Cannabis technology and websites stay red hot

First, Weedmaps received a valuation of $ 2 billion.

Then Leafly went into a SPAC fund to receive its $ 700 million valuation.

Then Dutchie raised another $ 350 million to reach a valuation of $ 3.5 billion.

Jane Menu Management then raised $ 100 million to reach a valuation of $ 1.2 billion.

EAZE raised funds and bought the Green Dragon MSO and opened EAZE pharmacies as I write this.

Then Deb Borchardt sold the Green Market Report to Crain Publishing.

Next, PotGuide.com sold to Fire and Flower of Canada for $ 8.5 million.

If you see any topic here, you are right, cannabis websites and technology platforms are in high demand with investors and Flowhub has joined the party. Not only did they join the party, but they brought Jay-Z with you too!

Billionaire entrepreneur and hip-hop artist Shawn “Jay-Z” Carter has made a new investment in the cannabis industry. Instead of selling $ 50 hand-rolled joints, however, he is investing in a technology company that helps cannabis dispensaries process payments.

Jay-Z’s latest investment is in Flowhub, a cannabis point of sale software company based in Denver. Flowhub generally supports pharmacies by providing compliance, inventory tracking, point of sale and business intelligence solutions. Jay-Z participated in the $ 19 million strategic financing round that increased the company’s valuation to $ 200 million.

Importance of Promotion

Flowhub raised a total of $ 50 million and this new round of funding was led by Poseidon Asset Management and investment firm Headline. Every year Flowhub processes over $ 3 billion worth of cannabis transactions for over 1,000 companies in 14 states. This latest fund will be used by the company to accelerate expansion into emerging markets, expand its social equity program and further improve its product range.

Flowhub was founded by Kyle Sherman in 2015 to help pharmacies track inventory and process transactions. In addition to helping pharmacies comply with state cannabis laws. No doubt the latest funding will help achieve these goals.

Kyle Sherman praised Carter, Poseidon and Headline in a press release. He confirmed that he couldn’t think of a more ideal group to work together to take the Flowhub to the next level. He believes the recent funding not only underscores the quality that Flowhub offers its customers. But it’s also a huge step towards the growth of the marijuana industry in general. Sherman also mentioned that the company continues to focus on developing creative products that help customers run better business.

Sherman particularly praised Jay-Z, saying Jay had incredible business acumen. He confessed that Jay-Z knows how to surround himself with bright minds and build great facilities.

The birth of Flowhub

Emily Paxhia, the managing partner and co-founder of the cannabis fund Poseidon Asset Management, first met Sherman in 2015. Paxhia met Sherman at a pitch competition in Denver and was impressed by him. The fact that Sherman recognized the biggest problem with pharmacies even before he started his company impressed Paxhia.

Sherman realized that pharmacies had to manually report their sales total and inventory to the Colorado Treasury Department on a daily basis. And when a pharmacy’s inventory doesn’t match the state’s database, a huge problem arises. The pharmacy could lose its license and face substantial fines running into the millions. Sherman convinced the state to open its database to software companies. This automates the reporting process.

Paxhia became Flowhub’s first investor through Paxhia’s fund, which she runs with her brother. There are currently no other payment processors serving the industry, giving Flowhub a head start in the cannabis industry.

Paxhia claimed that Flowhub was the place for the cannabis industry. It refers to the payment processing company founded by Jack Dorsey. Jay-Z is now one of Square’s board members after selling his music streaming service “Tidal” to Square. Paxhia also said that it is pretty obvious that several tech companies will emerge as leaders in the cannabis industry. And without a doubt, she believes Flowhub will be one of them.

Flowhub’s arm for social justice

Flowhub has established a strong social justice arm within the industry. Flowhub’s social equity program was launched in June 2021. The program invests in cannabis entrepreneurs who have been negatively affected by the war on drugs. The Social Equity Program offers Flowhub’s point-of-sale software at a discounted rate to qualified social equity business owners. The program offers the software for $ 4.20 for three years, the View app, the Greet apps, and the mobile stash, as well as a free implementation.

To date, Flowhub has given over $ 1 million in free software to companies owned by underrepresented groups through the program. These groups include veteran, women, and black and brown owned pharmacies.

A cash-intensive industry

Given that cannabis remains federally illegal, large state-insured banks like Wells Fargo and JPMorgan Chase cannot serve companies in the cannabis industry. The same applies to credit card companies such as Mastercard and Visa or payment processing such as Square and PayPal.

This means that most transactions in the industry are made in cash in 36 states. Last year alone, the industry had total sales of $ 20 billion, with all transactions being made in cash. And according to Cowen, the industry is expected to reach $ 100 billion in annual sales by 2030. The cannabis industry is a cash industry, according to Sherman, which is hard to believe.

Many cannabis companies gave limited access to the mainstream financial system. The local credit unions are the only financial system serving cannabis retailers. And this enables pharmacies to set up bank accounts, pay their employees, suppliers and taxes with checks instead of cash. Many pharmacies provide an ATM in the store for customer transactions.

However, Flowhub’s point-of-sale tools help pharmacies stifle the intricacies of a cash-intensive industry. Flowhub’s software allows customers to use their debit cards at the checkout, but the transaction is basically an ATM withdrawal, not a debit transaction. Sherman claimed that the Flowhub software is not a debit transaction, but it feels that way.

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Currently, banking reform efforts are stuck on Capitol Hill. The Secure And Fair Enforcement (SAFE) Banking Act came into force for the fifth time last month. This bill would allow state-regulated cannabis companies to access loans from the mainstream financial system and pay taxes with ease. It should be noted that the Senate did not take up the bill. Until SAFE is passed, the cannabis industry will continue to rely on cash, even if marijuana is federally legalized.

Sherman claims that the biggest obstacle the cannabis industry is currently facing is not gaining access to the mainstream financial system. He went on to say that waiting for the government to change such a policy is no longer an option. Given that the industry brings in billions of dollars in annual sales. How did it all start? Well, Apple changed the marijuana industry forever, allowing delivery apps in its ITUNES store, starting a race for “2-click” ordering of cannabis in an app or ecosystem. Click here to read how it all happened and see the latest cannabis technology and website deals!

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