Greenhouse to Dispensary: Guide to the Cannabis Supply Chain

In 2023, the U.S. cannabis market was valued at USD 33.60 billion and is projected to grow to USD 38.5 billion by 2024. This booming industry relies on a complex supply chain that takes cannabis from cultivation to dispensary shelves.

Each stage—from growing and processing to distribution and retail—plays a critical role in maintaining product quality, safety, and regulatory compliance.

Stage 1: Cultivation

Cannabis cultivation is the first and most crucial step in the cannabis supply chain. Growers can choose from three primary methods of cultivation: 

Method 1. Indoor Growing

Indoor growing offers the highest level of control over the cultivation environment, allowing growers to regulate light, temperature, humidity, and CO2 levels. This method is ideal for producing high-quality cannabis year-round, but it comes with higher operational costs due to the need for artificial lighting and climate control systems. Indoor cultivation also allows for better security, as the entire process takes place in a controlled, enclosed environment.

Method 2. Outdoor Growing

Outdoor cultivation relies on natural sunlight and is the most cost-effective growing method. However, outdoor growing is subject to weather conditions and requires an optimal climate to ensure high yields. Growers must carefully select strains that are well-suited for the local environment and implement pest and disease control strategies. Outdoor growers typically harvest once a year, but they benefit from lower production costs compared to indoor methods.

Method 3. Greenhouse Growing

Greenhouse cultivation combines the best of both worlds by utilizing natural sunlight while allowing for partial climate control. Greenhouses provide more flexibility than outdoor growing and are less costly than fully indoor operations. Growers can control some environmental factors, like humidity and temperature, while still benefiting from sunlight. This method also allows for extended growing seasons and improved yields.

Stage 2: Harvesting and Processing

Once cannabis plants have reached maturity, the next critical step in the supply chain is harvesting and processing. These stages determine the quality, potency, and final form of the cannabis product that reaches consumers.

Harvesting Methods

The timing of the harvest is crucial. Growers typically harvest cannabis when about 70-90% of the plants’ trichomes (the tiny, resinous glands on the buds) change color, indicating peak potency. Most harvesting is done manually to preserve the delicate flowers, although some large-scale operations use automated harvesters.

After harvesting, the plants are either dried whole or are broken down into individual buds, depending on the processing method used.

Drying and Curing

Drying is a vital stage that involves reducing the moisture content in the cannabis to prevent mold while retaining potency. Plants are typically hung upside down in a controlled environment with consistent humidity and temperature to ensure proper drying. This process can take anywhere from 7 to 14 days, depending on environmental conditions.

Once dried, the buds are “cured” to further develop flavor, potency, and smoothness. Curing involves placing the buds in airtight containers and storing them in a cool, dark place. The containers are periodically opened to release moisture. Proper curing can take several weeks and significantly enhances the overall quality of the cannabis.

Processing Stage

After drying and curing, the cannabis undergoes further processing depending on its final form:

• Trimming: The dried buds are trimmed to remove excess leaves and stems, improving the appearance and smokeability of the product. Trimming can be done manually or with machines. Manual trimming is preferred for high-quality flower due to its precision.
• Extraction for Oils and Concentrates: Cannabis may be processed into concentrates such as oils, wax, or shatter. This involves using solvents (like CO2 or ethanol) or solventless methods (like rosin pressing) to extract cannabinoids and terpenes from the plant material. The resulting products are much more potent than dried flower and can be used in edibles, tinctures, or vaping products.

Light Manufacturing: Packaging and Labeling for Compliance

Light manufacturing is essential for cannabis packaging and labeling. Products must meet strict regulatory standards, including child-resistant packaging and accurate labels with THC/CBD content and safety warnings. This step ensures products are legal and safe to sell. 

At Paxiom, we provide automated cannabis packaging machines designed for precise and efficient handling of flower, edibles, and concentrates. Our solutions include pre-made pouch packers, form-fill-seal machines, jar fillers, and automated pre-roll systems, ensuring compliance and speed. For example, Swifty Bagger 3600 is ideal for high-speed packaging, handling various pouch styles and ensuring efficient and compliant operation.

Stage 4: Distribution

Distributors are responsible for receiving cannabis products from growers and manufacturers and delivering them to retail outlets like dispensaries. They also play a key role in quality control, ensuring that products meet regulatory standards before reaching the market. In some cases, distributors also package and label products, performing light manufacturing tasks to ensure that products comply with state regulations​.

Stage 5: Retail

Retail is the final stage of the cannabis supply chain, where products reach consumers through three primary retail models:

• Brick-and-Mortar Dispensaries: Traditional dispensaries are physical shops where people can walk in, browse, and buy cannabis products. These stores are especially popular in places where the cannabis market is well-established. Shoppers can talk directly to budtenders, who offer personalized recommendations, making the experience more interactive. Whether you’re looking for medical cannabis or something for recreational use, these brick-and-mortar dispensaries offer a hands-on shopping experience with plenty of product options to choose from.
• Online Stores: With the growth of e-commerce, many dispensaries have expanded their offerings online. Online cannabis stores allow consumers to browse products, place orders, and have them delivered directly to their homes where state laws allow. Online retailers may offer more convenience and discretion, especially for medical users who may prefer not to visit physical locations. However, online sales are subject to strict regulations, including verifying the buyer’s age and medical credentials​.
• Hybrid Models: Some cannabis retailers offer a combination of physical and online services. Customers can browse products online and either have them delivered or pick them up in-store. This model provides flexibility and convenience, accommodating different consumer preferences while maintaining the personal touch of in-store interactions​.

Streamline Your Cannabis Supply Chain with Paxiom’s Automated Packaging Solutions

In the cannabis industry, moving products from growhouse to dispensary involves many moving parts—cultivation, processing, distribution, and retail. Each stage comes with its own challenges, from climate control during growing to ensuring packaging meets strict compliance standards.

That’s where Paxiom comes in. With top-notch automation solutions for weighing, filling, packaging, and more, Paxiom helps cannabis businesses streamline these processes. Our technology ensures compliance and efficiency, letting you focus on delivering quality cannabis to your customers.

Simplify your cannabis supply chain and take your operations to the next level today.