Investors High on Cannabis Tech
It’s all about the picks and shovels for cannabis investors these days. Just like the early winners in the Gold Rush era, investors are increasingly betting on those early-mover companies that provide the tools for Cannabis Related Businesses (CRBs) to succeed.
When it comes to the Green Rush, there seems to be no shortage of deal flow for Cannabis Tech. Here’s a quick run-down on some recent funding announcements across the Cannabis tech sector:
Headset, a Seattle-based startup providing a retail business intelligence platform, just inhaled a $2.5 million round from Hypur Ventures, Salveo Capital, and Poseidon Asset Management. Headset’s software provides dispensaries with insights into their sales, promotions, and top-performing products in real-time, while providing industry trending data, similar to Nielsen, NPD or IRi for media companies.
Denver-based Wurk, a workforce compliance platform, has just added $2 Million to its seed round, bringing total funding to $3 million. Poseidon Asset Management led the extended round, with participation from Phyto Partners, Salveo Capital and The Arcview Investor Network.
Wurk provides HR and Payroll applications to CRBs to take care of their employees and stay compliant with government regulations. Wurk’s Workforce Compliance technology supports operators in 12 states with solutions like 280E reporting, state-specific employee on-boarding, and payroll management as part of its platform.
Flowhub, a point-of-sale software platform for marijuana growers and dispensaries, also recently announced that it has raised $3.3 million in a Series A equity financing, led by Green Lion Partners and Phyto Partners. Based in Denver, CO, Flowhub was founded in 2015 and offers platforms for both retail and cultivation that automatically report mandatory compliance data to state regulators via a direct API. According to the company, Flowhub has processed nearly $200 million in purchases across hundreds of dispensary locations and has attracted some of the largest regulated dispensaries in the country as customers.
“The technology solution Flowhub provides is critically important to operators, they can’t do business without it. This vertical is where we see billion dollar valuations in the coming years,” said Larry Schnurmacher of Florida based Phyto Partners, “We believe the Flowhub team will dominate the technology backbone of the cannabis industry and are proud to have Flowhub in our portfolio allowing our investors the opportunity to invest in this emerging industry.”
As the race to provide the next generation of tools for Cannabis businesses intensifies, investors are taking sides.
One thing is certain, those start-ups who are able to secure funding and get their solutions into the hands of growers, producers, dispensaries, and other CRBs during this early build-out phase will have a tremendous first mover advantage as this industry matures. The trick for investors is putting their money behind the right picks and shovels.