This article originally appeared on The Cannatech Group website.
By: Tyler Wells, North American Sales Manager at MicroTouch
The cannabis technology, aka “cannatech,” market has resellers seeing green. Analysts forecast the $10.8-billion-plus market for explosive 14.9% growth through the end of the decade. And because many cannabis business owners need your expertise to establish processes that allow them to operate efficiently and profitably, your value-added reseller (VAR) company has the opportunity to grow your business – if you know what it takes to break into this market.
Make Trust the Center of Your Strategy
Whether it’s justified or not, there’s still a bit of a stigma attached to the business of selling cannabis, a product some might associate with less-than-savory activities. Because cannabis is subject to different opinions and statuses in each state vs. the federal government, many business owners won’t jump into a deal with just anyone.
You’ll also find that because of those perceptions, some cannabis retailers will build their business on providing medicinal products rather than recreational ones. However, VARs need to realize that in either case, cannabis business owners are very professional and need technology to support their businesses.
How you approach prospects, the respect you show them, your professionalism, and your business’ reputation will all factor into whether they choose your company for the cannatech solutions they need.
In the Weeds with Legislation and Payments
VARs also need to understand the patchwork of cannabis legislation across the U.S. to sell into this market. Although federal lawmakers have yet to legalize cannabis, state-level legislation has given some businesses the go-ahead to sell recreational or medical cannabis. Because the laws governing one state may not apply to another, many cannabis business owners are wary about partnering with tech providers who don’t demonstrate that they know the ins and outs of legislation in their state.
Colorado, for example, was among the first movers to legalize cannabis for medical use in 2001. But operating compliantly in Colorado isn’t the same as legal operations in Maryland, which only legislated the use, distribution, regulation, and taxation of marijuana this year. This, of course, is just the broad strokes. Each state has its own granular rules on how much cannabis someone can hold before it qualifies as a felony. And what counts as a prescription-worthy medical condition is far from uniform from one state to another. That’s why only the VARs and resellers who do their homework and study up on the rapidly evolving cannabis sector will position themselves to win new business. Furthermore, cannabis legislation is continually changing. You must stay informed of changes in law and ensure the solutions you provide help your clients stay in compliance.
Another cannabis industry challenge that VARs need to understand is payments. Because the federal government has yet to legalize cannabis, some financial institutions worry that doing business with a cannabis retailer or dispensary might be risky or even perceived as money laundering. This requires you to help them find ways to legally accept digital payments or manage the large volumes of cash that these clients handle day-to-day.
Also, remember that there are no shortcuts or workarounds. Don’t attempt to deploy payment solutions without full disclosure about clients to payment companies about where and how they’ll be used. Your cannabis business clients need good advice from an ethical provider. They don’t want to work with a provider that will give their dispensary or shop a bad name.
Building Cannatech Expertise
So what’s the best route to success? Focus on mastering how to provide solutions to businesses in one state and build from there. Use your point of sale (POS) technology know-how to craft solutions tailored to the nuances of managing cannabis transactions. Additionally, understanding how to use technology to streamline other processes for these businesses will strengthen your value proposition.
For example, cannabis business owners are responsible for tracking products from seed to scale down to a fraction of an ounce. This means clients need more than standard POS software and touchscreens to operate. Their businesses can also benefit from barcode or RFID technology, label printers, scales, self-service kiosks, physical access control solutions, inventory control software, digital menu management, digital signage, and reliable infrastructure to support it.
Your success in this market depends on your ability to provide everything your clients need – whether by expanding your line card or by partnerships.
Too Big to Ignore
The cannatech market has too much potential for you to sit on the sidelines and miss out on the chance to grow your business significantly. Furthermore, pending federal legislation could soon ignite growth in the market, and a $100 billion cannabis market isn’t outside of the realm of possibility. You also have the opportunity to provide solutions to growers, transporters, and distributors, as well as retailers.
The time is now to learn about this market and its needs, develop solutions, and establish yourself as a cannatech provider and thought leader. Adapting to this niche will help you light up opportunities to become a trusted partner in the next big industry.
About Tyler Wells
Tyler Wells is the North American Sales Manager for MicroTouch. Since joining the company in July 2021, he has focused on developing sales and implementing the US distribution strategy. He brings over 14 years of experience in the built-for-purpose computer hardware and sports entertainment industry. Prior to joining MicroTouch, Tyler served as the Global Distribution Sales Manager and Manager of Business Development at Mimo Monitors, Marketing and Business consultant for DYT Solutions, and Inside Ticket Sales for Red Bull. Tyler has a degree in Marketing Management from the University of Wyoming.
