In the latest episode of the Cannacurio Podcast from Cannabiz Media, my co-host, Amanda Guerrero, and I discuss new cannabis licensing data out of West Virginia. We also speak with Justin Mayhall, Marketing Director at BioTrack, a leading seed-to-sale inventory management and dispensary point-of-sale software for the cannabis industry.
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Cannacurio Podcast Episode 3 Transcript
Amanda Guerrero: Thanks for joining the Cannabiz Media podcast, your source for cannabis and hemp licensed news directly from the data vault. We’re your hosts, Amanda Guerrero and Ed Keating. Ed, since the last time we spoke, what’s come through the data vault?
Ed Keating: Well, one of the biggest stories we’ve been following is West Virginia. They recently shared information on 285 medical marijuana license applications. What we found is there were 82 companies submitted the applications. That was kind of notable.
Also, only 34 of the applicants applied for only one license. So, what we found after we scrambled the numbers a bit was that 11 companies accounted for 44% of the applications.
Amanda Guerrero: Wow. That seems a little skewed there. Is that kind of distribution normal?
Ed Keating: No, it’s not. I mean, we’ve been tracking a lot of states since we began Cannabiz Media, and that definitely seems more kind of off the charts for it to be that concentrated. The other piece that factors in there and makes it interesting is they’re giving out a fair number of licenses. According to the regulator, it’s 10 growers, 10 processors, and a hundred dispensaries allowed.
Now, it doesn’t mean they’re going to give them out all in this first round, but that’s sort of the level they can go up to. Also, after looking through other licensed data, we found that 29 companies have applied for what we’d call a full stack. So, they’re trying to get at least one grow license, one manufacturing license, and at least one dispensary license. Kind of interesting in that sense.
Amanda Guerrero: Yeah, for sure. Do you think that most states allow that kind of vertical integration?
Ed Keating: Every state’s different and the subject of integration and stacking is one that all states seem to come up with their own schemes. In Oklahoma, you can get whatever you want. It’s $2,500, and you apply and you could get all three licenses for $7,500. Pretty good deal.
Amanda Guerrero: Oh my gosh.
Ed Keating: When Maryland rolled out theirs, their fees were very high, but they would cut you a deal if you were trying to get more than one or two activities. They had a different way of doing it.
Here in Connecticut, where I’m based, they stacked up the grow and processor licenses together. And then, the dispensary’s were separate. So, it is kind of different. That vertical integration is something that sometimes people just create on their own. That’s what these 29 companies have done.
A couple other things that we noticed is that this is really the latest medical marijuana program that’s coming online since Missouri. Now, we noticed that West Virginia’s population is less than a third of Missouri’s, yet they could approve up to a hundred dispensaries. Meanwhile, Missouri is only approving 192. So, it seems like they’re going to have a lot of dispensaries in that small state.
Amanda Guerrero: Yeah, no kidding.
Ed Keating: One observation is that the opioid crisis hit West Virginia pretty hard. So is this the way to sort of have different medicine in place so that people are not going after opioids?
One observation we had, in addition, the fee revenue was not insignificant. So, when the state gave us the data, they also said what the fees were for each license application. It appears that they’ve collected over $6 million in fees. By comparison, that would’ve gotten you 2,496 licenses in Oklahoma. Yet, only 285 applications in West Virginia.
Finally, kind of that high concentration of applicants, there were 11 companies that were responsible for 44% of the applications. That’s really the big takeaway. I think that the largest one we saw applied for about 29. Given that they’re giving out so many licenses, I’m sure that that company will probably walk away with at least a few.
Amanda Guerrero: Yeah, no kidding. Wow. I didn’t realize that there was such a difference in the disbursement of licenses between each state, Oklahoma and Missouri. I mean, that’s insane what you can obtain here in West Virginia.
But, as always, thanks to Ed for the data update. Just want to tune you guys in, on today’s show we’ll be joined by Justin Mayhall, the marketing director of BioTrack. Stay tuned.
Announcer: Since 2010, cannabis dispensaries, cultivation facilities and manufacturers have trusted BioTrack to securely and competently keep them in compliance while managing their businesses. With flexible solutions for both THC and hemp industries, customize more workflows, built-in machine learning, and data analytics that deliver actionable insights to the right people at the right time, it’s clear why cannabis companies in 37 states and nine countries depend on BioTrack.
For comprehensive cannabis software and business solutions that cover the requirements of compliance, seed-to-sale tracking, and data reporting in every state, there’s really only one choice, BioTrack. Go to biotrack.com today, for secure cannabis software solutions that you can count on.
Amanda Guerrero: Welcome back everybody. Today I’m joined by Justin Mayhall, the marketing director at BioTrack, and we’ve identified him as one of Cannabiz Media’s power users. Justin, welcome to the show.
Justin Mayhall: Hi, Amanda. Hi, Ed. Thanks for having me.
Amanda Guerrero: Thank you for joining us. We’re so excited to have you. Well, I would love to give our listeners some background information on who you are and what you do here. But, can you tell us a little bit more about how long you’ve been in the industry and what were you kind of doing before this?
Justin Mayhall: Yeah, so I joined Helix Technologies, the parent company of BioTrack, back in July of last year, but, in the cannabis industry, it works like dog years. So, I consider myself kind of a veteran now that the cannabis industry is still so young.
Before that I was in software marketing just in the healthcare side. I was the marketing director for an electronic health record company that produced EHRs for dialysis patients.
Amanda Guerrero: Oh wow. What made you transition into the cannabis space?
Justin Mayhall: Really, I was looking for a change and I feel like most people say they tried to get into the cannabis space for a couple of years. But for myself, I feel like honestly the cannabis space found me. It was just an opportunity that I saw to work for a great company that had been around. Really, I was looking for a culture that suited my lifestyle. So, I’ve certainly found that with BioTrack and Helix in general. I love the people that I work with and love what we do for the industry.
Amanda Guerrero: I love to hear that. That’s always a great feeling when you found the right company for yourself, and especially getting into this industry. It’s not easy lasting in cannabis. So, good for you in sticking with us. So, can you tell us a little bit more about what makes BioTrack unique in comparison to others?
Justin Mayhall: Absolutely. I feel like most people in the cannabis industry, have certainly heard of BioTrack, but what they may not have heard of is our parent company Helix Technologies. So, we have a line of four service products that we offer, BioTrack obviously being the most popular, but we also offer a line of digital security. We have an online hemp and THC exchange, and then a data analytics product.
So, the fact that we are able to take the technology and the data that we have and combine them into one solid place for, really, dispensary owners in any plant-touching business to go and be able to have the critical infrastructure services that they need to run their business and make business decisions intelligently, really sets BioTrack and Helix Technologies apart as a whole from our competitors.
Ed Keating: Justin, in terms of that point of sale, seed-to-sale market, what do you see as the dynamics there? Because, we’ve studied that market through our research where we try and find out from license holders what software they use, I’m curious sort of what dynamics you see at play there, especially as more companies have tried to come into that space but not all have been successful?
Justin Mayhall: Great question, Ed. You know, it’s funny. Inside of the Cannabiz Media software, whenever you go through the licenses, you can see, you guys have a filter for four point of sale software. I’m always amazed every time I click that open. I think the last time I checked there’s more than a hundred that you guys have listed in that database. So, certainly a very competitive landscape.
The one thing that I’m not sure people understand is the grasp that the big five competitors hold. I believe, I think you guys were part of a study that was done, that five companies control 80% of the marketplace.
Amanda Guerrero: Mm-hmm.
Justin Mayhall: So, for new companies that are coming into the space, it’s extremely hard for them to break in. I mean, especially if they’re trying to compete on price. In certain markets, certainly price is a factor, but people want reliability. Their licenses are at stake.
Whenever you’re talking about seed-to-sale and point of sale systems, if you mess something up, you can be out of business the next day in certain states. So, certainly compliance is a key factor that we put into every decision that we make when it comes to the BioTrack software.
Ed Keating: Now, one of the other things that I think BioTrack is specifically known for is you have some of the state contracts where you actually work with the regulator. So, you’re on the regulator side, helping those license holders in those states comply. I’m curious, how does that factor into your strategy and what does that mean for your business? Because, I would think, it’s like a blessing from the government. Like, “Hey, these guys are good. We trust them to handle our side of it.”
Justin Mayhall: That’s exactly right, Ed. Working so closely, hand in hand with the governments where we do hold the state contract, we certainly have an upper hand in understanding what new regulations are going to be passed down. So, we can get ahead of the coding and make the changes in our system necessary, so that really the workflows of our customers don’t change and they stay compliant.
I think it’s important for people who don’t understand exactly what the… Going back to that compliance piece, basically, making sure that you stay ahead of the regulations so that your customers do stay compliant, is certainly the only way to stay ahead of the game.
Ed Keating: Some of the research that I’ve been doing is to look at who connects to these state level systems, sort of across the landscape. So far, I’ve identified 300 companies that connect to some of the larger stateside software vendors, and it’s all about compliance. I mean, it’s really pretty amazing how far and wide that goes.
Once again, going back to BioTrack, I’m curious sort of what’s next for you guys? What new product launches have you been involved with, and any new initiatives that are coming that our listeners might like to hear about?
Justin Mayhall: Yeah, absolutely. So, obviously we’re always hard at work trying to stay ahead on the market and give our customers the best products that we can possibly put out. One thing that we’re extremely excited about, is the new Cannalytics product. That’s basically business intelligence and data analytics that plugs into the back end of the BioTrack system.
What it does, is it really gives dispensary owners and managers the data they need to run efficient and more… I guess it just gives them the ability to use data to make better business decisions, is what I would say about that.
So, we’ve only had that out now for a couple of months and we just put out some news that we just crossed over the 100 customer threshold. We’re seeing really good market adoption for that product, and we’re really excited about where that’s going.
Ed Keating: So, Justin, I’m curious who on the client side uses that? Is that the chief operating officer, is it the dispensary owner, is it everybody? Because, it’s a dashboard they could all see. How do they interact with what sounds to be a pretty powerful platform?
Justin Mayhall: Absolutely. It’s a web-based platform. What we’re seeing is it’s the managers, it’s the COOs, depending on the size of the dispensary. What it does is it basically gives them the data that they need to make business decisions.
So, for example, one of the features that it has is a suggested reorder time. Now, most of the time when you’re talking about inventory management, most dispensaries will just set a minimum number and when your inventory gets to that minimum number, you know to reorder.
With the Cannalytics system, it uses business intelligence and data analytics to look at the sales of the past two weeks to 30 days. Based on the amount of units that are selling out of that product, it will give you a custom reorder time. That way, you know exactly when to reorder, so that your money’s not tied up in inventory that’s not moving. That’s just one of the great features that comes along with that product.
Ed Keating: Kind of like an Amazon dash button for supplies. So, really tailored to your own needs. That sounds great and I can imagine very useful, especially in this market. One last question I wanted to dig into, just sort of as you look at BioTrack, what’s been the biggest achievement that you’ve seen while you’ve been there?
Justin Mayhall: Yeah, so we certainly are proud to be named the 32nd fastest growing technology company by the Deloitte Fast 500. We got that honor just a couple of months ago. It’s important to know that that’s not just in the cannabis space. There’s a lot of big names on that list, and to be named 32nd is certainly an honor that we take pride in and want to continue to move up on that list.
Amanda Guerrero: Everything you were just sharing about Cannalytics and kind of where BioTrack has been… I’ve been following you guys for years and kudos to you. It sounds like it’s just such relevant and important data for teams to know about.
But switching gears here a little bit, Justin, I wanted to learn a little bit more about some of the ways that you and your team utilize Cannabiz Media. How does our tool compare to other sales tools you used before? Yeah, what are some of the ways that you use it?
Justin Mayhall: Well, certainly I am a huge fan of Cannabiz Media. I can certainly say that I can directly attribute some of not only BioTrack’s success but Helix Technologies’ success as a whole, to the tool that you guys provide.
Primarily, as the marketing director, I use the tool for the email capabilities. Without you guys, I would not have the ability to reach license holders and states that are not our customers. I just wouldn’t have a means of getting in front of them with our message.
So, primarily, I use the tool for the email marketing capabilities. But most recently, I’ve certainly started using the data that you’ve been putting out. Specifically, you add in the Cannacurio blogs. The information that you guys put out in those Cannacurio blogs drives the decisions that I make in marketing as to what states I need to be reaching out to, who I need to be sending what messages to. So, really taking the program as a whole and putting it together, it’s certainly been a wonderful and powerful tool for us.
Ed Keating: That’s great to hear. Especially, for a while Missouri was a hotspot and we had to remind some of our clients that there were over 3000 applicants there. Not every one of them was going to get a license, but for you to have a dialogue to reach out to them to say, “Hey, have you made your compliance software solution yet?” Or, “How are you going to connect to the state system?” It’s a great way to start to build up that awareness of your product.
You know what, the same will be true with West Virginia, as their program gets rolling. Not all those folks are going to get licenses, but I think with the list we’ve boiled down to, the ones that have stacked them up are probably going to walk away with at least one.
Amanda Guerrero: I wish you guys could see how big my smile is. We record our podcast remotely, so everyone gets to obey quarantine laws, quarantine rules rather. But I’m really, really so pleased to hear you say that, Justin. That’s why we started the Cannacurio podcast as well, to help give you guys some other ways to access the data.
But, are there any other tips or tricks that you’d like to share with our audience about some of the ways you’ve been able to successfully use Cannabiz or generate leads?
Justin Mayhall: Yeah, I guess one thing that I would share is just make sure that you know your audience. Emailing someone in Oklahoma is not going to have the same message or the same tone as emailing someone, let’s say, in Oregon or in another established market.
So, just understand that where these people are at along their journey for opening up their business. If you’re emailing just blanketed emails across all 50 states, you’re not going to get the results that you’re looking for.
But, if you really take the time to understand where people are at and the messaging that they need to hear, I think you’re going to find a lot of success with the email marketing tools. Especially, the ones that you guys use in the platform that you guys have, makes it so easy to segment. I mean, you have so many different filters that you can use to segment the licensees’ lists.
It really is user friendly and I certainly do love the email builder. A lot of companies that specialize only in email marketing don’t come close to having the versatility that you guys have in the email builder. So, certainly thankful for that.
Ed Keating: Well, that’s great. I’m sure our listeners will appreciate those tips and guidance. So, taking a step back, one of the things we’d like to ask our guest are, what kind of trends do they see at play in the industry now? I mean, we’re sort of in the middle of quarantines nationwide and globally. That’s one that everybody is dealing with, but I’m just curious what you see from the unique spot that you have at BioTrack?
Justin Mayhall: Yeah, it’s interesting. Obviously, I have been in a little less than a year on the cannabis industry, but what I see is that states that don’t have legalization yet, whether it’s in the medical or recreational side, certainly have a lot of models to look at that Washington and Colorado and those early adopter states didn’t have.
So, I think that there’s a lot of data out there. A lot of data that you guys highlight that allows states that are thinking about bringing on medical or recreational, they can see how it’s been rolled out, what’s worked, what hasn’t. I really think that they’re going to be able to use that data to find a program that works for the residents of their individual states.
Ed Keating: Yeah, I would agree. I think this notion of the next state watching the last state really makes a lot of sense. We saw that in Pennsylvania, seen what happened in Maryland where they didn’t have enough minority representation. I think we saw it out in Illinois, where they look back at Massachusetts and everybody taking trips out to Colorado to see what it’s like there.
It does provide some good kind of imprinting, I think, for the states that follow. There’s still more states out there that are now contemplating these programs, so we’ll definitely see how it plays out in the longterm.
Amanda Guerrero: Yeah, I totally agree, Ed. But, thanks so much, Justin, for coming on the show and joining us today. We really look forward to hopefully seeing you after quarantine and watching you and BioTrack continue to grow and experience success. So, thank you so much again for joining us.
Justin Mayhall: Thank you guys so much for having me. Thank Cannabiz Media for putting out such a great tool, and for you guys for the Cannacurio blogs. I’d say keep up the great work.
Amanda Guerrero: We’re going to take a quick commercial break and when we come back, we’re going to get some new announcements from Ed and updates as to what’s to come down the line for the Cannacurio podcast. Stay tuned. What’s coming up next? What markets or what announcements do we have to look forward?
Ed Keating: So, there’s two things that the team’s working on right now. One of the most important, is what I call hemp season. A lot of the hemp programs expire at the end of the year. December 31st, the licenses are over. Some states allow for renewals, or some don’t. What we found, is it’s best to go right to the regulator and get new information, sort of in mass. So, we’re embarking on that.
Actually, we have a lot of requests out now, so they’re pending because it’s an agricultural crop and it’s farming season in a lot of places. So, people want to start getting their seeds in the ground, usually by April depending on where they are locally. That’s a big focus of the team. So, we hope to get a lot of new information in and we’ll be working to assimilate. If that license is a renewal from last year, that’s great. If it’s a brand new license, because the old ones have expired, we’ll manage those as well.
The other piece that I’m working on, and this is sort of a long-term project, is as I referenced before in our conversation with Justin, that there are a lot of vendors that connect into the state systems. I found 300 so far, and they fit in a lot of different categories, financial compliance, seed-to-sale, point of sale, ERP. There’s just a lot of vendors out there, and it’s just fascinating to see which states they’re in.
In some cases, the vendors only connect to one state. So, they’re what we call sort of a one-state wonder, versus those that connect to every single state that we can find data for, which right now is probably about a dozen. So, I’m hoping to do a lot more on that in terms of sharing that information and that analysis.
Amanda Guerrero: Wow, that sounds… I know the vendor data is something that our current subscribers as well as prospective subscribers have been eager to receive from us. We’ve done a great job so far of providing that, so I’m excited to see what other information you and the team come out with.
Ed Keating: Terrific.
Amanda Guerrero: Thanks so much for joining us on today’s podcast. Justin, once again, thank you so much. We’re your hosts, Amanda Guerrero and Ed Keating. Stay tuned for more updates from the data vaults. We’ll be coming to you live next week, so looking forward to it.
Ed Keating is a co-founder and Chief Data Officer of Cannabiz Media and oversees our data research and government relations efforts. He has spent his whole career working with and advising information companies in the compliance space. Ed has overseen complex multijurisdictional product lines in the securities, corporate, UCC, safety, environmental and human resource markets and focuses on workflow products over the last twenty five years. During that time he has worked for both startup and established information companies where he has led marketing, product management and sales organizations. These companies include Wolters Kluwer/Commerce Clearing House, CT Corporation, EDGAR Online and Business & Legal Reports. At Cannabiz Media Ed enjoys the challenge of working with regulators across the globe as he and his team gather corporate, financial, and license information to track the people, products and businesses in the cannabis economy. Ed graduated from Hamilton College and received his MBA from the Kellogg School at Northwestern University.