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Established to address the supply chain challenges in the industry, MainStem, an end-to-end supply chain solution with an integrated marketplace, is successfully helping cannabis companies streamline the management of their supply chain. At the center of the MainStem ecosystem is their embedded marketplace of ancillary supplies, which is accessed through their SaaS platforms, Purchase Pro™ and Supplier Core™. While the former is a procurement platform that helps organizations centralize their purchasing processes, saving time and money, the latter is a portal that helps vendors sell their products directly to cannabis operators. MainStem is dedicated to redefining the cannabis supply chain, leveraging innovative technology to digitally connect buyers and sellers across the industry.
In this interview with CIO Applications, Alen Nguyen, CEO of MainStem, discusses why cannabis companies should use MainStem platform to streamline their supply chain. MainStem was founded in 2014 by Alen Nguyen and Long Nguyen two cousins who had the vision and foresight to solve a massive gap in the commercial cannabis industry supply chain. Combining Alen’s experience in infrastructure and supply chain with Long’s knowledge of the cannabis market, they initially co-founded MainStem as an ancillary supply distribution company. Over the years, they evolved the scope and sophistication of their offering, and ultimately, the integrated purchasing platform was born.
What were the founding factors that led to the conception of MainStem?
In 2012, Washington became the first U.S. state to legalize marijuana. My cousin and I had the vision and foresight to solve a massive gap rising in the commercial cannabis supply chain, laying the foundation for what would become the MainStem of today.
Initially, MainStem focused on just two states in the country where recreational marijuana sales were legalized. Over the following years, eighteen more states legalized cannabis products, adding more complexity to the supply chain. Consequently, we adapted our purchasing platform to meet current and future market needs. However, our mission has always remained the same to solve the supply chain challenges for the cannabis industry.
What are some of the typical challenges MainStem's customers face?
Despite being a new industry, cannabis has made significant strides in the last few years, but many operators still have a start-up mentality about their business processes. The complexity of the industry comes from the strict legal framework for controlling the production, distribution, sale, and possession of cannabis. Each legalized state has mandated its own rules and regulations related to cannabis, which makes running the business in multiple state difficult to navigate.
MainStem innovates at the speed of cannabis. By connecting operators and suppliers within our supply chain ecosystem, we solve the challenges cannabis businesses face, while streamlining fragmented finance and operational processes
What benefits do cannabis companies and suppliers gain from MainStem’s integrated platforms?
With MainStem's integrated purchasing platform, operators receive a holistic and transparent view into an entire organization's spending. This way, they can ensure better purchasing decisions and implement standard procurement procedures. Organizations can reduce time spent searching for materials and streamline their entire ordering process through our integrated purchasing platform. MainStem enables companies to evaluate total spending, identify areas of cost savings, and place controls on future purchasing. In addition, the platform provides the ability to automate supply orders using a centralized vendor network, reducing human errors, and provide significant time savings. By strategically implementing the MainStem purchasing platform, cannabis companies can improve their bottom line on overall COGS spending. By providing access to more than 12,000 ancillary products from over 485 brands, MainStem allows cannabis operators to find the best price on supply while also streamlining the fragmented finance and operations technology ecosystem. Our integrated purchasing platform leverages smart technology to help organizations leverage a leaner company spend model. For example, MainStem allows operators to source materials strategically by comparing hundreds of vendors and centralize their ordering process. By accessing the Marketplace through the Purchase Pro™ platform, operators can incorporate intelligent purchasing strategy and take advantage of integrations into accounting platforms and business tools. This allows users to control product purchases, set permissions, build compliant catalogs, and keep all the organization’s purchases in one centralized repository. On the other side of our supply chain solution is Supplier Core™, a portal which allows suppliers to easily list and sell their products on our Marketplace. This offering helps suppliers browse open RFQ's and submit bids in real-time to customers. Most of our suppliers opt for our easy-to-use integrations into their e-commerce or ERP software (like Shopify, WooCommerce, EDI, and more) for real-time syncing of products, pricing, and availability.
Could you share with us an instance to highlight the benefits brought to one of your clients after implementing the MainStem platform?
A multi state operator that owns over 18 locations started using our platform. The client lacked a strategic procurement process which led to confusion, inefficiencies, and unexpected expenses. More importantly, the procurement manager was spending unnecessary time sourcing the materials. MainStem deployed the integrated purchasing platform, Purchase Pro™, to provide the client with a holistic and transparent view into their entire organization’s spending. This way, the client could make better purchasing decisions as they understood the true demand and spending in real time. On average, with Purchas Pro™, this client saved up to 20 percent on individual purchases and 10 percent on overall company spending.
What does the future hold for MainStem?
We will continue to focus on the operational challenges of our clients. We have identified the stages of business maturity that most cannabis companies follow, and using our in-depth understanding of the cannabis industry, we are developing our software to best meet the needs of our customers. MainStem provides a solution for all stages of growth within the industry, from newly established operations to multi-state operators who require more sophisticated tools. As the only enterprise level supply chain platform built for the cannabis industry, we support operators as they grow, and ultimately provide mature businesses with the tools and data to make strategic business decisions, whether they are a buyer or a seller. We are innovating at the speed of cannabis and are focused on bringing advanced technology practices to a rapidly maturing industry by continuously refining solutions to meet their supply chain management needs.