What Competitors Get Wrong About Cannabis Costing

If you’ve looked at cannabis software lately, you’ve probably heard the same pitch over and over: “We track COGS.”

Dutchie, Distru, Canix, and other “enhanced inventory” systems repeat this claim endlessly. 

But here’s the truth: those are overstated claims and capabilities.

At best, these platforms track direct materials or, in some cases, direct labor + materials through a bill of material or labor. What they don’t capture are overhead, indirect labor, or indirect materials (representing 30-60% of total costs). Without those, you don’t have true Cost of Goods Sold.

MRP/ERP Systems: Closer, But Still Flawed

Traditional MRP/ERP systems (like NetSuite or SAP) do track all costs, but they come with complexity and inefficiency:

  • Direct Costs: Captured via bills of material & labor.
  • Overhead Costs: Applied through multi-level charts of accounts, often only to the department level – and pre-applied (using a single cost driver) before actual overhead costs are known.
  • Allocation: Overhead can be shoved inside bills, but this is usually inaccurate.
  • Task Management: Rarely included; if it exists, it’s an add-on and typically doesn’t capture costs.
  • Operational Data: Continuous process MRPs capture data like EC or pH (used in food industries like cheese-making) — but batch MRPs usually don’t, and they don’t translate well to cannabis.

In short: MRPs/ERPs are powerful but overbuilt for cannabis, and they miss cannabis-specific needs.

BatchNav: The Better Way

BatchNav delivers everything MRPs do — and more — with unprecedented simplicity.

  • Direct Costs by Batch: Like MRPs, BatchNav captures labor & materials through bills.
  • Indirect Costs at the Process Stage: Allocated at the closest possible point of consumption, instead of just at the department level.
  • ABC Cost Drivers Made Simple: Activity-Based Costing (ABC) is user-defined in BatchNav. While MRPs avoid ABC for being too complex, BatchNav makes it easy and practical.
  • Labor Tracker: Captures worker time by process stage — something MRPs don’t offer.
  • Operational Data Capture: Record data points like EC, pH, or other batch-critical inputs alongside costing.
  • No Chart of Accounts Required: BatchNav integrates with any P&L and updates to your reporting period (monthly, bi-monthly, quarterly).
  • Accurate Overhead Allocation: All overhead costs are allocated back to the period they occurred. Unlike MRPs, BatchNav doesn’t guess or allocate OH in advance.

Why This Matters for Cannabis Operators

  • Inventory systems can’t give you true COGS — they stop short at direct costs.
  • MRPs/ERPs can capture more, but they bury you in complexity, add-ons, and non-cannabis-specific processes.
  • BatchNav was purpose-built for cannabis. It captures all costs — direct and indirect — at the batch and process stage level, giving you clarity that’s audit-ready, accurate, and actionable.

The Bottom Line

Don’t settle for “COGS-lite” from inventory tools or wrestle with bloated ERP systems. BatchNav gives cannabis operators a manufacturing-grade costing system designed specifically for the industry.

Know your true costs. Batch by batch. With BatchNav.