There’s no denying that the cannabis industry is exploding at exponential rates, and venture capitalists who aren’t afraid to jump into a new market are discovering the dollar benefits. Cannabis sales were $6.7 billion in 2016, up from 30% during the previous year. And according to growth reports, the upward trend shows no signs of slowing down. Currently, 28 states have legalized marijuana in some way. As more states jump on the bandwagon and legalized states become less strict regarding usage, the potential will only widen.
The growth of the cannabis industry has spawned a series of companies who can now operate freely and profit legally. For startups looking to capitalize in a growing market, it’s best to partner with an experienced firm who can help grow the business. For example, top marijuana consulting company MJ Freeway is a data-driven business with over $5 billion in sales transaction in the cannabis industry. Because marijuana is such a new space, it can make entrepreneurs feel hesitant to jump into the unknown.
The following startups are blazing a trail in the cannabis space and have managed to secure funding. More are expected to follow in their footsteps as the industry finds its footing. Here are a few leaders in the marijuana arena:
Confident Cannabis is a free software program for cannabis testing labs. It is currently the biggest real-time industry database in the world. The platform connects dispensaries with growers, and uses data to allow these parties to make better growing and purchasing decisions. This also brings greater product transparency; the management system provides users with a detailed analysis of each batch, detailing the strain, ingredients and quality.
The producers are able to generate automatic reports and graphics displaying product results, and they can use this data to sell their marijuana at higher prices. The startup participated in Y Combinator (the most popular Silicon Valley incubator) and secured $3 million in seed funding. TechCrunch referred to the company as the “stock exchange of weed.”
Eaze is a California-based marijuana delivery company. Eaze provides customers with access to high quality, lab-tested products. Users can track the order progress route, and receive it right at their door. Eaze considers itself the “Uber for weed” and is now available in over 100 cities in California alone. The startup also has a medical service, Eaze MD, that helps individuals secure medical marijuana via a one-time $30 consultation fee. They recently raised$13 million in Series B funding and plan to use it to continue expanding.
MassRoots is a social media network for the cannabis community that boasts over 900,000 users. The MassRoots iOs and Android apps are used to connect with fellow smokers, share cannabis experiences, and connect with dispensaries. In 2014, the company raised $475,000 during Series A at a $5 million valuation, and a year later raised $850,000 in Series B. MassRoots was one of the first IPOs from the cannabis sector.
Niwa is the first smartphone-controlled growing marijuana system. The platform comes equipped with an interactive interface to help keep track of plant progress, and alerts you with next steps. The app launched on Kickstarter, and raised $150,000 of its $100,000 goal. While it works with a variety of plants, marijuana planters can use it just as easy as other planters.
Baker Technologies is customer engagement platform for cannabis brands and dispensaries. Their goal is to use data to turn anonymous visitors into loyal customers through personalized marketing and online shopping. According the company, it provides the perfect recipe for a successful dispensary. The average Baker client sees a 300% ROI and 60% traffic increase in just 10 weeks. In August 2016, the startup raised $1.6 million in seed funding.