Cannacurio: Cannabis Software Stack – revised (Update November 2020)

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introduction

This summer we published our first cannabis software stack report. We’ve compared the number of government licenses with the 320 companies connecting to METRC and Leaf Data Services in WA. Since compiling this data, we’ve taken an updated look and found that 43 new companies are now part of the software stack.‍

Find out about the original Cannabis Software Stack Report Before you review these updates or listen to author Ed Keating, review these data and insights in his Cannacurio Podcast.

Main results

• Twenty of the newcomers (47%) are headquartered in California, with Massachusetts in second place at 12%.
• 28 (65%) are trying to break into the California market; 7 in Massachusetts and 4 in Colorado
• FolioGrow is the largest provider of 7 markets since the middle of the year
• 5 companies entered the delivery software category: 4 in California and 1 in Massachusetts

Sectors

We have grouped all of the companies we found into four sectors, as shown in the following market map:

We’ve also classified 12 companies as “miscellaneous” – they have typically been licensees or may be clandestine. Let’s take a look at each sector:

Back office (100)

This sector includes solutions for complex operations that can be used by different types of licensees. Applications can include ERP, seed-to-sale, compliance, and supply chain / logistics. We have found five new companies in this area, comprising a total of 100 providers:

All but Saffrondo (Massachusetts) are trying to crack the California market. It’s also noteworthy that Zencanna.io competes with players like TaxNexus and offers a bundled point-of-sale solution with tax compliance.

Activity (79)

These companies provide solutions for cultivators, manufacturers, retailers, etc. Applications include point of sale, software, delivery, and laboratory information management systems. There are 11 new ones we spotted and five are focused on delivery while three are deploying growth software. Unsurprisingly, there is only one new point of sale provider.

While 10 of those vendors only went to one state, FolioGrow went big and stepped into seven including Massachusetts, Ohio, Louisiana, Washington DC, Michigan, Oregon, and California. Four of the five delivery providers have chosen California, with Zip Run targeting Massachusetts.

It’s not surprising that only one new point of sale has been on the list in the past six months. In our Point of Sale 2020 report, we highlighted the intense competition in this market, with 68 vendors battling it out and only three companies owning 50% of the market.

Transaction (36)

These solutions revolve around B2B and B2C transactions and include financial institutions, financial compliance, marketplaces and payment processing. There are only five new ones here, making a total of 36. There are three related to financial compliance and two are marketplaces.

Each of these companies has only entered one state so far. Custom and Cbidds are in California, Left Coast in Oregon, Safe Harbor in Colorado and Cannalist in Massachusetts.

Advice (70)

This group consists of consultants who can advise companies on technical integration and data analytics companies provide insights to a license holder and use METRC / LDS data as input. In this final review, we added nine consultants and one analytics company.

Alpha & Omega Cannabis Solutions has entered three states: California, Louisiana, and Missouri, while Balance Point Technologies has focused on Colorado and California. The rest only entered one state, with California being the favorite.

Misc (90)

Of the 43 new companies, there are nine that are hidden or it is not clear what business they are in. If anyone can share their findings about these companies, drop me a line.

Conclusion

Many experts have claimed cannabis is the big winner in the 2020 election. With five new states going online thanks to voters in Arizona, Mississippi, Montana, New Jersey and South Dakota; This industry will continue to expand. Based on this analysis, it appears that the additional software providers will grow with them.

The 320 incumbents we examined this summer did not stand still either. 43 of them have moved to other states since the middle of the year. We found a total of 61 “moves” by these companies. By moving, we mean that a company is certified in this condition by Leaf Data Systems or METRC. The busiest state is Maine, where 18 companies are opening business. Michigan ranks second with six new companies, followed by five in Massachusetts and Missouri. Four companies expanded in three states, including Roshi, a logistics solution; and three point of sale suppliers: Posabit, IndicaOnline and Viridian Sciences.

West Virginia and Oklahoma are both now under contract with METRC so we will be keeping an eye on the wonders of one state and the multi-state providers that will soon be joining in those states.

‍Cannacurio is a weekly column from Cannabiz Media that offers insights into the most comprehensive license data platform. Check out Cannacurio posts and podcasts for the latest updates and information.