Blue Yonder Helps Cannabis Distributor 'Protect Profit' While Scaling

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California cannabis distributor HERBL has experienced explosive growth since launching its services concurrently with the legalization of recreational marijuana in the state. 

Between its individual growth and acquiring Nevada cannabis distributor and software company Blackbird, HERBL has seen revenue rise from $20 million to $200 million, scaling that HERBL executives believe was achieved through its partnership with supply chain solutions provider Blue Yonder and their AI-enabled product, Luminate.

Related: Pot o' gold? HERBL CEO outlines promise, struggles of marijuana distribution

"As the largest cannabis distributor in the largest markets in the U.S., we continue to source, implement and deploy leading technology solutions into our infrastructure to refine our processes and remain competitive and agile," Michael Beaudry, founder and CEO of HERBL, told FreightWaves.

"Blue Yonder's artificial intelligence and machine learning-enabled solutions integrated well into our highly scalable software stack, allowing us to reduce operating costs and boost productivity, which is vital when working in such a volatile industry," said Beaudry of the partnership that began in 2020.

A year later, HERBL and Blue Yonder announced the results of their partnership, showcasing a reduction in both operating expenses and productivity, as well as the use of Blue Yonder's Luminate solutions to learn HERBL's 850 retailers' demand and regulatory needs to manage full end-to-end operations of distributing a product that until recently was only available through the black market. 

"HERBL was challenged to manage explosive consumer demand growth that was putting a significant strain on our supply chain and our people. Supported by AI and ML, Blue Yonder solutions help us serve demand while making optimal decisions that protect profit margins. Because we can accurately visualize demand and strategically choose the best way to meet it, we've been able to reduce operating expenses by 20%," said Marc Sherman, chief information officer of HERBL.

Distributing heavy regulated products is not as simple as getting a truck and delivering on time. Cannabis' high value makes it incredibly attractive to theft, meaning deliveries must be made carefully with $125,000 secured cargo vans — assets that do not have the time to be wasted.

According to Sherman, using Luminate solutions, the cannabis distributor has been able to track and trace all products and customer inventory in the warehouse and better manage its delivery operations, leading to a 15% increase in overall productivity.

Along with its distribution capabilities, HERBL leverages Blackbird's e-commerce platform to provide data-driven insights to retail customers to leverage in sales, marketing and training resources.

By integrating these value-adding solutions with Luminate solutions, "we can increase the effectiveness of retailer displays and assortments, leading to higher revenues," explained Sherman.

While Luminate solutions have helped a number of companies with proactive insights into their supply chains, including appliance manufacturer Electrolux and multinational electrical distribution company Wesco, Blue Yonder's leadership was happy to see the solution's impact on a new, fast-growing consumer market.

Through use of the Luminate Platform and solutions such as warehouse management and demand planning, HERBL has achieved "accurate inventory visibility, strong data transparency and greater forecasting performance, which has provided growth potential for their retail and brand partners in turn improving the end-customer's retail experience," said Wayne Usie, executive vice president of market development at Blue Yonder.

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Image credit: Freightwaves

This post contains sponsored advertising content. This content is for informational purposes only and not intended to be investing advice.