The Green Rush: Finding Tech Business Opportunities Within The Cannabis Sector
Cannabis, marijuana, pot, weed, ganja, Mary Jane, doobage. Whatever you call it, it has taken center stage in the world of investment. It’s getting the 15 minutes of fame it rightfully deserves, and it’s getting it right now. Traditionally, whenever anyone mentioned the words “cannabis” and “entrepreneur” together in one sentence, it meant one thing: drug dealer. That’s changing very quickly — and technology will play a huge role in the industry’s future legitimacy.
The working theory is that cannabis, as an industry, is headed toward commoditization, regulation and standardization. It makes sense…most other plants that are grown achieve similar status. They’re also traded on public markets, with transparency, and have market-based and regulator-based rules that are upheld to maintain the integrity of those markets.
In achieving this within the cannabis industry, an enormous opportunity exists for technologists to both standardize and create proper marketplaces within which to sell raw cannabis, as well as its derivatives. According to the Huffington Post, if marijuana is legalized at the federal level, the overall market will reach in excess of $35 billion annually by 2020. By that virtue, at least one-third of that can be traded at a commoditized level.
Exchange platforms, like Amercanex, CCX and CHEX, are changing the face of legal cannabis and hemp, as well as creating catalysts for the proper industrialization of these plants. These companies are creating standards and qualitative rules for scoring and grading, as well as setting up environments for market-based pricing. The future of wholesale transactions in this nascent industry will be done on exchanges and marketplaces, and on top of mobile, optimized, transparent technologies.
Along with commoditization comes more efficient or Agra-tech-enabled industrial cultivation. California is by far the biggest producer of cannabis today, and also is experiencing a terrible drought — which has led companies to create energy and water-efficient greenhouses for cannabis cultivation. These greenhouses are using solar panels and limiting the amount of water usage through techniques that are in full bloom throughout agriculture and have yet to be truly instituted on industrial levels within cannabis and hemp.
With the majority of U.S. states legalizing marijuana cultivation in one form or another (medicinal versus recreational uses), the time to institute these methods is now.
To adequately define the properties of the plants grown and their potential effects, technology, and laboratory grade testing must be the rule and not the outlier.
To make sure that finished cannabis products are safe and consistent, laboratories are popping up across the world. Tech innovation is needed to make this testing more efficient, and testing needs to be enabled on-site, at the farm, rather than having to always send it to a lab for testing.
Further testing technology is also needed for cannabis users. To confirm that patients and recreational customers alike are actually getting the advertised benefits, patients must be tested during usage and proper data must be derived. Clinical trials and recreational taste tests must be offered to catalog and properly understand the effects of this plant. The world needs to definitively know all potential side effects, long-term negative effects and all of the positive and medicinal benefits of marijuana.
One of the biggest problems in the industry today is consistency. You may think you’re buying a specific strain but, in actuality, you’re not. Shop owners and the sellers of cannabis are not consistent at all … you can feel different every time you imbibe, even though you thought you bought the exact same thing. Growing conditions, the age of the product and storage can all have a dramatic effect on the final outcome for users.
Mold, pesticides and other chemicals used in the cultivation process can also bring as yet undetermined negative effects. The solutions are mandatory and prolific testing of cannabis products, as well as technological processes for distillation akin to beer and whiskey.
Manufacturing And Production (Not Growing)
Consistency can and will be achieved through extraction and distillation of raw cannabis. There is a whole breadth of opportunities in super-critical extraction and derivative creation, and companies such as Ebbu are on the forefront of these technological innovations. Products will not just be limited to edibles, such as brownies and cookies, but will span the gamut of oils, pills, waxes, tinctures, oral strips, patches, lip balms and even sexual enhancement lotions. All sorts of machinery and hardware will need to be invented to efficiently carry out these processes.
Technological Infrastructure And Business Technology
With all of these tech-based opportunities, surely managing these businesses will require technological infrastructure, as well. Whether it’s POS and inventory management systems created by the likes of MJFreeway, “Seed-to-Sale” tracking systems, traditional accounting software or tools for web presence management, the potential for tech disruption is ripe. And that doesn’t even touch on the technology required for securing patient data — like regulatory compliant applications and privacy enabled HIPAA-compliant data storage — which will need to be easily accessible for physicians.
The new businesses will need to be built to put all of their resources together and not silo all of their data. Enterprise platforms like SalesForce, Microsoft Dynamics, and Zoho will all be enabled to manage these businesses’ operations and create transparency within. Even more importantly, they will serve to provide a platform to ensure a safe, consistent and customer-focused set of products and services.
Reaching the cannabis industry’s extremely targeted demographic will become more and more competitive, so focused advertising is necessary. Advertising technology has a role to play here. The most efficient service of ads, as well as the use of marketing dollars, will be needed. Programs to deliver those ads, companies to write those ads and testing to see which ads deliver the highest ROI will all be avenues for marketing companies to provide their services.
The current advertising opportunities in legal cannabis are more limited than liquor, tobacco and gambling. To navigate those marketing waters efficiently and successfully, the best and brightest marketing companies are needed to create campaigns.
eCommerce And The On-Demand Economy
Once the products and the industry are efficiently regulated, eCommerce becomes the best medium for transactions; transactional commerce, as well as basic buying information, must be relayed in a manner that today’s consuming public accepts. Mobile-friendly applications will need to be created to meet the demands of an enormous market, and all of these options have to be easily accessible and easily researchable. Reviews for products, as well as providers, need to work just like every other store or commonly sold item.
As all of these companies are operating and they begin to resemble other American industrial mainstays, financial technology and payments come into play. Instead of the current state of play, where most transactions are in cash, Bitcoin, credit cards, Apple Pay and PayPal will all have a distinct role in your purchase of an “eighth” with one-click on a super-easy-to-use app. While banks and financial institutions have shied away from touching the industry because of its questionable legal status, and until there is adequate and transparent technology, a void will continue to exist and, thus, present a massive business opportunity.
With mobile usage comes the right-now economy. Anything you want today will come to you on-demand when you want it — and so shall cannabis. Enterprises are popping up everywhere that promise to deliver your medicine within the hour, and some will even provide a medical consultation via your mobile device. Hungry after you’ve consumed cannabis? Partnerships and cross-marketing opportunities with the $70 billion food-delivery and takeout industry are huge.
The “Green Rush”
So why is the “Green Rush” happening and why should you get involved? Simple. Within almost every other established industry, all of the technology opportunities discussed in this article have already been flagged and tagged, and companies are actively competing for their slice of the industry. Here, within legal cannabis, the field is completely wide open! As the industry grows and becomes more viable as legalization spreads, the allure for professionals and experienced operators to enter the fray becomes that much more real and that much more lucrative.
By Eddie Miller, CEO of eCann Media