Tech is transforming the aboveground marijuana industry
Alex Blumenstein, 28, never thought he’d one day end up working in the marijuana business. In his previous job, the entrepreneur worked as a consultant dealing with corporate clients like airline companies and land developers. It was a world he was familiar with and a job he was successful at.
“I was good at it, but it was very unrewarding work. Even when you did win [for your client] it was only incremental gains,” he explains.
But, all that changed in 2017.
Earlier this year he launched a new business inspired by consulting work he did for a local marijuana company. While there are ample opportunities for big firms, support for small-scale entrepreneurs was non-existent, he found. So, he decided to take a chance and build something that did.
Now the twentysomething is the co-founder of Leaf Forward the first cannabis business accelerator in Canada. It helps founders turn their their weed-related ideas into reality.
Since launching in January, Leaf Forward has mentored a handful of startups. It’s also hosted meetups with some of the industry’s’ biggest players and partnered with leading cannabis organizations across the province.
“There’s a lot of opportunities for startups in the marijuana industry outside of just cultivation. Currently the industry is driven by licensed producers [government sanctioned weed cultivators] but it’s the technology, ancillaries and value-added products that will drive real rewards,” he says.
The rise of the weedpreneur
Entrepreneurs aren’t waiting around to find new ways to invest in what is expected to be one of North America’s fastest-growing industries. Many are already cashing in right now.
Big deals south of the border include Casa Verde Capital (known for its partnership with Snoop Dog). Since launching it’s raised a whopping $10 million. High-profile investments include tracking platform Leaflink and point-of-sale company Greenbits. Another well-known Silicon Valley VC firm called Benchmark recently invested $8.1 million in Hound Labs. A startup that produces breathalyzers that trace THC (the component that produces a euphoric high) in users.
Meanwhile, in Canada, we’re starting to finally see that same momentum. Earlier this week, Constellation brands (the maker of Corona beer and other alcoholic drinks) purchased a 10 per cent stake in weed company Canopy Growth for $245 million. In the last year alone investors have dumped approximately $700 million into Canadian cannabis companies, according to wealth management firm Canacoord Genuity.
One of Canada’s most recognizable homegrown success stories is Ample Organics. The Toronto-based startup produces seed-to-sale software that manages plant cultivation, shipping, and purchases. Like most of today’s weedprepreneurs, the company’s founder, John Prentice, earned his tech stripes outside of the weed business.
As Canada’s novice marijuana industry matures new opportunities will be born out of tech innovation created by forward-thinking entrepreneurs. Enter: Prentice who launched a successful business based on this ingenious thinking.
“The cannabis industry will be gigantic… because of the strict regulations and the unique ways in which the cannabis industry operates, adaptation and modification need to happen. When that’s impossible, new products need to be created,” he says. “It’s a brave new world out there, and we’re all looking for innovative technologies to help maximize the opportunity.”
The future of Canadian ‘cannabiz’
For techpreneurs looking to enter the space, the potential rewards are big. Everything from plant growing systems to weed patches and marijuana-infused edibles will require technical expertise.
Jordan Rodness, the marketing manager for Emblem, sees a new world open up for tech startups interested in creating ancillary products that help businesses like his. In fact, his company already works with a local tech startup called Strainprint that helps users track intake. The licensed producer cultivates marijuana out of its 24,000 square feet facility in Paris, Ontario.
“As a company, we’re very much trying to get ahead of the trends. We’re looking for anybody who’s an innovator and has a really great idea that they want to bring to the market or that’s going to be really useful in the industry.”
Michael Garbuz agrees. The lawyer — who works at CannaRoyalty in a corporate strategy role and mentors early-stage companies through Leaf Forward — understands how competitive the industry is.
He sees innovation and technology playing an important role in the developing cannabis industry. Especially, since Canada’s product market is less developed than the U.S, which saw a handful of states legalize cannabis in some form as early as 1996. At home technology will be key to the country’s growing cannabis industry and maintaining its edge in the international market.
“A lot of individuals now-a-days are working on really advanced technologies to improve and optimize the formulation and delivery of cannabis. We are seeing new technologies that control how quickly you feel the effects, the consistency of effects, and the entire consumer experience. Tech innovation and ongoing R&D are ingredients that the industry needs to continue to mature and grow.”