Growing and selling legal pot isn’t like most other businesses.
There are the state regulations, which require rigorous tracking of each plant from “seed to sale,” as they say in the industry. There are all of the uncertainties that come with agriculture.
Add to that the need to keep up with orders, shipments, deliveries and retailers’ unique preferences: Which cannabis strains are in vogue? Which edibles are flying off the shelves? And which kinds plants should growers be cultivating with their limited resources?
“Right now it’s a pain the butt,” Aaron Wood, co-founder of Emerald Peaks, a Seattle packager and distributor of edible, topical and other cannabis products, said of tying to track all of the nuances and complexities of the pot business. “It’s not fun.”
Wood’s company is one of the first processors using SORO, a new Seattle-based cloud software suite designed especially for cannabis growers and packagers. There are a lot of other software tools out there aiming to serve the pot business, but so far, Wood said, SORO has been the one that puts just the right information — orders, deliveries and customer relationship data — in front of his teams, whether they’re on their laptops or their phones.
“They’ve knocked it out of the park on that,” said Wood, who is just beginning to deploy SORO’s sales tool.
SORO was dreamed up by Jerry Tindall, a 33-year-old Seattle native working out of his apartment in the city’s University District neighborhood.
The legal cannabis industry in Washington state is structured into three sectors — growers, packagers and distributors, and retailers. SORO is designed to serve the wholesale and production segments of the industry — that is, growers as well as packagers and distributors like Evergreen, Tindall said in a recent interview.
SORO’s goal, he said, is to simplify the avalanche of highly complex data moving through cannabis operations so pot companies can identify key information and act on it. For example, he said distributors want to pinpoint the unique preferences of each retail customer and growers want to spot trends in the market so they can decide which strains of pot should be planted to meet demand. He said pot business owners have been frustrated by the scarcity of apps that can elegantly tie all the facets of a cannabis business together.
It doesn’t help, Tindall said, that a good number of today’s pot entrepreneurs came straight out of the black market and don’t have a lot of experience with inventory and sales analytics software.
“The guys who know how to grow weed are not, shall we say, high-power corporate professionals,” Tindall said.
SORO’s first module, for sales, was available to customers in October. The software came out of beta last month. The company is developing two other modules which haven’t yet been released — one for crop growth and another for analytics and BI, which Tindall expects to roll out in the third or fourth quarter of this year.
Each of the modules can be used as stand-alone apps or integrated for use as a platform.
SORO plans to charge each customer between $400 and $1,000 per month, depending on how many modules the customer is using.
Tindall had been taking a break from working in IT last year when he struck up a conversation with a friend in the pot business about software designed for cannabis companies.
Tindall recalled in a recent interview how his very frustrated friend described in all-too-colorful language how inefficient and clumsy the current offerings were.
“He showed me these systems,” Tindall said. “I go, ‘Dude, there’s a better way to do this. I’ve solved a lot of these problems in the IT world before.’”
Last year, Tindall set out to build software that directly addresses the unique complexity of the cannabis industry in an elegant way — to actually solve the business problems that cannabis raises. Tindall said he tried to learn everything he could about the marijuana industry. He attended industry meet-ups, talked with lawyers, growers and others.
“I started putting screenshots and mockups in front of people in the industry,” Tindall recalled. “They were, like, ‘Holy crap. I need this now! Can I use this now?’ We realized there’s something there — there’s actual demand for this in the industry.”
Today SORO has about a four customers in Washington state who have the used the sales module during its beta. About a dozen more cannabis businesses are taking a close look at the software, Tindall said. He said SORO is making plans to expand to Oregon, California and Colorado, where pot is also legal.
In addition, Tindall said SORO also recently partnered with the online cannabis wholesaler Kush Marketplace.
The company now includes four employees, all working remotely (SORO doesn’t have offices yet) — co-founders Kevin Burkett and Glenn Berry as well as designer Dave Gillett.
Tindall said the nationwide market for cannabis software is currently worth about $164 million in the nine states that have legalized recreational pot and the 20 more that have legalized medical marijuana. That includes around 13,500 growers and processors, he said.
SORO has raised $50,000 in funding so far, Tindall said. According to a presentation he’s sharing with investors, SORO is going after another $850,000 to $1 million from venture capital. The money, he said, will be used to complete SORO’s product lines, which Tindall said will set the company up for a hard sales push, give SORO a valuation of about $10 million and position it for a second angel investment round of $2 million to $3 million.
All of this, of course, fails to mention one key detail: The federal government still considers pot illegal. Attorney General Jeff Sessions has indicated, in a reversal of Obama-era policy, that he may target cannabis companies in states that have made pot legal. And it’s totally unclear how the federal government will respond in the longterm to legal pot.
“That’s difficult,” said Gillian Muessig, the investor and technology executive who co-founded Seattle-based marketing tech company Moz.
Muessig, who has taken a seat on SORO’s board and an equity stake in the company in exchange for serving as an advisor, said Tindall “took a risk to work in a challenged market.”
“From a federal standpoint, I put myself on the line in supporting him,” Muessig said. Still, she said she felt comfortable becoming involved with the company because she trusts Tindall as a CEO. “I thought his management of the risk was appropriate. I had a sense that he wasn’t wasting my time — and wasn’t wasting his time.”
Despite the uncertainty over the federal government’s position, Muessig said she sees SORO as an opportunity to get involved with a fledgling industry that is almost sure to grow exponentially in the years to come.
“That’s what intrigues me about the space — the ability to command the field,” she said. “When you grow a new industry … you have the opportunity to become the Amazon in the field, when there is no Amazon in the field.”
Tindall has noted that Washington Attorney General Bob Ferguson pledged to defend the state’s legal pot trade from federal meddling and that companies like SORO face less risk as an “ancillary business” outside of the core cannabis industry.
Tindall also pointed out that Microsoft, the flagship of establishment technology companies, has partnered with Kind, another software provider serving the marijuana business. That’s just one example of “mainstream” tech money backing the legal pot industry, and those companies are going to fight to protect their investments, Tindall said. To bring down the legal cannabis trade, he said, federal prosecutors would face a daunting tangle of court cases that doesn’t seem worth the trouble.
Rather, Tindall said he expects the federal government to legalize cannabis in all 50 states within the next decade. When and if that happens, he estimates the U.S. cannabis market would be valued at $740 million, at which point big pharmaceutical, liquor and tech companies will dive into the pot business by snatching up companies like SORO.
“Seattle’s a software town. Seattle’s a cannabis town,” Tindall said. “It’s the right confluence of factors.”