Data Companies Provide Insight Into Cannabis Industry

By Margaret Jackson Sunday, November 29, 2020

Data has been used by companies across every industry for decades, but when it comes to the cannabis industry it was rarely — if ever — used in the early days because the market was so young.

As the industry has matured, however, it’s critical for companies to have data to help them navigate the ever-changing landscape.

Giadaha DeCarcer, founder and CEO of New Frontier Data, recognized that there was a dearth of data in the emerging cannabis industry, so she founded a company that would collect data and distribute it to cannabis businesses and investors. The data can help investors determine whether a particular category or region is worth pursuing or help a cannabis business measure its performance relative to its competitors.

“We’re bringing mature, technology solutions to an emerging market,” DeCarcer said.

Among the many cannabis businesses that rely on data to make informed decisions is edible maker Wana Brands, a Boulder, Colo.-based company that dominates the market for gummy products. Wana Brands has used data from a few different sources, including Boulder-based BDSA and Bellevue, Wash.-based Headset.

“You can use the data to paint a picture of your demography and target markets,” said Joe Hodas, chief marketing officer for Wana Brands. “For the cannabis industry, it’s really powerful stuff to have.”

Wana Brands looks at larger trends that could affect innovation as well as whether a competitor is taking more market share than it has in the past. The company uses data to determine how to implement better promotions in the stores that carry its products. The company has also developed a series of videos it uses to train budtenders in the stores that carry its products. Data collection can inform Wana whether the videos have been effective in encouraging them to promote its products.

“Because of these disparate data sources that contain these really rich nuggets, we’re going to be hiring a data analyst for this very purpose,” Hodas said.

Mining Data for Operational Efficiency

In addition to looking at the broader market, it’s important for cannabis retailers to look at their own data, which can help with operational efficiencies, said Cy Scott, Headset’s co-founder and CEO. For example, looking at its own data enables a retailer to determine the optimal amount of inventory it carries — you don’t want so much that your cash is all tied up, but if you have too little, you might be out of something your customers want.

“You don’t want to be out of cash because it’s all in inventory,” Scott said. “But as a customer, you may go to another retailer, and they may lose you forever. It’s really around those operational efficiencies — sales trends and staffing trends.”

Because Headset collects data through retailers’ point-of-sale (POS) systems, it sees the information in real-time and feeds it into its market intelligence system.

“We give retailers their data back to them in a better manner,” Scott said. “We really help them drill in and understand what’s performing well for them. We also give them benchmarking tools so they are aware of what’s happening around them and can optimize their own stores.”

Alex Feldman, general manager of New York-based LeafLink Insights, said many of its clients use data to determine whether it makes sense to expand to a new state or how particular products such as flower or vape cartridges are selling. LeafLink Insights, a newly created entity of the cannabis industry’s wholesale marketplace, has a product suite that includes MarketScape and myBI. MarketScape monitors competitive product trends, retailer purchasing habits, order value trends, and brand rankings at the county level in real-time. MyBI is an advanced business intelligence product that allows users to measure their company’s performance against internal key performance indicators while optimizing their organization.

“The value proposition is that the head of sales or an owner can prepare information for a Monday morning sales meeting,” Feldman said. “They’ll be able to tell if they need to focus on different counties or different retailers, and they don’t have to invest in a whole set of data analysts.”

Harvesting Data for Higher Crop Yields

Cultivation facilities vary from company to company. Some are automated; others take a more hands-on approach to growing cannabis.

Regardless of their methods, collecting data from the grow rooms can give a cultivator a better picture of its operation and enable it to better mitigate loss and enhance efficiencies. Data can help a grower monitor and control the environment cannabis plants are growing in, leading to more consistent and higher-quality products.

Key aspects of a grow room that should be tracked include temperature, relative humidity, CO2 concentration, light, vapor pressure deficit, and water content in the soil.

“To create a really solid, high-quality plant, environment is everything,” said Ben Celani, co-owner of High Life Farms, which has a 53,000-square-foot cultivation facility in Chesaning, Mich. “It’s also important for mitigating pests and mold.”

Data also can help your sales force by predicting how much flower you’re producing over what period of time, said High Life’s General Manager Kyle Neathery. If you know how much the plant weighs when it’s cut down, you can predict what your yield will be after it’s dry.

“That helps our sales team forecast what they can sell,” Neathery said. “It helps the entire downstream process.”

Beyond Cannabis

With the cannabis industry projected to reach upward of $25 billion in sales by 2025, there are plenty of opportunities for ancillary businesses to provide goods and services to plant-touching businesses, and data can play a key role in those endeavors, New Frontier’s DeCarcer said.

“There are many opportunities beyond cultivation,” said DeCarcer. “The startup community should not limit themselves to we’re going to grow, process, make edibles. The sky is the limit in terms of how much the industry is going to explode. The industry is ready for sophisticated solutions that we see in more mature industries.”

About the Author


Headshot for author Margaret Jackson

Margaret is an award-winning journalist who spent nearly 25 years in the newspaper industry. She has covered a variety of business topics, including residential and commercial real estate, technology, telecommunications, and cannabis.

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