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A budding industry

A Budding Industry

Going green with cannabis tech

Now that most of the country has legalized medicinal marijuana - and several states have also OK’d it for recreational use - the legal weed industry is smoking hot. And there’s a whole new cannabis tech sector budding alongside it.
Legal marijuana was a $10.4 billion industry in the U.S. in 2018, according to economists at New Frontier Data, a leading cannabis market research and data analysis firm. Venture capitalists invested $10 billion into North American cannabis businesses in 2018, double what was invested in the last three years combined - and the combined North American market (weed is legal across Canada) is expected to reach more than $16 billion in 2019.
Cannabis is a unique industry that doesn’t have an exact blueprint to follow. It’s a mix of agriculture, medicine and retail, plus distribution and banking challenges that are different in every state since marijuana isn’t legalized at the federal level. And a different kind of business needs its own unique tech. Here are a few areas to watch.

Intelligent cultivation systems

The agriculture industry has been using AI and machine learning to monitor crop health and improve their harvests for a little while now. And in some ways, cannabis is like any other crop, with two key differences.
First, even though the market hasn’t fully stabilized yet, it’s a very valuable crop - so it gets top-of-the-line tech investment. Second, because it’s an entirely new industry, growers can start growing with a clean slate without worrying about integrating legacy tech - new greenhouses, new harvesting tools, new everything.
One company, Grownetics, places sensors on every greenhouse plant and uses machine learning to crunch massive amounts of cultivation data such as temperature, humidity, CO2, and nutrient recipes to optimize the yield and potency of each variety on a mass scale.

Delivery logistics

Not long ago, you had to send a local dispensary a copy of your driver’s license (and medical license if needed) and place an order over the phone. Now dispensaries are hooking up with delivery startups that can authenticate users, take orders online and deliver in the same time it takes to order a pizza.
The largest of these delivery services is California’s Eaze; it was one of the first to capture data about its users, their locations and their purchase preferences, which allows them learn more about who’s buying which products and how they’re using them. (Don’t be surprised to see Boomers and Gen X women in Eaze’s marketing materials - it turns out they’re two of legal cannabis’s biggest market segments.)
Look for even more detailed brand insights as cannabis delivery expands beyond the West Coast.

Seed to sale tracking

The cannabis industry is heavily regulated, and because it’s not legal at the federal level the regulations are different for every state. Some states track every milligram of cannabis to make sure it’s being distributed legally.
Businesses need to follow detailed rules, and even a minor slip up could lead to losing their license. Now several tech companies are offering seed-to-sale tracking solutions that make sure cannabis companies follow government compliance at every step of the supply chain.
Companies such as Soro, BioTrackTHC, Trellis and MJ Freeway assign each plant an original identifier, record its weight when it’s harvested, and log everything from pesticide use to sales information. They track customer information, too, to make sure every transaction is a legal one.

Specialized CRM

A handful of startups are exclusively focused on cannabis customer relationship management, helping dispensaries communicate with their customers, send out promotions and build brand loyalty while staying legally compliant.
Companies such as Baker, PipelineDeals and SpringBig feature customized data tracking and reporting features that comply with the widely-varying state and local rules.

Banking solutions

Banks are hesitant to accept money from state-legal cannabis businesses because they’re worried about accidentally violating federal money laws. Most are forced to work on a cash-only basis, which leads to all kinds of logistical issues and compliance risks.

Tech “ganjapreneurs” are growing new kinds of weed tech every day. Look out for part two of our cannabis tech coverage in the coming months.

Disclosure: Our site may get a share of revenue from the sale of the products featured on this page.

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