Releaf Magazine
15Sep/160

Legal Cannabis Market Projects Huge Numbers

13182119-mmmainCannabis Industry Expected to Be Worth $50 Billion by 2026

Bloomberg Markets - Jennifer Kaplan - 09/12/2016

The legal cannabis industry in the U.S. may grow to $50 billion in the next decade, expanding to more than eight times its current size, as lawful pot purveyors gain new customers and win over users from the illicit market, according to a new report.

Legalizing recreational use in California, where the drug is already medically permitted, is on the ballot in November, and approval of that measure alone would triple the size of the nation’s current $6 billion legal industry, according to a report from 10 Cowen & Co. analysts released on Monday. In all, voters in nine states will vote on weed-related initiatives this November -- five to legalize the drug for all adults and four to allow for medical use.

Pot already is legal for recreational use in Alaska, Colorado, Oregon, Washington and the District of Columbia, and is medically permitted in 25 states. Cowen’s forecast assumes federal legalization of the drug, a measure that has more than 50 percent popular support.

“Cannabis prohibition has been in place for 80-plus years, but the tides are clearly turning,” the analysts said.

Expanding Industry

The expanding industry will affect big business even though the current competitive landscape is largely made up of smaller startups. Because the plant is still federally illegal, large companies have shied away from getting involved.

Legal weed would be a major opportunity for Big Tobacco, Cowen said. Vapor technology -- a popular technique for ingesting both tobacco and cannabis -- is an essential part of tobacco’s less combustible-dependent future. Companies like Altria Group Inc. and Reynolds American Inc. already have expertise in vapor and crop-growing technologies, as well as familiarity dealing with complex regulatory frameworks.

Tobacco companies may make up about one-fifth of the cannabis industry by 2036, adding more than 20 percent to their revenue, and nearly doubling tobacco’s underlying growth, the analysts said.

For alcoholic-beverage makers, legal marijuana is more foe than friend. Alcohol consumption has declined over the past five years, especially with men, while cannabis use has risen. The number of drinkers who also used marijuana increased, and the number of cannabis users who drank decreased, Cowen said.

For both the potential winners and losers, the scale of the changes to come are unusual, the analysts said.

“A 24 percent, 10-year revenue compound annual growth rate is hard to find in consumer staples, in particular one with a $50-plus billion end-point,” Cowen said.

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25Aug/160

This is huge leap forward for all in the industry

marijuana-leaves_largeNation's First Online Cannabis Trading Platform Set to Revolutionize Industry

PR Newswire - 08/24/2016

CannaFo.com Trade Desk Offers Seamless Connection for Marijuana Producers, Processors, Dispensaries and Retailers

BEND, Ore., Aug. 24, 2016 /PRNewswire/ -- The nation's first online cannabis trading platform is set to revolutionize the industry. CannaFo.com offers Trade Desk, an online trading platform that seamlessly connects marijuana producers, processors, and dispensaries.

"It's difficult for growers and retailers to find each other. What we offer with Trade Desk is seamless connection," explained CannaFo.com President, Kelly Martin. "We are advocates for the cannabis industry. We are trying to help and improve it, as we can, through technology."

While the cannabis industry is one of the fastest growing in the nation, there has been a lack of a trustworthy platform allowing cannabis business owners to connect and develop strong business partnerships with other vendors. Laws vary in each state, and no centralized source, such as Craigslist, previously existed. Trade Desk is primed and ready to change all of that.

CannaFo's Trade Desk platform provides connection opportunities in four sections: Connect, Buy, Sell andPricing. Together they work to allow producers, processors and dispensaries the time to focus on their businesses, rather than hunt for connections.

The Connect section brings producers, dispensaries and seed companies together. It provides listings, names and contact information, and an anonymous chat system for added security.

For those looking for product, there is the Buy section. Buyers may browse through available inventory and connect with the seller directly. The Sell section allows producers to list inventory available to businesses, whether they have already connected or not.

CannaFo has created the cannabis industry's first transparent open market. The Trade Desk Pricing section provides up to date listings of the average pricing based on location. Variations in price do not affect most consumers, but when purchasing for wholesale, finding a fair price is crucial.

Trade Desk is a subscription-based table platform. The subscribers will have to demonstrate proof of license, in order to participate. CannaFo.com developed Trade Desk to be used on a state-by-state basis, as there are no current Federal guidelines to follow, and laws differ between the states. CannaFo is excited about Trade Desk, and offering its services free for sixty days to new subscribers.

There is also an app for that! The CannaFo app is tablet-supported, as well as IOS, Android and Blackberry. Access is important to CannaFo, and they intentionally programmed the app to be available to anyone, no matter their device. According to Josh Pardee, Co-founder/Lead Engineer, "There is simply no device that can't access the info."

About:
CannaFo.com, headquartered in Bend, Oregon, is the world's largest online resource for all things cannabis. The site provides a comprehensive directory, marketplace and social platform for cannabis consumers, businesses and growers/producers. While only less than a year old, CannaFo already has over 90,000 followers on Facebook and continues working to build their following and help improve the industry they love.

Get in the know, with Cannafo!

Contact:
1558 SW Nancy Way Suite 104
Bend, Oregon 97703
541-640-8135
info@cannafo.com

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23Aug/160

Canna Tech Innovation Booming

lacontes-100677471-largeHigh technology: How tech innovation is fueling the budding cannabis industry

PC World - Katherine Noyes - 08/22/16

The cannabis industry is growing up, and it would be tough to imagine more convincing proof than Microsoft’s recent announcement that it’s getting involved.

Though the software giant will stay very much in the background—its role will focus primarily on providing Azure cloud services for a compliance-focused software push—the move is still widely viewed as a telling sign.

“Having them come out and say, ‘we’re willing to have our name in the same sentence as the word cannabis,’ adds to the legitimacy of our industry,” said Kyle Sherman, cofounder and CEO of software maker Flowhub.

Stigma is a longstanding problem for those trying to run a legitimate business in the cannabis industry, thanks largely to the fact that marijuana remains illegal in the U.S. federal government’s eyes. Twenty-five states have already passed laws that allow for some degree of medical or legal use, but that can be cold comfort for entrepreneurs unable to get a bank account because of lingering concern.

Yet there’s no doubt of the profit potential. Legal cannabis sales brought in $5.4 billion in 2015, and $6.7 billion are expected this year, according to a February report. By 2020, the forecast is $21.8 billion.

Startups are now jumping in to help make that happen, and technology is playing a central role.

Historically, technology has been used minimally in the production and sale of cannabis, largely because of legal concerns.

“It has been not just minimal but actively avoided,” said Mike Bologna, founder and CEO of Green Lion Partners, a business strategy firm focused on the regulated cannabis industry.

Bologna predicts that technology’s growth in the industry will eventually outpace the growth of the industry itself, and over the past year he’s started to see signs that things are picking up.

Today, there are not only a raft of agricultural and security technologies used on the growing end, but also tools ranging from dispensary robots to APIs to help sell cannabis in a way that’s convenient, transparent, and compliant with regulations.

Flowhub, for instance, offers a seed-to-sale tracking platform for growers and retailers, with a particular focus on compliance. Founded in 2015, the Denver-based startup offers a mobile device for scanning RFID plant tags, a point-of-sale (POS) system for dispensaries, and a cloud-based software-as-a-service (SaaS) platform that’s accessible via web or iOS. It currently serves customers in Colorado, Alaska, and Oregon.

Essentially, the goal is to track every plant, product and person associated with the production and sale of marijuana and maintain legal compliance.

Flowhub’s POS system reports to states’ compliance tracking systems automatically using application programming interfaces (APIs), replacing what used to be a laborious manual process. The company has also opened up its platform’s APIs to other entrepreneurs, giving them a way to write apps that use Flowhub data, such as for loyalty programs.

“Our goal as a company is to legalize cannabis responsibly in North America and eventually the globe through technology,” Sherman said. “Regulators need to see that it’s better to keep cannabis off the black market by making it traceable. We want to show the world this can be done responsibly.”

La Conte’s Clone Bar and Dispensary in Denver saves countless hours by using Flowhub to maintain compliance with Colorado regulations.

“Before Flowhub we had to manually upload data to the state every night,” said Zach Howell, supply chain manager for the store. “That meant taking screenshots of spreadsheets and cutting and pasting. It was a lot of work.”

Today, all sales data for the day can be uploaded automatically into the state’s database in a single step. The system also gives La Conte’s a live, real-time view of its inventory.

Upon entering the dispensary, customers have their ID scanned both for their date of birth and for their state of residency. That process checks them into La Conte’s system, so that when they’re ready to make a purchase, there’s no uncertainty about what they can buy.

In Colorado, out-of-state residents are not allowed to buy more than an ounce of marijuana, for instance. It used to be up to employees to quickly figure out what combination of products—flowers, edibles, and so on—adds up to that much. Now Flowhub’s system does it automatically.

“If we know your ID is from out of state, it locks the transaction if you go over an ounce,” Howell said. “They’ve basically put the regulations into a system that forces users to play by the rules.”

Howell, meanwhile, can tap into Flowhub’s system and handle any problems remotely. “If I’m on a plane and a manager calls to say we’re out of something but have it in back stock, I can move it into their inventory for them to sell.”

The technology is enabling many of the same processes and capabilities that have long been standard in other parts of the retail world but adapted with an industry-specific twist. As the cannabis industry grows and matures, that trend promises to continue.

“When I first started in this industry, it was a bunch of people who knew how to grow weed but had no business sense whatsoever,” Howell said. “Today the big companies out there are starting to get accountants and HR departments. The companies that are surviving are saying, ‘we need a CEO, we need a business model, we need a plan. We need technologies to streamline our processes and make sure we’re compliant.’”

Those are important steps because eventually, cannabis will become a commodity, said Green Lion’s Bologna. When that happens, success will favor those tapping efficiency-boosting best practices and tools already commonplace in the rest of the business world.

“A lot of people like to put us in our own bucket, but we are starting to use all the standard tools,” Bologna said.

That’s definitely the case at GreenRush, an e-commerce platform for medical marijuana delivery. GreenRush partners with local U.S. dispensaries and delivery services and helps them acquire customers through its online platform.

“We’re like the GrubHub of the medical marijuana industry,” said Paul Warshaw, GreenRush’s founder and CEO.

Customers who land on the site can browse dispensaries and products; with a verified medical marijuana card, they can order products for delivery by a dispensary near them. California-based shoppers who don’t have a medical marijuana card can even consult with a doctor via GreenRush’s telemedicine platform and get approved for one on the spot.

Though much of GreenRush’s technology was built in-house, the company has tapped a number of common tools to propel its business. A partnership with Salesforce, for instance, helps with sales management and customer support.

“We’re a sales organization,” Warshaw explained. “Everything starts with outreach to the dispensaries.”

The company has also integrated with DocuSign for its membership agreements, MailChimp for email marketing, and Slack for communication with dispensary partners.

“It’s great that people are building technologies specifically for cannabis, but there are awesome platforms already out there that can help make your business so much more efficient and transparent,” Warshaw said.

As the industry matures, that kind of fine-tuning may become an imperative.

Owing in part to the high prices set during the industry’s black-market days, more than 80 percent of the businesses that get started in the legal cannabis industry break even within a year, said Leslie Bocskor, founder and president of Electrum Partners, an advisory firm focused on the industry.

Such rapid profitability is “unheard of,” Bocskor said.

It also poses what may be one of the industry’s biggest challenges in the days ahead.

“High margins can cover up a lot of mistakes,” Bocskor said. “Businesses can’t get comfortable—they need to start using best practices regardless of their profitability, and technology is a big part of that.”

Banking remains another obstacle for many in the industry, as financial services firms remain skittish about serving cannabis-based businesses.

“The average cannabis business can’t bank like a normal one would,” GreenRush’s Warshaw said. “Not everybody wants to work with you.”

There can even be issues for cannabis companies trying to advertise on sites like Google or Facebook, or to make apps available online. “Things you wouldn’t think of are challenges that we have to overcome,” Warshaw said.

Looking ahead, the effort and funds now being poured into the cannabis industry could create jobs and tax revenue and fuel innovation for years to come.

“It’s no longer some guy in a warehouse where they roast coffee to cover up the smell,” Electrum’s Bocskor said. “All this money is driving innovation that will affect agriculture around the globe.”

Said Howell, “We’re not just growing weed to sell weed anymore—it’s a business.”

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