Almost daily, new technology solutions are emerging for the cannabis market. Contrast this with just a few years ago, when you could count on one hand the number of seed-to-sale solutions. One way to visually track emerging cannabis technology companies is to look at advertisements in magazines such as Marijuana Venture and online cannabis communities. Another approach is to look at the composition of booths at cannabis trade shows. The years that I’ve attended MJBizCon in Las Vegas, I’ve witnessed an explosion of CannaTech exhibitors.
In the January 2021 issue of Marijuana Venture, I presented the 420MSP CannaTech Ecosystem Stack. You can click over to the following URL to revisit that chart for a point of reference: https://bit.ly/cannatechecosystem. In building the CannaTech Ecosystem Stack, a number of approaches were used, including consulting with industry experts Duane Roebuck (BlueStar) and Ryan Porter (toptender). Then, quite frankly, subjective judgement calls were made along with objective measurements.
The “subjective” factors I employed took into consideration the resource commitment cannabis technology players have made and, more loosely, the cultural commitment to the cannabis vertical.
Let’s use the aforementioned BlueStar, a technology distributor, as an example. BlueStar has a dedicated executive in Duane Roebuck who is hyper-focused on the cannabis vertical from end-to-end. Contrast that with Ingram Micro, arguably the world’s largest technology distributor (more than $50 billion in annual revenue). Buried in the massive resource corpus at Ingram Micro is, in fact, a cannabis technology line card. But understand that Ingram Micro literally has line cards for all verticals. But without a resource commitment, a line card does not necessarily make a business a CannaTech company.
A cultural commitment was factored in to defining a CannaTech company. This “measurement” came from my interviews with players such as the founders of Purple Fog Enterprises who made their pitch and made the cut.
You might have noticed well-known technology companies like Dell and SAP are not on the CannaTech Ecosystem Stack. There are reasons for this. Even though Dell has inside and outside sales representatives that call on cannabis dispensaries in Colorado — I spoke with the Dell district manager about this targeting — Dell, in its heart of hearts, is not a CannaTech company. It’s just that dispensaries “happen” to purchase Dell equipment. Another example is German-based SAP. Its enterprise resource planning (ERP) system — think seed-to-sale workflows — is being implemented in the cannabis vertical by its channel partners/managed service partners (especially in Canada). But that’s a function of its partners hunting down cannabis businesses and implementing and maintaining the ERP solution and not really a function of targeting the cannabis vertical. Contrast that with Dauntless, the seed-to-sale solution that ONLY targets the cannabis vertical.
In a traditional business community, you can research companies on Crunchbase and other similar sites that track company data, financial results and investments. With the cannabis vertical in general and the CannaTech ecosystem specifically, this is more challenging due to the lack of data and some players’ reluctance to reveal their cannabis activities.
In the future, as the cannabis vertical become more mature, it’ll be possible to conduct deeper financial analysis with ratio analysis like the percentage of revenue that derives from cannabis technology business activity. I’d offer the hurdle should/would be that 50% of the revenue comes from cannabis-related business activity.
Another objective measurement is to revisit the line card discussion and see what logos are listed. In the figure at left, you can see the cannabis technology line card from BlueStar. Long story short, I rolled with each of the logos except LG and WatchGuard (two respected technology players but not necessarily true CannaTech companies).
I worked closely with expert advisers in building the CannaTech Ecosystem Stack and we did not list actual service providers like MSPs and VARs that implement the solutions displayed on the chart. That would be an entirely different list that is on the 420MSP roadmap in 2021.
Call to Action!
The 420MSP CannaTech Ecosystem Stack is version 1.0 and in the land of Microsoft, the old saw is that we get is right on the third version. So I need your help. I’ll periodically update the CannaTech Ecosystem Stack and I need your logo nominations. Feedback is the breakfast of champions, and I’m the first to admit there is indeed room for improvement. Thanks for supporting the CannaTech community.