Cannabis Software Stack: Who Leads the Consulting Software Sector?
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What is the consulting sector of the cannabis software market like and which company will be the leader in 2020? Cannabiz Media looked at the data in the Cannabiz Media License Database and published the answers to these and other questions in the Cannabis Software Stack report last month.
Three weeks ago I published a new series of articles sharing more details from this report and examining what the cannabis software stack and licensing options look like based on each software sector. So far I’ve covered the back office, activity, and transactions areas.
In our final issue, I’ll take another look at the reporting data and see what the Cannabiz Media research team has learned about the consulting sector.
Define the licensing option in each state
The Cannabiz Media team has found 332 unique Washington companies that connect to METRC or Leaf Data Services. Using the Cannabiz Media license database, we determined how many licenses they can link to in those states (i.e., the “licensing opportunity” or potential addressability market in a state).
To determine this license opportunity, we’ve added active, pending, and applied licenses for the corresponding activity. For example, to develop the license option for point-of-sale software, we involved active, pending and applied pharmacies and retailers.
The consulting sector consists of 60 companies. These companies are active in analytics and consulting. In a way, this is the keystone group as it helps licensees understand the data generated by all other sectors.
There were two types of companies that fit into our consulting sector: analytics and consultants.
The analytics companies represent some well-known names such as BDSA (BDS Analytics), Cannabis Big Data, and Headset. They provide insight to a license holder and use METRC / LDS data as input.
Our analysis shows that consultants are focused on helping licensees integrate or connect with METRC, or creating software and applications.
- We have identified 60 companies in the consulting sector.
- They make 116 connections to the 15 states.
- 30 of the 60 (50%) connect in California.
There are many companies in this area and at the time of this writing a number of companies appeared to be offline. Both Virtugro and Jade LLC are analytics companies with non-functional websites. Therefore, NCS has moved up to fifth place.
15 companies were identified as providers of analytics. Those in the linked category from one to 11 states. California was the most popular state with 10 connections, and Colorado is right behind with nine. Oregon is a distant third at four.
As the markets mature and bring in more licenses – and therefore more data – these companies may move to states like Michigan and Massachusetts.
We have built up a broad network for licensing options, as the reports and analyzes can have an impact on the entire supply chain.
It is also important to note that these companies do not necessarily need to have access to METRC or LDS as they can get the information they need directly from their customers. Headset and BDSA report in a variety of markets and have customers across the country.
The Consultants category is large and includes companies that can help licensees connect to METRC or design and build software. In our review, we found companies ranging from sole practitioners operating in one state to a national company with a presence in 10 states. Only 10 of the 45 were in more than one state.
Fifteen of the 45 providers are headquartered in California, seven from Michigan and five each from Washington and Oregon. California (20) is the state in which most companies operate, with Oregon (16) just in second place.
Why this information is important
The information in our report is useful to a wide variety of stakeholders in the cannabis industry:
- Regulators They can gain insight into the size and scope of the software landscape and learn about many of the companies they may work with.
- Existing providers can use the information for both competitive and business intelligence – and to find future partners and acquisition candidates.
- Investors can use it as a list of potential acquisitions or partners for their portfolio companies.
Existing license holders can use it to measure software vendor footprint. With this data, they can see which companies are one-state wonders.
This concludes our software stack review, but the team is reviewing the data for our third point of sale software report. We call and interview pharmacies across the country to find out who they are using as suppliers, whether they have switched and who they have chosen as CRM suppliers.
Cannabiz Media customers can stay up to date on these suppliers and other new licenses through our newsletter, alert and reporting modules. Subscribe to our newsletter to receive these weekly reports in your inbox. You can also schedule a demo for more information on how to access the Cannabiz Media License Database yourself, to delve further into that data, and more.