Cannabis Industry's Top Tech Talent Answers Key Questions: Legalization, Challenges & Consolidation

As an emerging market that is not yet federally legal, operating in the cannabis industry can be quite complicated. Regulations vary from market to market, changes happen often and scaling alongside the rapidly growing industry can be challenging.

These top tech minds in cannabis exemplify the resilience, grit and intelligence it takes to persevere through the hurdles and provide great cannabis software.

David McCullough, Chief Technology Officer, Akerna

Prior to being appointed CTO of Akerna KERN, David McCullough served as Akerna’s Executive Vice President of Product & Engineering for the last five years, overseeing all software development, development operations, quality assurance, automation, systems and security operations.

McCullough has over 16 years of Software Engineering experience. Before joining Akerna, he was the CTO of StudentPublishing.com, where he actively managed the technical aspects of Student Publishing’s sale to and systems integration with lulu.com. McCullough also has extensive government systems experience and was a professor at New Mexico State University where he taught courses in data communications and networking.

• What have been the struggles of working in cannabis tech versus other mainstream industries?  

Although cannabis has been legal in various American markets for over 20 years, it is still an emerging market because it is not federally legal. The lack of federal action has brought issues such as various mainstream technology providers not operating in the industry and federal banks being barred from working with cannabis businesses, causing business optimization and financing problems. 

The cannabis industry is constantly evolving, from new markets legalizing, changing regulations, ongoing modernization and more. Keeping up with that evolution is the challenge we work to solve for cannabis businesses through technology.

• How would federal reform impact cannabis technology? 

Legalization  

When the US federally legalizes cannabis, the market will graduate from emerging to mature market. Federal action will create a framework that states will have to adopt to maintain compliance. However, like alcohol, each state and jurisdiction will set specific rules and regulations, but there will be overarching laws and standards for the industry. 

For Akerna, we have been building our business for this inflection point. Knowing that regulations will vary per state and jurisdiction, we’ve built our compliance gateway so that it can quickly integrate new requirements without having to re-write code for each product offering, which allows our clients to scale rapidly with the industry. 

SAFE  

The SAFE banking act will legitimize the cannabis industry. So many of the issues operators and ancillary providers face today are due to the nature of cannabis being a cash-based business. With access to banking opens greater capital, payments, and accounting feasibility to the industry. 

Through our current partnerships with payment providers, the passage of the SAFE bill will allow our clients to accept credit card payments, which will integrate with our robust compliance solution to create a comprehensive point of sale solution.  

• Consolidation is happening in the cannabis industry. How have you, as a CTO, navigated and/or contributed to the trend?

For Akerna, we've been building our business to meet the industry's needs. As operators grow through new markets and acquisitions, we have worked to acquire cannabis businesses that answer those needs, creating an ecosystem of products and integrations that will grow with their companies, from the day they apply for a license to when they become a multistate operator (MSO). Our acquisitions and product launches give our clients a range of tools to run any size business.  

I have evaluated each potential acquisition by looking at potential targets' aspects of functionality. I have prioritized compliance through each strategic acquisition – which is table stakes for the cannabis industry - to become more efficient with industry changes. This has maximized my team's output by preventing the need to make changes across multiple business units.

Marc Sherman, Chief Information Officer of HERBL

Marc Sherman is a highly-skilled Information Technology Executive with over 20 years of experience designing, delivering and supporting innovative Enterprise Supply Chain System solutions that drive business growth and profitability for all stakeholders.

Prior to joining HERBL, Sherman was vice president, information technology for FedEx FDX supply chain, a $1.6B subsidiary of FedEx focused on Third-Party Logistics in multiple verticals including technology, retail, consumer products and healthcare across over 130 sites in North America.

Before joining FedEx, Marc served on active duty in the United States Air Force for 20 years where he held multiple Operations and Logistics management positions in the United States, Europe and Southwest Asia. He holds a Master of Business Administration degree in Information Systems and is a former adjunct professor with Northwood University.

Sherman currently lives in Keller, Texas with his wife Caroline.

• What have been the struggles of working in cannabis tech versus other mainstream industries?

Because cannabis is still federally illegal many technology providers won’t work with cannabis companies. This significantly limits options when selecting applications, services, and tools. Further, the primary cannabis track and trace system used by many states has limited capabilities and is a single point of failure. As the cannabis vertical grows these systems must be improved or replaced to handle the increased scale that is inevitable.

• How would federal reform impact cannabis technology?

Legalization

I believe federal cannabis legalization will provide the mechanism for technology providers to remove the restrictions they currently impose on their products and solutions in the cannabis vertical. Further, I see significantly increased demand for those products with many cannabis companies looking to upgrade or improve their legacy solutions.  

SAFE

The SAFE banking act will be a game-changer. Once approved, the cannabis community will have access to the full range of financial services which should fuel significant rapid industry growth. Cannabis companies need to ensure their technology solutions are prepared to handle the increase in scale across the entire supply chain

• Consolidation is happening in the cannabis industry. How have you, as a CIO, navigated and/or contributed to the trend? 

When I joined HERBL, I had the unique opportunity to develop a technology platform from almost the ground up. With leadership fully behind the strategy to build for the future we specifically designed our technology platform with industry-leading solutions to handle rapid growth. As consolidation in the cannabis industry occurs it will drive scale. Having this proven platform in place puts HERBL in a unique position to continue to provide proven best in industry solutions to meet the challenges that scale brings.   

Marc Lopez, CTO, Drop Delivery

Marc Lopez

Marc Lopez is the CTO and co-founder of Drop Delivery, the cannabis industry’s only all-in-one delivery technology solution for retailers. A twenty-something serial entrepreneur, Marc previously co-founded Greenlight Technologies, a leading order-ahead and digital loyalty software in the cannabis industry, which was acquired in 2018 by publicly-traded Leafbuyer Technologies.

See also: A Deep Dive Into The State Of Cannabis Fundraising (And 5 Emerging Companies To Keep An Eye On)

Before jumping into the cannabis industry, Marc co-founded two vape industry software companies, the e-commerce platform Vape Block and the peer-to-peer marketplace Vape Mail in 2015, where he built the technology that both platforms ran on. The motivation to develop a peer-to-peer marketplace came from his previous startup, Uniform in 2015, a peer-to-peer marketplace for the fashion industry.

While in college, and with his current Drop Delivery co-founders Vanessa and Jade Gabriel, Marc co-founded eSociete in 2011, a shopping platform for millennials to shop for their favorite fashion brands from all across the web in a simple, entertaining and engaging way.

• What have been the struggles of working in cannabis tech versus other mainstream industries? 

One key challenge has been around third-party providers. This industry’s perception is high-risk because of federal prohibition for many of them. We have to constantly think about how their services work for our clients and utilize them so that their services don’t get shut down because they are a cannabis company.

One of the best examples of that right now is SMS marketing messages. Because of federal prohibition, we have to constantly change our internal SMS marketing rules to ensure our clients aren’t negatively impacted by new SPAM rules or hit with fines by SMS providers. These rules seem to update monthly.

However, the reality is that we are open about our clientele and about who we are to our service providers rather than hiding it from them. We want to build long-term relationships, and the only way to do that is, to be honest. Most will work with us - giving us a heads-up to rule changes and going through them in detail.

• How would federal reform impact cannabis technology? 

Legalization 

SMS marketing becomes more straightforward and ultimately would follow the same rules as alcohol or tobacco. 

One place I think we would see an instant boost in the qualified talent pool. There is still such an incredible amount of stigma that many people are afraid of taking the plunge. Even when they do, I often see they won’t update their LinkedIn for fear of future consequences. We know there are incredibly talented people who, with federal legalization, would be chomping at the bit to work at a fast-growing technology startup. 

SAFE 

If SAFE Banking passed, payment processing for online ordering would open up. Right now, most banks will not touch cannabis because of federal prohibition. With SAFE Banking, these same banks would open the same services they provide mainstream businesses to cannabis. That would mean you could shop online for cannabis using all the same payments options you can use anywhere else - from Paypal to credit cards.

• Consolidation is happening in the cannabis industry. How have you, as a CTO, navigated and/or contributed to the trend?

The founding team at Drop Delivery first co-founded Greenlight acquired Greenlight Technologies, a leading order-ahead and digital loyalty software in the cannabis industry, which was acquired in 2018 by publicly-traded Leafbuyer Technologies after only eight months of launching. So, we have been through the process once before.

What I will say about Drop Delivery is that we wanted to build an all-in-one solution from the beginning. I believe we have built our core foundation and created value for the industry. We are keeping an open mind about the future and different potentials, whether that’s as an attractive M&A target or going public ourselves. But, we know we can continue to make this platform better for our customers and help the industry grow into a new phase of e-commerce and delivery.

Navin Anand, Chief Technology Officer at springbig

Navin graduated from Northern Illinois University with a Master's in electrical engineering and a Master's in technology and management. Navin has over 15 years of experience in software engineering including leading a team of 100 engineers at Verifone, one of the world’s largest multinational payment processing and POS solution providers. In his time at Verifone, Navin crafted solutions for blue-chip brands including Mcdonald's MCD, YUM! Brands YUM and Visa V.

Navin is recognized as a data-driven leader and problem solver who is able to streamline the software engineering delivery and QA process through advanced systems automation and project management, reducing time to delivery and aligning various IT sub-departments into a common system that speaks the same language.

Earlier this week, special purpose acquisition company Tuatara Capital Acquisition Corporation TCAC announced that it had signed an agreement for a business combination that would result in springbig’s public listing.

• What have been the struggles of working in cannabis tech versus other mainstream industries?

The social stigma around Cannabis to attract talent is a reality. We have faced issues with local universities that are not willing to work with us, which is unfortunate.

The silver lining is that when we do get candidates who speak with us, they realize that this space on the contrary is much ahead of the so-called mainstream industries.

Our engineering team, our customer-facing teams have such infectious energy and are always on the lookout to make it better for our customers, which I would say you might not see in other places.

• How would federal reform impact cannabis technology?

Legalization

Legalization of the cannabis industry at the federal level would be a huge step in the right direction for US businesses. The growing research and breaking the stigma are powerful incentives.

We would obviously see an increased use of the products, leading to improved tax revenues, US job growth and many more investment opportunities. In fact, we would see many more unicorns emerge in the space providing a wealth-making opportunity for this generation.

SAFE

Legalization will be a positive step and the cherry on top would be the SAFE banking act, which would support bringing back many more SMB cannabis business opportunities that might have been shut due to the pandemic. We might also see a lot more capital that would be invested by various investment firms and traditional banks. This would only lead to larger corps from other so-called traditional industries like pharmaceutical and cosmetics sectors getting motivated to take active participation leading to more R&D and wider use of Cannabis products. By having the SAFE act approved we essentially open up avenues like e-comm and cashless payment models that are widely adopted in other places. At a grassroots level, this helps with the safety aspect and well-being of owners and workers who currently deal primarily with cash.

• Consolidation is happening in the cannabis industry. How have you, as a CTO, navigated and/or contributed to the trend?

Cannabis tech is an industry of start-ups, wherein we have a lot of companies that are trying to go above and beyond finding solutions to help customers in smarter and better ways.

We at springbig have contributed to this trend by acquiring a company called Budtender last year and their product has been integrated into our master platform again to help our customers.

Apart from this acquisition, we are building our platform to be an agnostic cloud-based micro-service architecture that helps partners (say a new POS provider, e-comm startup, inventory management) integrate with ease and fast. Other areas where we have been keen are investing in our current team and adding talent with domain expertise in advanced topics such as computational Mathematics and algorithms that are AI/ML-driven for creating solutions so our customers use their data in a better and actionable manner.

Más contenido sobre cannabis en Español en El Planteo.