Cannabis Grading Systems and Wholesale Marketplaces

by | Nov 26, 2020

The legal cannabis industry has experienced an explosion of interest, spurring industry innovation. But it has also been fraught with challenges from exorbitant expenses and taxes to banking hurdles; cannabis entrepreneurs and businesses have had to face ever-changing hurdles. For both suppliers and buyers, navigating wholesale cannabis transactions can be tricky, especially with the lack of transparency and standardization in most wholesale cannabis operations.

Why is Standardization Important?

According to many in the industry, standardization is the future of the cannabis marketplace. Plant standardization is a hot topic in the contemporary cannabis marketplace, which is even more apparent in the wholesale market.

Pharmacological medications typically have a fixed chemical structure. This makes standardization somewhat simpler. The cannabis plant does not have a fixed molecular structure and contains hundreds of substances that vary in chemical structure. Two of the more familiar compounds, THC and CBD, are just two of these. But what does this signify for plant standardization? Each cannabis plant will be unique and have a unique composition- much like a fingerprint.

Compliance: How can Wholesale Software Help?

Compliance is one of the significant challenges for every cannabis business, especially with the discrepancies across borders and state lines. Staying compliant with business operations is a significant factor for all businesses, whether buying, retailing, or cultivation operations.

Creating and adhering to a compliance plan can become tedious and time-consuming- but it has to be done. This is where software can step in. Using specifically designed software to assist in wholesale transactions, businesses can also ensure they stay within compliance for essential factors such as cannabinoid profiles and possible contaminants.

Wholesale Marketplaces

One of the prime problems faced when dealing with wholesale cannabis is the lack of testing and quality assurance. Companies such as Confident Cannabis, Big Tree, and Canntrade seek solutions to smoothen and maximize the wholesale cannabis operation. There has been a recent uptick in innovations with the problems that come with wholesale cannabis in mind. Let’s take a look at some of the existing systems.

Confident Cannabis has developed software tools for businesses to test, sell, and buy wholesale cannabis. The platform was created to help streamline the process for all involved parties by offering a database for all in the supply chain (whether cultivator, retailer, or wholesaler) to make decisions based on data. This data is a collection of cannabinoid profiles, terpenes, lab results, and even pricing. The software platform helps potential buyers to make an educated decision and know precisely what is in the wholesale plant matter being purchased.

Canntrade offers a dynamic approach to the cannabis wholesale marketplace. The company’s software prompts matches between buyers and potential products they may be looking for, and they only include verified buyers.

Tamerlane Trading is among the leaders in cannabis trading systems and is a leading cannabis marketplace with built-in brokerage services. Tamerlane developed a system that can assist all operators across the cannabis supply chain by providing complimentary grading services through a sister company, Big Tree, to verify the quality of cannabis, increasing transparency and trust, while ensuring buyers a trustworthy transaction.

One key feature of this software is the grading standard and process used to classify and organize all types of cannabis and hemp material. Cannabis Tech had a chat with Jhavid Mohseni, CEO of Aperon (parent company of Tamerlane Trading and Big Tree), to find out more about the innovative cannabis grading software and how it empowers trading platforms and marketplaces.

Grading Systems and Objective Analysis

Aperon’s software platform and Big Tree’s grading system resulted from the need for standardized trade, starting with the implementation of the grading system in the cannabis wholesale marketplace. The data collection process is based on infield grading specialists, lab partners, buying requirements, growers’ requests, transactional market data and pricing from an appraisal engine. Big Tree is certified to use the International Cannabis and Hemp Standards (ICHS), which creates a common language that infuses trust and transparency into each lot of material and helps to speed up transaction volume with the use of the appraisal engine, powered by the broker company, Tamerlane.

From a quantitative approach, the following factors are considered when determining cannabis grading:

  • The type of environment, product & process the material has been put through.
  • Indoor/Outdoor
  • Type of bud, i.e., A, B, mix, or trim, and the types of processes used to get the dried bud into its current state.

The different combinations of these three attributes create more than 120 specific product types, hinting at the expansive database Big Tree is offering the marketplace. More points can be added. For example, a plant will not merely be an outdoor processed plant. A potential wholesale buyer can choose between plants cultivated with living soil or a cocoa pellet mix. This stretches across all types of growing techniques and methods; and includes products used during the cultivation process.

Further quantitative data is used to determine product type, including lab results. However, these lab results do not increase or decrease value. All gathered information is to demonstrate specifics about the plant material. This is an objective approach to a market that has been primarily led by subjectivity.

Qualitative analysis is based on four primary characteristics:

  • Color
  • Plant structure (including bud structure)
  • Trichome coverage
  • Aroma

The technology brought to the marketplace through Big Tree’s software is a refreshingly objective take on cannabis grading. By offering simple and objective grading systems, the market itself can dictate the value.

Each analysis is batch-specific. Big Tree’s system can get sales and transactional data from brokers at Tamerlane to drive a pricing engine that takes and aggregates all the information and calculates pricing based on grade, market average, qualitative and quantitative qualities. Helping potential investors and wholesalers get real-time, reliable pricing models. This type of system allows transparency for sellers and buyers. Sellers can then decide how much they want to sell their bud for, based on the information provided. What’s more, Big Tree is Fair Market Certified, which means the focus is on paying farmers a fair market value- allowing them to thrive in a challenging environment.

Transparency helps both facets of the cannabis operations by encouraging consistency and reliability in a marketplace that requires these initiatives to drive a sustainable and healthy cannabis industry. Technologies and innovations such as these prove vital in advancing our understanding, compliance, and safety in the cannabis marketplace.

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