privateer Holdings.
After his customer panel at the Acumatica Summit, Flowers gave me the full story of an upstart company in a not-so-typical industry – and why he left Nike to roll the green dice. Normally ERP and DevOps are thought to be uneasy bedfellows – if not mortal enemies. Not for Flowers, who leads a charge of continuous development and open ERP APIs.
“Brands will determine the future of the cannabis industry”
Privateer Holdings bills itself as “A private equity firm shaping the future of the legal cannabis industry.” Privateer Holdings has three fundamental beliefs:
- Cannabis is a mainstream product consumed by mainstream people;
- The end of cannabis prohibition is inevitable; and
- Brands will determine the future of the cannabis industry.
The topic of cannabis evokes strong reactions – I’ll close this piece with my own views. But for now, the logistics. Based out of Seattle, Privateer’s “grow facility” is in Canada. “A completely different market from the U.S,” says Flowers. “They’re going to be the first G7 nation to legalize recreationally, almost certainly.” Privateer Holdings’ ownership group has now raised $200 million to make good on their brand vows.
Privateer has several lines of business: medical cannabis, pharma-grade cannabis for clinic research, and the recreational market. Each is highly regulated. Privateer must keep meticulous track of the states/countries it can do business in, and the reporting requirements for each.
Cannabis and compliance – “a little bit chaotic”
Flowers was hired six months ago. His first mission: assemble the technical team Privateer Holdings requires for exceptional data visibility. Flowers cited the example of for Tilray, their medical cannabis brand:
If we don’t actually track our data right at Tilray, we could have to recall an entire batch of cannabis: That’s a $200,000 value.
And how about that leap from Nike?
I like small companies, and this was a perfect fit for me… The industry itself is a little bit chaotic, and I love that as well.
That chaos extends to compliance:
There’s a lot of unpredictability. In California, for instance, they just legalized recreational – or what we call adult use – but they won’t have all the regulations worked out for another three, six months – and then they won’t implement those for another year. Everyone wants to be ready on day one, so you’ve got to move really quick to keep up, but you don’t exactly know what you’re going to have to do six months from now.
Logistics – every seed must be tracked
In Canada, Privateer ships medical cannabis directly to the consumer, since it’s a federal legal program. Things are much more complicated in the U.S. When Flowers was brought on board six months ago, Privateer had already been live on Acumatica for a year and a half with some users. But the full use of Acumatica was a slow burn, held up by a lack of IT leadership:
The rollout was a little bit more organic. It was just a handful of people really pushing it. It was not well-orchestrated, which is why we’re not fully rolled out and fully adopted at this point.
There was no choice for me to change from Acumatica at that point, even if I wanted to. Luckily, I very much like the selection.
The Tilray facility brought the need for ERP to a head:
We have Acumatica rolled out in our Tilray facility in Canada, which is a pharma-grade facility with 27 grow rooms. It’s quite complicated, because we cycle harvests and we have 160 people working there. Everything is compliant, so we’re tracking seed to sale; everything has to be tracked. It was pretty clear, almost from the beginning, as we brought a few grow rooms online, that spreadsheets and all that were not really going to sustain us. We started to look at ERP solutions a little bit after that.
Mixing cloud ERP and DevOps
Fortunately for Flowers, Acumatica is a good ERP system for a DevOps enthusiast. He spent the first few months forming his team, while pushing ahead with an Acumatica financials rollout across the company. Almost all of Privateer Holding’s child companies are live on Acumatica financials – “that’s the foundation,” says Flowers.
Next up: Acumatica manufacturing and warehouse management at Tilray, manufacturing and distribution in the U.S. for California and Washington. A big e-commerce refresh using Magento, Acumatica’s e-commerce partner, is also likely:
We still have to do due diligence on Magento, but I have not seen another competitor that looks that good, that can do B to B, B to C. We have some customization needs in there. It checks all the boxes.
On the panel, Flowers spoke about their heavy investment in AWS. I wondered – is that underscored by a DevOps philosophy?
Absolutely. I say: automate everything. We’re aggressively DevOps. We work in tiny batches and push that – it’s very much an agile manifesto kind of thing. The only way to measure your progress is working software.
But it’s not about iterative speed for its own sake. It’s about IT finally serving the business:
I’m relentlessly business value focused. While I am a software developer by trade, the things I prioritize are business value, UX, conversions, things like that. While I have opinions about languages and frameworks and all that, I don’t really give a shit. It’s not where the business value is.
Flowers hired his team with the same philosophy:
I would never hire a .NET evangelist. I hire generalists who are excellent at keeping up with DevOps in the industry, but who can also can see the business. Right? They know the business. They’re not just quiet geeks sitting in a corner that are all awkward. I hire social, holistic thinkers. Systems thinkers.
Right now, they push out weekly sprints, heavy on reporting and visualization:
You’re handing off all this stuff back and forth: QA to dev, job developer to a UX developer, all that kind of stuff. If you have a small team, a scrum team of generalists and they’re good, man they can just move so quickly.
It took a few rejected applicants before HR got the hiring process down. Now they qualify “social developers” that fit Flowers’ approach:
That’s a big reason I hire social developers, because I want to be able to send any of them over to talk to a business user, and figure out a problem.
Flowers’ team doesn’t wait for the business to call with a requirement:
We do much more of, “We’re gonna come to you. We’re gonna help you define your process and implement that in a tool that works.” We look at ourselves like consultants, in a way, but more like partners.
So how does cloud ERP fit in? Flowers talked about moving from static reports to open API calls:
Let’s use Washington for an example, because they’re pretty mature in this space: They have a compliance API, so every time there’s a sale or movement of cannabis product, it has to be reported to them, essentially in real time. So we have to hit this API. We’re going to use Acumatica’s APIs [to do that reporting].
The wrap – uncharted ERP waters ahead
Flowers has a laundry list of ambitious projects on deck. He told me it’s too early in his tenure to measure Acumatica’s ROI, but he has every intention of getting those numbers – “measure everything” is part of his DevOps mantra. We talked about avoiding those $200,000 recalls, and how you might set up a metric to include risk management – not an easy task.
Flowers is actually considering moving Acumatica onto his company’s own AWS instance. It might seem odd to move from public cloud to private, but for Flowers, it’s about getting as much visibility and control as possible. That’s the DevOps-and-ERP mindset. For the e-commerce push, the ability to manage spikes in demand internally is a plus:
I would just like the capability to ask my developers, “Can you look into that? See what’s going on.” We don’t have the visibility in a SaaS platform.
On the panel, Flowers talked about the accessibility of Acumatica CEO Jon Roskill:
For me to have someone like Jon sitting there, who I can actually pitch ideas to and we can talk about it and say, “Hey, do you want a stand-up, say a cannabis-flavored version of Acumatica and Magento? Would you be interested in co-developing that with me?” I have that venue to have those ideas.
Acumatica pushes cloud ERP updates bi-weekly, but Flowers is dreaming about daily:
If I could somehow bring continuous deployment to ERP, I would. I’m not sure how to do it. I want to talk to Jon about how to do that. A daily ERP release? I’ve never heard of it being done. It might just be stupid, but that’s the kind of thing I like to explore.
Spoken like a true DevOps enthusiast.
End note: I wrote up this interview because the lessons are instructive across industries. I don’t partake in cannabis or alcohol, but I don’t believe in the criminalization of such users. Medical cannabis is promising for chronic pain, but I do not personally endorse the consumption of drugs for recreational use. I derive inspiration from the punk straight edge movement, though I have no plans to get a tattoo.
Image credit - Photos of Cuba Flowers at Acumatica customer panel by Jon Reed.
Disclosure - Acumatica covered the bulk of my expenses to attend Acumatica Summit 2017. Acumatica is a diginomica partner.