Supply chain risk is the exposure to reputational risk and financial loss an organization faces if it is associated with a negative supply chain event.

Certain products and services or supply chain management may pose a higher inherent risk. Products and services can cause risk to the commercial cannabis industry or to every commercial cannabis business in the supply chain because they are perceived to affect public safety or increase public harm. Supply chain management can increase risk to a commercial cannabis business because of the complexity of ownership, control, and liability.

Products and Services

Products and services span a significant spectrum of reputational risks due to corporate responsibility for public safety and reduction of public harm that increase supply chain risk. These risks are not confined to a particular commercial cannabis business but affect the industry as a whole. Risk management activities must be applied by every commercial cannabis business who participate in the supply chain for that product or service and may also be applied more broadly to participants in similar supply chains.

Supply Chain Management

Supply chain management is the management of the flow of goods and services, whether internal or external, and includes all processes that transform raw materials into final products. (Hayes, 2019) Supply chain management can increase financial losses because of the complexity of determining ownership, control, and liability. Risk management activities must be understood by every participant in the supply chain to properly manage the supply chain risk.