Treez Holds Fireside Chat With Intrinsic Capital Partners' Jerry Stahlecker

Image Provided by Pexels

The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.

Benzinga’s Cannabis Capital Conference took place earlier this month, bringing some of the leading investors and entrepreneurs in the cannabis space together in a two-day event to talk about the rapidly evolving industry landscape, exchange investing insights, and share ideas about how to address the key challenges in the cannabis market.

During the conference, Jerry Stahlecker, a Partner with Intrinsic Capital Partners, and John Yang, CEO, and founder of Treez, met for a fireside chat to talk about the future of the cannabis retail market and where Treez, a leading provider of an enterprise retail commerce software platform and an Intrinsic Capital portfolio company, fits into that future. Here are the highlights from their conversation.

What Is Treez Enterprise Cloud Retail Commerce Platform?

The Treez platform automates the retail supply chain for cannabis companies by offering software solutions that address point of sale (POS), supply chain management, payments, and data analytics. “Our mission is to streamline retail and supply chain operations,” Yang said during the fireside chat. “It’s really to drive the growth of this industry through our platform.”

For retailers, the POS side of the platform can help with compliance, sales, and managing inventory. For brands and distributors, the data and application programming interfaces (APIs) allow for better visibility and better commerce.

While other software companies servicing the cannabis space exist, Treez offers a breadth and depth of services that really touches on a lot of the most prevalent challenges in the cannabis commerce industry. Namely, a lot of retailers rely on manual methods for important processes ranging from assortment planning and compliance reporting to omnichannel sales. They’re also handling a lot of cash because of state restrictions that enforce cash-only transactions.

The POS offerings on the platform automate or streamline a lot of those unique complexities in a way that other enterprise software not tailored to cannabis companies doesn’t. Additionally, it isn’t built into other cannabis-specific software to the depth that Treez has built it into its pioneering platform.

Beyond POS offerings, Treez has integrated data and analytics into those sales and transactions to better support retailers as they focus on growing their businesses. It provides market benchmarks and dynamics, as well as visibility across pricing and different channels of sales.

Where Does Treez Fit Into the Cannabis Market?

In the five years since Yang founded the company, Treez has grown tremendously, becoming a recognized name in the states in which it operates. “Today we’re powering over 41% of California and about 20% to 30% of other states we’re focused in,” Yang said during the Cannabis Capital Conference. The company currently controls a 15% share of the nationwide software space, which boasts a total accessible market (TAM) of nearly $12 billion. 

With 36 states across the country that have already legalized medical cannabis — 18 of which extend that to recreational use — 71% of Americans already live in a state where cannabis use, either medical or recreational, is legal. 

As legalization grows, the market is projected to reach $100 billion in the United States alone, and Treez has taken major steps toward positioning itself as a leading facilitator of that rapidly growing new market.

The company has seen its revenue grow by almost 600% in the last 3 years, driven largely by the rapid increase in recurring revenue from subscriptions. This impressive performance put the company on the Inc. 5000 list of top growing companies as well as the San Francisco Business Times Fast 100.

Where Is Treez Headed?

Yang said Treez still has ambitious growth plans for the future — aiming to expand from its current reach of seven states to every state where medical or recreational marijuana is legal by 2025. 

Treez also plans to add more robust direct-to-consumer (DTC) capabilities to its software. State restrictions make it difficult for cannabis brands to sell directly to consumers so, “many of our brand partners are working on a DTC model through our platform already,” Yang said.

Treez says it has been able to facilitate that more convenient consumer model because it already allows its large pool of retailers and delivery operators to share inventory levels with their supply chain partners and use APIs that enable brands to complete transactions and sales that can then be sent directly to retailers for fulfillment. 

Through the Treez platform, brands can create a DTC experience for consumers while continuing to comply with state and local regulations.

“That experience is critical to the growth of this industry,” Yang said. “Consumers want choice. Consumers want convenience. “

Although it’s already positioned to facilitate a DTC consumer model, Treez plans to invest more into its platform to simplify this process and further enable a convenient, consumer-friendly experience.

“Federal legalization is inevitable,” Yang said, “and we fully aim to be the platform that is supporting all the players in this game.”

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.