While regulators have been slow to update the rules governing marijuana, investors have been caught up by reefer madness as money has continued to flow into the $14.5 billion market. This growth has also attracted a number of disruptors including the marijuana tech company MJ Freeway.
The company brings big data to big pot by providing dispensaries, cultivators, and manufacturers an ROI-driven cannabis seed to the sale tracking software platform. Founded in 2010, the company has closed two funding rounds and investors include the San Francisco based, Tao Capital Partners, and the New York-based Evolution Corporate Advisors.
According to industry observers, MJ Freeway could be poised for a bigger move – especially as more states and countries legalize the cultivation and sale of the cannabis. How high can the market get? Well, MJ Freeway co-founders Amy Poinsett and Jessica Billingsley explain.
The Big Picture
There’s no doubting that tech has transformed dozens of industries and with the legalization of marijuana, why shouldn’t the cannabis industry follow suit. In fact, MJ Freeway co-founders Poinsett and Billingsley saw an opportunity California and then Colorado became the first states to legalize weed for personal use.
Granted, the movement to decriminalize marijuana use in California dates to the late-1960’s but it was the rise of legalized dispensaries in the early 2000’s really opened the door for the ‘professionalization’ of the industry.
This shift covered everything from cultivation to distribution to retail operations. In doing so the door was opened for software solutions which would help business owners better manage the heavily regulated supply chains.
Enter MJ Freeway, as the company’s solutions help operators to meet compliance standards not just in the U.S. but also in other countries. In addition, the developers went through great pains to match the functionality of the platform with the specific needs of the industry.
This covers everything from tracking genetics to inventory and marketing campaigns. Importantly all of this was achieved under one system – limiting integration headaches faced by many operators.
‘We noticed that many companies where either working on paper or excel’ said Amy Poinsett. ‘Not only was this dangerous from a compliance perspective but it was costly as details tended to fall between the cracks’.
Despite the Federal Government being less than supportive, states which have legalized marijuana either for medicinal or recreational purposes have seen an explosion in the industry and some observers believe the industry in the U.S. could reach at least $20 billion by 2020.
Trends to Watch
While the retail explosion tends to get most of the interest, there are many trends to watch in the industry. First, is the recent FDA approval given to Epidiolex, a cannabidiol [CBD] oral solution used to treat epilepsy. This is big news as part of the Trump administration have been openly hostile to marijuana – e.g. Attorney General, Jeff Sessions, and former HHS Secretary, Tom Price.
While the pipeline for cannabis-based drugs remains rather thin, the approval of Epidiolex could speed up development in other areas such as a non-opioid pain relief option and for PTSD, among others.
But it is not just the FDA approval of Epidiolex which is making waves as a growing number of tech companies are moving into space as well. Besides the application and data and tracking systems, developers are also working on weed-themed virtual and augmented reality platforms – though one might question the need when the weed already makes you high.
Then there is the emergence of cryptocurrencies, pot-related ICOs, and blockchain in the space. These include applications for seed-to-sale transactions via the blockchain and the introduction of digital assets backed by the golden leaf itself.
In fact, the introduction of cryptocurrencies to space could help to solve the biggest challenges facing marijuana businesses – banking. This is largely because the Federal Government has dragged its heel on legalization and as such has created several challenges when it comes to banking.
But the tech development is not confined to cyberspace along. In fact, developers are also working on the application of 3D printing to make cannabis tools and materials scientists across the country are looking at ways to improve extraction methods – this could lead to more potent oils and compounds.
All told the cannabis market in the U.S. is just getting started and companies like MJ Freeway are well positioned to ride the boom. Even better for investors is the likelihood that marijuana is largely recession-proof. With the likelihood of a downturn on the horizon, this means that there is gold in those green leaves.
Disclaimer: This content does not necessarily represent the views of IWB.