Trade credit quietly powers the entire consumer packaged goods industry. Net 30, 60, 90. PALLETS move (not cases), shelves stay full, nobody demands a cashier’s check for a truckload of shampoo.
Why?
It works because an entire trusted CREDIT INTELLIGENCE ecosystem runs in the background, and has for over a century.
Here is how the grown-up version of this industry actually does it in other industries:
Comprehensive data. Agencies aggregate millions of supplier-reported payment experiences, financial statements, UCC filings, liens, judgments, and bankruptcies.
They don’t don’t talk about dollar volume, they talk about trade lines.
Predictive scoring. Models like Dun and Bradstreet’s PAYDEX and Reklaim Credit Solutions Credit Score quantify default probability and recommend limits and terms before a single product ships.
Not based on who paid yesterday, but who will pay tomorrow.
Integrated decisioning. Scores plug straight into ERP and order-to-cash systems. Approvals, limits, and exceptions handled automatically, in real time, during the sale.
Continuous monitoring. Profiles are watched. Deterioration triggers a review. Many layer trade credit insurance calibrated to the rated quality.
The result: LOWER BAD DEBT, tighter DSO, consistent terms, and the confidence to scale.
Now hold that picture in your head, and walk a cannabis trade show floor.
A distributor extends a new dispensary 30 days on a five-figure order because the buyer loved the product and you’re there to sell, sell, sell.
There is no credit score. There is no suggested limit. There is no monitoring.
The “credit check” was a conversation after a dab in the middle of a scrum.
The product moves at a velocity that would make a CPG operator weep with joy. But, the payment terms are enforced by hope. All of a sudden, 40% of the receivable is now “pending,” which is industry Latin for ‘gone’ and the buyer is still looking for more inventory.
This is not a knock on operators.
It is a knock on the fact that the infrastructure every other consumer industry takes for granted simply was not built for this one. Federal status scared off the legacy agencies or the industry was too small.
So cannabis got high inventory velocity and zero credit intelligence, the worst possible combination.
That is the gap. It is finally getting filled.
If you are an operator, distributor, or finance lead in cannabis: how are you deciding who gets terms today?
Be honest.
We have all met the dab bar credit committee.