Ep 25: Cut Costs, Grow Revenue: Cannabis Operators' 2027 Playbook — The Shift

Fresh off the conference circuit, Ashlee and Jen share how cannabis operators can cut costs and grow revenue in 2027 with nearshore back-office help.

In this episode

• Ashlee Austin hosts this episode in Filip's place, talking with Jennifer Munoz right after a run of industry events. Jen says the same two priorities came up at every show, coast to coast: generating revenue and cutting costs heading into 2027.
• Jen defines nearshore outsourcing as remote teams working in Serbia, Mexico and Colombia over Slack, email and US phone numbers rather than a ticket queue. She says HQ has done this for over seven years, so there is no ramp-up or training, and automation lets one person do what used to take three.
• Ashlee argues cannabis has been slow to adopt outsourcing because the industry is so specific that generic providers cannot keep up, and operators should not have to hand-hold the work. On AR, Jen says HQ collects as the client's own team and cites more than $40 million collected in year one for one MSO, and one client saving $12,000 a month while adding FTE capacity.
• On the retail and brand side, Jen describes overnight master data and vendor inventory management that she says can cut retailer costs by 30 to 40%, plus discount and price-compression tracking so sales reps are not doing accounting, accounts payable, and targeted Meta marketing for retailers.
• Inside sales works two ways, per Jen: HQ acts as a brand's house account, building mock orders from POS data for approval, or supports existing reps with analysts so they can get in the field. Both save commission or time and generate orders. Ashlee's takeaway: margins stay tight, so efficiency gains of 5% here and there are what operators control in 2027.

Chapters

• 0:00 — Ashlee hosts this episode
• 1:01 — Revenue and cost: 2027 themes
• 1:42 — Why outsource back office
• 2:57 — What nearshore means
• 5:11 — Cannabis-specific know-how
• 6:45 — AR collections results
• 8:58 — What sets our AR team apart
• 10:50 — Retail: data and AP savings
• 12:49 — Inside sales explained
• 15:00 — Work no one wants to do
• 17:00 — Efficiency wins in 2027

Transcript

Auto-generated from the episode audio and lightly edited for readability.

0:08 Welcome back to the shift. Now, typically I'm your host, but I had to step away for this recording. Taking over host duties for this episode is Ashlee, who's joined by Jen to dive into the key strategies, pain points, and trends driving cannabis operators as

0:28 they prepare for 2027. Together, they explore why cutting operational costs and generating revenue are top priorities across the industry and how nearshore outsourcing back office services like AR collections, inventory management, and inside sales

0:46 can help businesses scale efficiently without sacrificing quality. Let's pass it over to Ash and Jen. Jen, I know that you've been at a couple different industry events in the last few weeks talking with operators, hearing about pain points, and really just how they're planning to drive their business going

1:05 into 2027. I'm curious to hear what was like the biggest priority, biggest key theme that you were hearing when you were talking to these operators. Two main pain points, generating revenue and of course cutting costs. That's the thing I kept hearing over and over.

1:23 walking the haul flowers of New York, the Ignite in LA, same pain points. Feels like it goes coast to coast with those two main themes and really industrywide as a whole. So, knowing that these are the main key themes or priorities that operators are focusing

1:43 on moving into 2027 as they continue to grow their businesses, what's one main example or one of the biggest things that you can think of that can help with cutting costs um in a cannabis operation, any back office service. And I mean, number one, if you're not outsourcing

2:02 by this day and age, there's a situation. I mean, think about it, Ash. Kaiser is outsourcing, your bank is outsourcing, your cable company is outsourcing, everybody that is cutting costs and trying to generate more revenue are

2:20 outsourcing. I agree. And it's interesting that you see most of the major companies in any other formal industry, any of them that are set up to succeed, that are growing, that are scaling, are all relying on this sort of outsourced function in

2:38 order to really manage their business cost efficiently. And so I feel like for the cannabis industry, a lot of people don't even know what outsourcing really is. So maybe you could kind of go into what what even is outsourcing? what would you explain or how would you describe or define it to someone who doesn't really know that term or isn't

2:57 familiar with it? I mean in a nutshell it's having employees work in other countries. Um here at headquarters we are nearshore. What that means is we have our employees in Serbia and we also have our employees in Mexico, Colombia,

3:17 um you know in the outer um Hispanic states. Uh in a nutshell, it's doing remote work via the computer, via Slack, via a US American phone number. There's multiple ways that you can communicate.

3:36 I think that is one thing that I've heard as negative feedback is we take a ticket and we wait. Here at headquarters, we do not do that. We have multiple ways to communicate. We set up weekly meetings, bi-weekly, monthly, however our customer wants to

3:55 communicate. Um, also all of our employees have their own phone numbers, their own emails, and we also set up a Slack channel uh for constant communication at all times. Um, here also at headquarters, we have been doing this for over seven years. That uh is of

4:13 grave importance in a cannabis industry. You need to know what you're talking about. When you hire us, there is no ramp up. There is no training. We hit the ground running. We might need to learn your system, which we are very diverse. We've worked with just about every system there is whether it be

4:31 finance, whether it be order entry or whatnot. So knowing um all of these um systems really help you know and a lot of times Ash we also automate things and in this company we create um tasks that

4:51 help move the needle. instead of taking three people to do one thing, we can have one person do something um and create an automation to make it even faster. And I think that's what everyone is looking for right now. 100%. I think you touched on a probably an important factor in why the cannabis

5:11 industry has been a little bit slower to adopt kind of outsourced labor or third-party um kind of operations teams. And it's because the cannabis industry is so nuanced and so specific that a lot of these traditional outsourcing companies may not be able to keep up

5:30 with the actual industry knowledge that's necessary in order to perform a lot of these functions. And so that may very well be one of the reasons that the cannabis industry hasn't pushed forward and kind of formally adopted what is a fairly common concept in like I said any

5:48 other industry. So to your point, making sure that people understand the context of the work that they're doing and you're not having to handhold and micromanage the entire process in order to get the output, I think is an important factor if cannabis operators are going to decide to move forward with

6:08 whether it be outsourced and offshore labor or even third-party op uh you know contractors or ancillary services to perform some of these business critical function. functions. What is really really important and what I think you you know highlighted as a key value ad to headquarters of services being able

6:27 to actually come in with confidence on the process and confidence in the work and not need to be told how to do it but actually be able to come to the client with best practices on that specific workflow because it's something that they've experienced. Exactly. Exactly. Um, you know, a lot of

6:45 times people will ask me to describe how I can help their company, how I can generate revenue and cut costs. And I can give you a few examples with a couple of our different service departments. Um, for example, uh, we specialize in collections. Nobody likes to dial, but headquarters

7:05 does, and we do it well, and we do it across the United States. We have um MSOs that we work with on a regular basis and then we also have one brand. We uh don't discriminate. We collect for all. Uh it's phenomenal to see us collect over

7:24 $40 million in the first year for one of our MSOs. It's phenomenal to see where we have saved um a company $12,000 a month and actually added more FTE um to their bottom line because we act as if we are that company. You know, our

7:43 emails say collections at our employees react. We're calling on behalf of XYZ company. So, we're not a third-party hardcore collecting. We are acting as that AR service, collection service, and we're acting as that company.

8:02 And so you mentioned that collections is a major priority or something that you should be focusing on if you want to make sure that you have efficiency in your operation and have as much cash flow as possible. But I feel like most operators would say that they definitely

8:20 prioritize and focus on AR. Everyone would say that, right? I think it would be it would be concerning if someone said that they had no concern or prioritization of AR. But I think there's a difference between the work that headquarters does in the AR and collection workflow than what a lot of

8:40 these operators are typically executing inhouse. And it's not necessarily even just the prioritization, but the ability to organize, manage, and really just execute on the workflow consistently and making sure you have the ability to collect all the dollars possible that

8:59 are on the table. Whereas some of these other operators may be doing processes or workflows or have one person handling a portfolio much too large. and even if they're prioritizing it, it's not being done in a way that is producing the results they want. So, I feel like maybe if you could talk about a little bit of

9:18 like what differentiates our team's AR service from what some of these people might see from their internal AR specialists that they have. We've been doing it for seven years. So, we've figured out what I always say the secret sauce. Like, we've figured it out. We know how many times to call, how many emails to send, how many texts to do.

9:38 We've figured that out. We've also figured out the number of accounts. There's a sweet spot that we like to collect on. Sometimes there is a entire portfolio that we take over. So each individual uh state we also look at, you know, looking at how the process works for them. In some states we, you know,

9:57 we have a process where we will have a promise to pay and then they want to do a reorder. So we, you know, talk to the sales rep on Slack. Hey Ashlee, they want to create an order. Like that to me is a process, you know, of just

10:16 convenience, right? You're we are working as if we were them. A lot of times you won't get that in other companies. um with my experience and with the other experience of all the people here in the company uh there's a lot of cannabis knowledge so we kind of know already what needs to be done and

10:34 what the brand needs and you know the stories from the shops and the promises to pays that don't happen and we've just figured out that process and we do it well. Yeah. You know another you know opportunity Ashlee is just looking at the retail environment too. You know, I talk about collecting and brands a lot and because

10:52 brands are close to my heart, but even in the retail aspect, we've been able to cut costs tremendously. You know, we are taking over um what some people might call master data management and basically it's vendor inventory management that our night team is able

11:10 to work on. And so when an order comes in, um, the dispensary is ready, has all the documentation ready, everything matches what's supposed to be the picture and description, and there's a new shell created, things like that. Um, that most people have three or four

11:28 people doing that. We can have a service team do overnight and save again maybe 30 to 40% um, to the retailer. Um, another thing out of out of POS systems and metric, which we know no one wants to necessarily in. So, I mean, let's be honest, we do what

11:47 people don't want to do. I always tell everybody that, too. I mean, I have um in California, we have price compression and we have discounts and we have discounts that are going on with almost every retailer and it's just too much for the sales rep to do. You know, the sales rep's trying to build an order. they're trying to be out in the field

12:06 and now they're accountants. We've also created a a service where we're focusing just on those items for particular brands or service companies that you know so the sales rep doesn't have to worry about that. It could be done while they're doing their orders or while they're out on the field. Um, you know,

12:26 there's also accounts payable, which seems to be such a tough tough time for most retailers. Um, that we've also understand and also do really well. Um, there's just so many different avenues. We have marketing for retailers where we um use, you know, data to target

12:47 different, you know, maybe it's a pre-roll that's not selling, maybe it's a brand that's not selling, maybe it's someone hasn't been in in three months. So, we can do specific target marketing and also using meta. Um, we've also figured out the algorithm to where you're not getting yourself stuck. I think a lot of times

13:05 or suspended exactly is what was happening so many times and having to pay tens of thousands of dollars to get it back was ridiculous. So there's so many different avenues that we can save money um and time um there's also our inside sales piece uh and I can give you two ways in

13:25 which uh that would work for a brand. Yeah. What is inside sales? Define it or explain it to us. [snorts] So, uh, the way that I like to explain it is there's two ways. I can actually act as your house account. There are a lot of, um, again, California accounts

13:43 that have come to the point where they really need to bring some stuff inhouse. You know, the account's been established. It just needs to be managed correctly, and that's where we come in. So again, we've been building out POSOS uh mock orders based on data, provide

14:01 that to the person that we're reporting to, whether it be the owner, BPSLs, submit it back to them, and they submit it into approval. So I become the house account. I'm saving FTE and I'm saving commission. Um then there's the other way where I can enhance your sales reps.

14:19 I can help get them out, get to a more CPG because that's what we're getting to. We're getting to more, hey, get out, see the client, see what they need, upsell, warm and cozy, let me do the work. Again, I have analysts that build out these orders using POS data. So, you

14:40 don't have to do it. Um, they do it. Um, again, you're saving time. you're actually creating orders, so you're generating revenue and you know the sales rep gets to get out and it's not behind this computer all day long. Yeah, it seems like a general theme here is the work that you don't want your

15:00 internal team spending their time on. Not necessarily the work that doesn't need to be done because this is all business critical work. It needs to happen, but it's always the last thing on people's to-do list. Um, and it's below all of these other higher value ad actions that they could be taking, but

15:18 then at the end of the day, they still got to get behind their laptop and enter an order or go through the reports and, you know, come up with the the data backed a reorder report or dial for dollars and sit there for two hours and try to, you know, get collect or an invoice paid from an account that

15:36 they're trying to get an order closed for. So there's a bunch of work that needs to happen that no one wants to do, but that needs to happen. And what we're saying is you could have someone whose entire specialty or expertise or priority is that work. Imagine having someone where the only thing they want

15:55 to do is the stuff no one wants to do. Kind of seems like, you know, a business, right? Right. You know, I I have I try to let people know basically anything that has to do with cannabis, we can do. And I, you know, just giving different I mean, I had a call the other day from a CFO. I

16:14 need an audit. I need help with an audit. We jumped right in. And then we ended up taking over a majority of their work in their finance department. You know, it's kind of how that first starts is people try us um for one thing and then it just blooms into another. You know, I had one client that had no idea we did collections. you know, when I was

16:32 managing something else that they do. So, um, with almost over 150 employees and some of the most talented employees, I will tell you that, that I've ever seen. Um, it's pretty amazing where I can pick up the phone and go, "Hey, I need a developer, you know, for 90 days

16:51 or for six months." And we have that available, right? Uh, let's face it, things are very expensive right now. And people don't always want to hire a new FTE where they can come to us. Um, and chances are we've already built that data warehouse. We've already, you know, created something that they're looking for. And nine times

17:11 out of 10, our people probably can do it a little bit better. Yeah. So, I think that that's really what, you know, all cannabis operators should be looking to in 2027 is how can I add efficiency into the different areas in my business because margins are tight and they will continue to stay tight. So, there's only a certain number

17:30 of things in your control and operational efficiency is definitely one of them. So make sure you have the processes and the people in place. And you know, I think if you do that, you'll continue to see the same people who have won and continue to grow in 2026 do that

17:49 in 2027 because they are figuring out that unlock of where can I find the places to, you know, add efficiency into my workflows. 5% here, 5% there, and all of a sudden they have margins that they're happy with. Exactly. And you know, just to reiterate what you're saying, you know, if I came

18:08 to my boss today and said, "Hey, I can cut cost by 30%." He's going to be happy, right? And he's going to ask me how. And, you know, being able to have all these answers, which we do. Um, you also have to think of it from your own selfish, you know, I always tell people,

18:26 you look, would you want to put that on a resume? You know, cut cost by 30%. I mean, you know, let's let's be honest, you know, it's it's self-rewarding as well when you're able to cut costs and generate revenue at the same time. So, that is the dream. So, I know that you'll be headed to a few more events

18:45 this year in 2026 as we wrap that up and really looking forward to continuing to hear the conversations and the ideas that operators are having to uh you know really scale and grow efficiently in 2027 because they definitely are creative and problem solvers. So, definitely forward to more conversations

19:04 and you know getting to understand how operators are planning to tackle the next year. Yep. Awesome. Well, thank you, Jen. I appreciate it and looking forward to what you do in the next couple months as we finish up 2026. Stay tuned.