The company Confident Cannabis was launched less than four years ago by four Stanford Business School alums. Today, 50 percent of the legal cannabis produced in the U.S. across 25 states passes through the Palo Alto, Calif-based company’s lab-testing platform, which allows business-to-business buying and selling of cannabis. Wholesale, which was created by Confident Cannabis, will launch in Michigan later this month as the only lab information management system made for the cannabis industry. Brad Bogus, vice president of growth and marketing for Confident Cannabis, said Michigan’s marijuana market is unique, and will be highly competitive in the country.
What does the Wholesale platform do?
(It) lets buyers and sellers see what’s on the market, find new products and put in order requests. And then they normally will begin negotiations.
It sounds like the Ebay of weed.
This is like an AutoTrader or an Ebay for cannabis products, except that the actual transaction doesn’t happen on the platform. Banking and financing and federal laws are preventing that. So basically people come to our platform, (licensed operators) find new products, they find products that fit their exact parameters, whether those are chemistry parameters or pricing and weight parameters. That vendor gets contacted, (and) they can accept the order request and then the two parties are put in touch to do the deal.
How else do legitimate marijuana business deals get done these days?
The only other way is a very manual, very tedious process and it sort of takes a lot of different forms. A lot of these different types of communications are happening just via text message or random email threads. Sometimes it’s happening on Instagram. I would argue that Instagram is probably our biggest competitor, because most cannabis companies are using Instagram to market themselves.
Social media. Of course. Don’t people communicate in person anymore?
There’s also sellers, cultivators and extractors going to retail shops, kind of door knocking. The problem with this process is that it takes an extraordinary amount of time. (We are) streamlining the entire process, putting it into one place and ensuring that what (customers) are seeing is trustworthy so (they) don’t have to worry about overly vetting it. We have 100 percent of the licensed supply in Michigan on a platform already through lab testing.
What’s your take on the Michigan market?
The supply dynamics are very weird in that I’ve never seen such a sellers market like you see in Michigan, which does present some opportunities for those licensed operators. I think it’s an interesting market. I think it has a ton of potential and there’s some stuff going on in Michigan that provides it potential that other states don’t have going for it.
What we have found is that anyone who is selling out of their cannabis is not making enough money. They’re leaving money on the table because they’re in a position where buyers are having to scramble over each other to get access to this supply. There’s a lot that they can take advantage of right now. We’re going to do what we can to help buyers get in front of some of their competition, especially unlicensed competition. Because there’s plenty of unlicensed buyers still in Michigan.
There’s been a big push for equity — getting more women and people of color — in the industry in Michigan. How important do you think that will be?
As a company, we care very much about corporate social responsibility, especially when it comes to setting up a market correctly, ensuring that there’s equity and a restorative justice element. Michigan’s got an equity initiative in the law, but it’s not what it should be. Other states and other cities that have had equity initiatives as part of their regulations, they’ve realized that the only way that those can actually have an effect is if there’s money at the table. Like giving resources, giving coaching, helping write business plans.
Why does that matter?
Ultimately, you can’t start a cannabis company without money. Most of the people that need this assistance through these initiatives don’t have access to capital. We’re seeing this (in other markets). Los Angeles has made this realization. Portland has made this realization. They’ve started to work on finding ways to use tax money to divert to equity applicants as a form of grants or loans. This is what needs to really take place for Michigan’s equity initiative to have any actual teeth. And I think there could not be a better state for such an initiative to really be evolved and address the ills of the sort of environment that they operate with them. This is one area where Michigan can really stand up to be competitive nationwide.
MiBiz food and agriculture news coverage is supported by Dan Vos Construction. For more information, visit danvosconstruction.com. This sponsorship is advertising. It has no effect on editorial consideration in MiBiz.