Artificial intelligence (AI) could contribute up to $15.7 trillion to the global economy by 2030 according to PWC, and on a daily basis, automation, artificial intelligence, and machine learning are becoming commonplace in the cannabis industry as more innovative technology is launched across the supply chain.
Marijuana sales and ecommerce is just one stop on the path from seed to sale where artificial intelligence is having a significant effect. From speeding up processes, reducing errors, and saving money, artificial intelligence is changing the way marijuana businesses operate and sell.
However, integrating artificial intelligence into the cannabis industry isn’t without its challenges. Let’s take a closer look at some specific ways artificial intelligence is impacting the cannabis supply chain and the primary obstacles cannabis businesses face from the growth of automation, machine learning, predictive analytics, and artificial intelligence.
Ecommerce Personalization to Increase Sales and Revenue
In recent years, artificial intelligence and machine learning have become essential to ecommerce businesses that want to display the most relevant products and services to customers when they visit companies’ website. When artificial intelligence is working behind the scenes to match visitors to the items they’re most likely to purchase and displaying those items in real time, sales and revenue will increase.
It makes sense that marijuana businesses would want to leverage the power of artificial intelligence to boost their own sales and revenue. For example, when Namaste Technologies, purchased Findify last year, it seemed like a natural fit.
Namaste Technologies is a leading seller of medical cannabis consumption devices and through its CannMart brand’s sales-only marijuana license, the company offers a variety of medical cannabis products on its website that are sourced from both domestic and international producers.
Findify offers artificial intelligence powered ecommerce personalization and delivery solutions, including personalized search, product recommendations, and advanced data analytics to online retailers. Using Findify’s artificial intelligence and machine learning technology, Namaste Technologies can recommend the most relevant products to consumers when they’re looking to make a purchase thereby increasing conversion rates, order value, and customer retention.
Apps, Chatbots, and Websites to Improve Customer Service
A growing number of apps, chatbots, and websites are launching to help marijuana customers find the products they need. This helps marijuana businesses improve sales and customer relations online as well as in brick-and-mortar dispensaries and retail locations.
Potbot is a mobile app available in Apple’s App Store and the Google Play Store that uses artificial intelligence to sort through more than 30,000 cannabis strains, read peer-reviewed medical journals to analyze studies on cannabinoids, and pair that information with 37 symptoms, such as asthma and insomnia, to find which type is best to treat the specific condition.
Last year, Global Cannabis Applications Corp. (GCAC), a data technologies development company for the cannabis industry, announced its plans to launch Sanna, which is an artificial intelligence chatbot. It’s a modern form of customer service that consumers are already familiar with in other industries. With the chatbot, marijuana customers can access medical marijuana information and personalized product recommendations based on their symptoms.
Using more than 10 years of customer interactions from CannaReps’ Canna Help Deck, machine learning, and natural language processing, the Sanna chatbot processes and understands what’s happening with medical marijuana patients in real time and provides them with the most appropriate information and recommendations to make their purchase decisions.
Marijuana customers can also visit the BudGenius website to find the right marijuana product for them. BudGenius uses cannabis test results from its own testing facility to gather data about each marijuana strain, and using artificial intelligence technology, it merges that data with scientific trial data and real patient user experiences.
Machine learning allows BudGenius to improve each time a new scientific trial is released, and each time a patient submits a product review. Dispensaries can also use BudGenius to help their patients choose the best products. Again, it’s a way to provide enhanced customer service that should help to increase sales and customer satisfaction.
Post-Sale Delivery to Boost User Experiences
Artificial intelligence is also impacting the marijuana industry after sales are made. For example, Starship Technologies is piloting wheeled delivery robots in London, which could make marijuana deliveries based on algorithms. This type of delivery would ultimately be more cost-effective and efficient for marijuana companies.
Sales and Business Data to Reduce Investment Risk
Since sales play such a vital role in a marijuana business’ success, it’s important to consider how artificial intelligence is affecting investors in the marijuana industry.
Predicting Cannabis Stock Changes
VantagePoint, a software company offering programs that predict stock market changes, integrated cannabis stocks in the United States and Canada into its platform this year. Using artificial intelligence, VantagePoint identifies patterns in the data that can be used to make more accurate forecasts and investment decisions.
Assessing Business Risk
Adherence Compliance, which offers a mobile and cloud app for marijuana regulatory and financial compliance, launched artificial intelligence, predictive, and machine learning algorithms last year to help marijuana business stakeholders assess business risk. The artificial intelligence uses compliance data to predict which categories a marijuana license holder is most at risk to fail in.
Challenges of Artificial Intelligence
Businesses operating in the cannabis industry experience similar challenges when integrating artificial intelligence into their operations as businesses in other industries do. The three primary challenges are related to people, data collection, and data reliability and security.
The companies that can successfully navigate these changes will be positioned to exploit the benefits of artificial intelligence, automation, and machine learning for growth and cost savings.
With new technology, including technology that uses artificial intelligence, there is an employee learning curve. For businesses, this equates to training costs and possibly hiring costs if the required talent (or willingness to learn and use the artificial intelligence technology) isn’t already on staff. Many companies could see significant training costs as well as unavoidable employee turnover when artificial intelligence technology is implemented.
Data Collection Challenges
Artificial intelligence technology requires data in order to successfully integrate it into a business’ daily operations. For many companies, finding the budget to collect, standardize, and effectively index this data is a big problem. However, the benefits of doing so are worth it in the long-term.
Data Reliability and Security Challenges
Data is often only useful if it’s current, and for many businesses, continuously collecting data to ensure it’s reliable for decision-making presents a significant challenge. In addition, privacy and security concerns add another layer to the complexity of managing artificial intelligence technology used in business operations.
Despite these challenges, artificial intelligence technology is the future, and cannabis businesses that begin integrating it into their operations could set themselves up for great success in years to come when competitors that have yet to leverage artificial intelligence technology fall behind.
Artificial intelligence and machine learning are becoming critical components of a marijuana company’s business strategy and with good reason. It delivers measurable benefits through increased productivity and improved employee decision-making.
Furthermore, the data used in artificial intelligence technology enables businesses to deliver more personalized consumer experiences as well as higher quality products and services. This is true in the cannabis industry as it is in other industries that leverage the power of artificial intelligence.
One thing is certain, if a company has access to artificial intelligence, it has a significant competitive advantage in the marketplace over companies that do not have the same (or better) predictive, real-time data.
Originally published 6/7/18. Updated 2/1/19.