OAKLAND — A more sophisticated cannabis industry is emerging when it comes to technology, but the growth of tech in the sector is still limited in many ways by the legal climate of the rapidly changing industry.
That was the takeaway from panel discussions Friday at the New West Summit, a conference focusing on developments in technology, investment and media in the cannabis industry.
No longer is the industry as simple as a collection of growers, buyers and medical dispensaries. A slew of technology, finance, medical and media companies are growing in the cannabis space, and many were present at the conference, held at the Oakland Marriott City Center, to speak about their challenges and successes.
From databases of cannabis strains to cannabis-focused social media, the list of cannabis tech companies has grown even in the last five years, panel moderator and cannabis industry writer Jimi Devine pointed out.
Some companies are medically-focused. StrainPrint, for example, provides a mobile app for people to track which strains of cannabis, doses and methods work best for particular medical needs, enabling them to create a personal library — and a wealth of data for StrainPrint — to keep track of what works.
The app was created, president and CTO David Berg said, because there was nothing before that the team felt “was meaningfully helping patients manage treatment (with cannabis).”
Dr. Jessica Knox is a partner at The Canna Doctors, a medical practice focused on managing patients’ care with cannabis. The practice also launched a chat bot, called Abbi, that it offers as an online tool to provide general medical advice — focused on cannabis — to people who have questions. The information that powers the bot was created by the doctors at the firm, she said.
Edible Sciences creates technology for 3D printing to produce accurately-dosed cannabis edibles.
Other companies are catering to the community of cannabis users.
High There is a platform that aims to connect cannabis users with each other, like a social network. Steve Levin, chief revenue officer at HIgh There, previously worked at social networking app Grindr and said as he entered the cannabis space he was amazed by how many people were looking for dates or friends who are cannabis users. High There provides a judgement-free place to meet them, he said.
Many tech companies are aiming to serve the growing needs of cannabis growers and cultivation, such as Trellis, which offers tracking and inventory management software to cannabis companies, or Confident Cannabis, which helps companies test the properties of their cannabis and share the information online and on labels.
The diversity of tech companies in the cannabis space is growing, but the challenges discussed by many companies at the summit are similar to those of any other tech organization, including the need to protect client data and how to market their companies. What is different in the cannabis sector is the issue of how to manage money in an industry that is still illegal at the federal level.
While the state heads toward the legalization of recreational use of cannabis for adults, the federal government has not legalized even medical cannabis, and most large banks won’t do business with cannabis companies.
Raising capital is difficult enough for anyone, but especially in the cannabis industry. And the problem is not relegated to only dispensaries or growers — even software companies and the tech companies have trouble with financing.
“We’ve had two bank accounts shut down, and we don’t even touch the plant,” said Steve Albarran, founder of Confident Cannabis, which provides a platform for companies to track and share the quality and properties of their cannabis. “We require venture capital, startup capital and there are a handful of (venture capitalists) doing that, but mostly we rely on family offices or high net-worth individuals.”
David Berg, of StrainPrint, said he has experience in the software development world and that cannabis companies need to take the same steps as early internet companies do: building business relationships and networks.
Jessica Knox, of the Canna Doctors, said at the conference that it’s been a struggle for her practice, especially considering insurance won’t pay for her patients’ treatments.
There are small changes happening. CanPay is a company that offers a secure data transfer service that facilitates funds transferred by its partner banks. CanPay CEO Dustin Edie said during a panel discussion that it’s mostly community banks and small credit unions willing to do business with cannabis-related companies.
Large banks are unwilling to take on the risk, said Joshua Laterman, CEO of the National Association of Cannabis Businesses, and until progress is made on cannabis legalization at the federal level, it is unlikely that those banks will budge when it comes to cannabis.
Said Laterman at a panel discussion. “Is there a safe way to move money legally (in the cannabis industry)? No.”
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