What does the Advisory sector of the cannabis software market look like, and which company is the market leader in 2020? Cannabiz Media dove into the data in the Cannabiz Media License Database and shared the answers to those questions and more in the Cannabis Software Stack report last month.
Three weeks ago, I launched a new series of articles where I’m sharing more of the details from that report and diving into what the cannabis software stack and license opportunity look like based on each software sector. So far I’ve covered the Back Office , Activity and Transactional sectors.
In our final installment, I’ll take another close look at the report data and see what the Cannabiz Media research team learned about the Advisory sector.
Defining the License Opportunity in Each State
The Cannabiz Media team found 332 unique companies that connect to METRC or Leaf Data Services in Washington, and using the Cannabiz Media License Database, we determined how many licenses they can connect to in those states (i.e., the “license opportunity” or potential addressable market in a state).
To determine this license opportunity, we added Active, Pending, and Applied licenses for the appropriate activity. For example, to come up with the license opportunity for point-of-sale software, we included Active, Pending, and Applied dispensaries and retailers.
The Advisory Sector is comprised of 60 companies. These companies are involved in analytics and consulting. In some ways, this is the capstone group as they help license holders understand the data generated by all the other sectors.
There were two types of companies that fit into our Advisory sector: Analytics and Consultants.
The analytics companies represent some familiar names like BDSA (BDS Analytics), Cannabis Big Data, and Headset. They provide insights to a license holder and use METRC/LDS data as an input.
Consultants, from our analysis, are focused on helping license holders integrate or connect with METRC or to build software and applications.
- We identified 60 companies in the Advisory sector.
- They make 116 connections to the 15 states.
- 30 of the 60 (50%) connect in California.
There are many companies operating in this space, and as of this report’s writing, a fair number seemed to be going offline. Both Virtugro and Jade LLC are analytics firms that have inoperable websites, hence, NCS moved into the fifth slot.
Fifteen companies were identified as providing Analytics. Those in the category connected from one to 11 states. California was the most popular state with 10 connections and Colorado is right behind with nine. Oregon is a distant third with four.
As markets mature and bring on more licenses – and therefore, more data– we may see these companies branch out to states like Michigan and Massachusetts for example.
For license opportunity, we cast a wide net since the reports and analysis can have implications for the whole supply chain.
It’s also important to note that these firms do not necessarily need to have access to METRC or LDS as they can get the information they need from their clients directly. Headset and BDSA report on a wide variety of markets and have clients nationwide.
The Consultant category is a large one and covers companies that may help license holders connect to METRC or design and build software. In our review, we found businesses that are sole practitioners operating in one state all the way up to a national firm with a footprint in 10 states. Only 10 of the 45 were in more than one state.
Fifteen of the 45 vendors are headquartered in California with seven from Michigan and five each from Washington and Oregon. California (20) is the state that most firms are operating in with Oregon (16) a close second.
Why This Information Matters
The information in our report is useful for a variety of stakeholders in the cannabis economy:
- Regulators can gain insight into the size and scope of the software landscape and learn about many of the companies they may be working with.
- Existing vendors can use the information for both competitive and business intelligence – and to find future partners and acquisition candidates.
- Investors can use it as a roster of potential acquisitions or partners for their portfolio companies.
Existing license holders can use it to gauge the footprint of software vendors. With this data, they can see which companies are one-state-wonders.
This wraps up our review of the software stack but the team is reviewing the data for our third Point-of-Sale Software report. We are calling and surveying dispensaries nationwide to find out who they’re using as their vendor, whether they’ve switched, and who they’ve chosen as their CRM vendor.
Cannabiz Media customers can stay up-to-date on these suppliers and other new licenses through our newsletters, alerts, and reports modules. Subscribe to our newsletter to receive these weekly reports delivered to your inbox. Or you can schedule a demo for more information on how to access the Cannabiz Media License Database yourself to dive further into this data and more.
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.