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High technology: How IT is fueling the budding cannabis industry

Katherine Noyes | Aug. 23, 2016
From APIs to dispensary robots, new innovations are popping up like weeds

"Our goal as a company is to legalize cannabis responsibly in North America and eventually the globe through technology," Sherman said. "Regulators need to see that it's better to keep cannabis off the black market by making it traceable. We want to show the world this can be done responsibly."

La Conte's Clone Bar and Dispensary in Denver saves countless hours by using Flowhub to maintain compliance with Colorado regulations.

"Before Flowhub we had to manually upload data to the state every night," said Zach Howell, supply chain manager for the store. "That meant taking screenshots of spreadsheets and cutting and pasting. It was a lot of work."

Today, all sales data for the day can be uploaded automatically into the state's database in a single step. The system also gives La Conte's a live, real-time view of its inventory.

Upon entering the dispensary, customers have their ID scanned both for their date of birth and for their state of residency. That process checks them into La Conte's system, so that when they're ready to make a purchase, there's no uncertainty about what they can buy.

In Colorado, out-of-state residents are not allowed to buy more than an ounce of marijuana, for instance. It used to be up to employees to quickly figure out what combination of products -- flowers, edibles, and so on -- adds up to that much. Now Flowhub's system does it automatically.

"If we know your ID is from out of state, it locks the transaction if you go over an ounce," Howell said. "They've basically put the regulations into a system that forces users to play by the rules."

Howell, meanwhile, can tap into Flowhub's system and handle any problems remotely. "If I'm on a plane and a manager calls to say we're out of something but have it in back stock, I can move it into their inventory for them to sell."

flowhub ceo kyle sherman cfo chase wiseman 

Flowhub's cofounders: CEO Kyle Sherman and CFO Chase Wiseman.

The technology is enabling many of the same processes and capabilities that have long been standard in other parts of the retail world but adapted with an industry-specific twist. As the cannabis industry grows and matures, that trend promises to continue.

"When I first started in this industry, it was a bunch of people who knew how to grow weed but had no business sense whatsoever," Howell said. "Today the big companies out there are starting to get accountants and HR departments. The companies that are surviving are saying, 'we need a CEO, we need a business model, we need a plan. We need technologies to streamline our processes and make sure we're compliant.'"


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