It’s common knowledge that fintech and digital commerce platforms can help startups grow. Rarely, however, have we seen them connect so robustly as they do with today’s cannabis industry.
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In recent years, many developed countries have decriminalized cannabis, but on an industrial level, operators must now address the various challenges of distribution. In response, dispensaries have turned to eCommerce infrastructures in order to scale their operations and meet widespread demand. In this rush to bring medicinal and recreational weed to market, we’ve seen small word-of-mouth businesses blossom into full-fledged digital operations before our very eyes.
Cannabis eCommerce is Growing
It’s worth noting that while more governing bodies are legalizing cannabis, businesses still must address certain obstacles. In the United States, weed-based eCommerce is experiencing strong yet uneven growth as decriminalization is left up to individual states. When legalization does occur, distributors face confusing regulatory compliance expectations regarding how to obtain licenses for online sales. This has created genuine limitations for digital storefronts, as it restricts them to specific regions.
Despite these barriers, opportunities exist. Some recently decriminalized states awaiting local licensing can obtain marijuana shipments from other regions, most notably the Netherlands. Some businesses have also started developing distribution infrastructure with plans to scale up operations as more regions change their laws.
Grown in Canada
Countries like Canada offer a much clearer picture of weed tech’s growth potential, largely due to its nationwide legalization. Initial reports predict that the overall industry will reach $4.1 billion by 2021. While Canadian provinces limit marijuana sales to government-owned outlets, cannabis tends to be widely available from licensed private outlets.
Many Canadian fintech startups have sprouted up in this environment. Competition is strong, with a few big companies having risen up to corner different market sectors. That might change in the near future – Namaste has recently positioned itself as the future one-stop digital shop for marijuana and cannabis consumers. Marketing spin aside, it certainly has the potential to match this claim.
Before marijuana legalization, Namaste started out as an online cannabis accessories storefront. This successful operation generated a database of 1.5 million customers – an enormous advantage when branching into medical and recreational marijuana sales. Today, Namaste manages storefronts in over 30 countries, including Canada, the UK, and Australia. Once Namaste obtains dispensary licenses in each of these countries, it will be in a prime position to become a cannabis industry giant.
Despite these advantages, Namaste is still actively looking for ways to stay above the competition. The most intriguing examples revolve around cutting-edge technology partners such as Findify AI, which can recommend specific medical marijuana strains for patients. Namaste intends to combine Findify with its Uppy Cannabis Journal app to capture user data and feedback to evaluate which strains will be most effective for individual customers. If successful, Namaste could form the medical cannabis eCommerce template for years to come.
Weed Tech’s B2B Tools
Most startups don’t have the capabilities or licensing to act as dispensaries, but there are other innovative ways to take part in the field. One approach is to offer B2B fintech-based tools that facilitate connections between brands and dispensaries. LeafLink is one of the biggest examples, operating across Arizona, California, Nevada, Oregon, and Washington. Its services include an online marketplace, CRM system, and a suite of order management tools. LeafLink has benefited nicely from investor support, raising $17 million to create its weed-centered wholesale management portal.
Meanwhile, Eaze and Greenrush have been compared to Uber in their approach to fast and reliable delivery services. Both companies coordinate marijuana deliveries through hired drivers and partnerships with local dispensaries. Given that Eaze alone was funded to the tune of $51.5 million, it’s a market some investors think could spark a new wave.
If Eaze and Greenrush are Uber, then Baker aims to be the Salesforce of cannabis. This CRM and marketing automation platform is geared toward dispensaries, supporting 1,000 businesses and 1.2 million customers across North America. It acts as a B2B tool that integrates seed-to-sale players while providing eCommerce, marketing, and sales tools.
The Innovation of Weed Tech
On a smaller scale, there are countless startups attempting to corner unique niches in marijuana’s digital markets. PotBotics recommends medical cannabis strains for patients and features plenty of data input options – right down to analyzing EEG scans. Seedo is a fully automated home growing kit that can be controlled directly from your smartphone. Snaphash combines home growing with augmented reality, thanks to a smartphone camera app that suggests grow setups, schedules, and bud harvesting tips. There’s even a weed-centric social media platform called MassRoots!
eCommerce platforms and fintech tools are just a few channels customers can now use for their medicinal and recreational marijuana needs. As the legalization trend continues, we can expect to see more companies using digital tools to reach mass audiences. The fact that it’s happening so quickly is a testament to eCommerce’s burgeoning ability to support global demand in countless innovative ways.