Marijuana And Technology Combine For Reefer Radness

The exciting combination of marijuana and tech is helping to normalize the industry one megabyte at a time.

Tech entrepreneurs are into marijuana, and I don’t mean like how Bill Gates was into marijuana. I mean as an investment. Tech investors and tech startups constantly contact my law firm with, or looking for, a new marijuana technology idea or platform. Product traceability, consumer support, market tracking, commodities exchanges, data support for cultivators and processors — both software and hardware companies are actively looking for ways to participate in the cannabis market.

As an ancillary service, technology is less scary for financiers than investing directly into a business that violates the federal Controlled Substances Act. Market entry is also easier because, though some states employ regulations to deter investment into businesses that deal directly with marijuana, typically “robust” state regulations don’t affect outside tech providers. Banking, taxation, and fundraising are all a little easier for these ancillary businesses. The IRS treats technology companies in the marijuana space much better than cannabis companies, and the United States Patent and Trademark Office is more than willing to allow tech companies to register their trademarks.

And in case you think I might just be blowing smoke about “CannaTech,” here is a sampling of some of the companies currently populating the ever-expanding marijuana marketplace:

  1. Weedmaps has been a staple in the cannabis ancillary economy for a number of years now. Often called the Yelp of marijuana, Weedmaps is “[a] free . . . service that maps out local marijuana dispensaries in states across the country. Registered users of the site can leave reviews and ratings for different dispensaries with the ultimate goal of helping others find the best weed in town.” As of May 2014, the company’s website “has more than half a million registered users and accommodates four million unique visitors per month.”
  1. It’s finally here — the phone app that tells you if you’re THC-impaired. Through a series of memory, balance, reaction, and time perception tests, the app can allegedly determine if you’re impaired. The science behind “My Canary” can be found here. With new state marijuana laws that maintain strict DUI standards for relatively low thresholds of active THC, “My Canary,” if truly effective, could prove to be a useful tool for consumers (though Canary currently disclaims relying on its app to determine whether you should drive or not if you’re stoned).
  1. Looking at payment platforms to avoid paying cash at a dispensary? PayQwick is one of several companies that offer this service, but they may be the first company to actually register those services under its state’s (Washington’s) money transmitter licensing schemes. In addition, according to its website, PayQwick is working on the technology to allow consumers to pay for their pot with their smart phones and there should be an app coming soon.
  1. If Weedmaps is the Yelp of marijuana, Leafly is the WebMD. Leafly describes itself as “The World’s Cannabis Information Resource” made up of marijuana dispensary and strain reviews. By clicking on the site’s “Strain” tab, you can search volumes of information about “Flavors, Effects, Symptoms, and Conditions”; you can also locate on Leafly your neighborhood dispensary (in multiple states) that carries your favorite strains and products.

Sponsored

  1. Billing itself as the Instagram of marijuana, Denver-based Massroots maintains an app that “allows its 275,000 semi-anonymous users to post pictures of themselves smoking marijuana without the potential repercussions of doing so on conventional social sites.” Essentially, Massroots is a social media platform for its users (and marijuana businesses) to unite over their common love and interest in cannabis, regardless of state lines. And Massroots is serious about its staying power. Through the power of lobbying and persuasion, Massroots pioneered a big victory against Apple in February 2015 where the tech giant originally refused to allow Massroots (as well as other marijuana-geared apps) to offer its free app in its App Store.

But even cannabis-tech companies are not entirely immune to the business and financial headaches that befall marijuana-related commerce. For example, Facebook, Google, Apple, and Twitter (just to name a few) seem committed to shutting out any cannabis-related business, ancillary or not. Moreover, just like businesses directly involved with the plant, software companies are often constrained by having to deal with the laws of multiple states and with the fact that cannabis is not yet legal nationwide. It’s not often that you meet a coder who loves digging into the minutiae of different state regulatory regimes, but tech companies that offer services in multiple states generally need to have a pretty good understanding of the regulatory scheme in each of the states in which they operate. And, likely worst of all, a zealous U.S. prosecutor could also argue that cannabis tech companies do violate the federal Controlled Substances Act by aiding and abetting marijuana businesses — though no U.S. prosecutor has made such an argument. And financial institutions sometimes get cold feet in dealing with marijuana tech companies that depend on payments from marijuana entities.

The combination of marijuana and tech is exciting not only for the changes it is bringing to the cannabis industry, but because it is helping to normalize the industry one megabyte at a time.


Hilary Bricken is an attorney at Harris Moure, PLLC in Seattle and she chairs the firm’s Canna Law Group. Her practice consists of representing marijuana businesses of all sizes in multiple states on matters relating to licensing, corporate formation and contracts, commercial litigation, and intellectual property. Named one of the 100 most influential people in the cannabis industry in 2014, Hilary is also lead editor of the Canna Law Blog. You can reach her by email at hilary@harrismoure.com.

Sponsored

CRM Banner