Thanks to emerging point-of-sale (POS) technology for cannabis retailers, dispensaries in medical marijuana and recreational states will soon operate as seamlessly as your average convenience store.
From business-to-business data companies like BDS Analytics, to retail and consumer-facing firms like Greenbits, these new startups are helping dispensaries and retailers quickly access data regarding everything from product inventory to the best-selling strains. However, since cannabusiness regulations vary from state to state and the overall legal market is still in its infancy, tech companies that track marijuana POS data are not “one size fits all.”
For instance, one of the newest startups entering the market is Baker, a company that helps people locate their favorite strains quickly and easily and provides dispensaries with POS technology, a breakdown of anonymized sales stats and assistance with building customer loyalty.
The Denver-based firm works with more than 100 dispensaries and is set to receive a $1.6 million round of funding, according to Baker CEO and co-founder Joel Milton. Baker’s clients use the service to present customers with deals on their favorite products and to match their inventory with people seeking a specific strain.
“Part of what we’re trying to do is change the shopping experience, the way Amazon personalized recommendations that feel very comfortable,” Milton says. “There’s still a lot of people who haven’t experienced that yet, and I think part of the reason is the lack of technology that helps get this industry where it can be.”
Even so, the data these companies collect depend largely on the businesses they’re serving. Though Baker helps consumers locate favorite strains and helps dispensaries take a big-picture look at their business, the startup doesn’t address the compliance aspect of product tracking. That’s where a competitor like Greenbits comes in.
Greenbits, a San Jose–based POS-data startup serving more than 250 dispensaries, also provides its clients with a breakdown of store statistics. Though the company doesn’t offer an app for marijuana consumers, it does track products to help dispensaries stay compliant with state laws. Greenbits’s software traces and reports product and sale information directly to authorities, and it also prevents dispensaries from selling to underage buyers, says Ben Curren, the company’s founder and CEO.
Because laws and technology vary from state to state, Greenbits has had to develop technological solutions for clients in states whose systems aren’t easily integrated, Curren adds. These legal nuances affect where and how Greenbits sells its products.
“It’s kind of like going international,” Curren explains. “In Washington, when the government started seed-to-sale tracking, the software had an API [application program interface], which allows us to automate traceability data for businesses… In Colorado, the software system doesn’t have an API, so there’s no way to integrate with the state.”
Other firms are also stepping in to take the pulse of the industry, focusing more on business-to-business needs than consumer operations. BDS Analytics is a Boulder, Colorado–based firm, founded in 2015, that specializes in marijuana retail data, market research and consulting services. It collects and anonymizes consumer information for individual dispensaries and also gathers market-share data to determine where brands stand in the marketplace.
BDS Analytics doesn’t have a consumer app, nor does it assist dispensaries with day-to-day operations or regulatory compliance. But the data it provides help dispensaries determine the size of their market share, as well as to assess how well certain strains and products are selling – information which is useful to growers and brands, says Tom Jones, BDS’s director of analytics.
The availability of this data is common in other industries, but until recently there were no firms providing such information for the cannabis sector, says Taylor West, deputy director of the National Cannabis Industry Association. This data can be crucial for pricing products, assessing demand and determining what to offer in stores.
At the same time, it’s important to ensure that the data collected and processed by these companies is secure, West adds, both to protect consumers and to avoid sharing proprietary information with competitors. But building the necessary relationships with business owners to collect such data is “not an overnight process.”
“The more established dispensaries have been using their own data for a long time to make decisions,” West points out. “But it’s definitely an area that you’re seeing more businesses getting into, recognizing that a tremendous amount of information can be gleaned from this data.”