Toronto companies looking for global profits with marijuana software
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Amid the buzz of a burgeoning medical marijuana industry, Toronto tech companies are passing over pot for the potential windfall of marijuana software.
While medical marijuana growers are looking to cash in on an industry expected to reach $1.4 billion in Canada by 2024, these software companies have their eyes set on a U.S. market already worth $2.3 billion and global markets beyond that.
Ample Organics only launched its seed-to-sale software in January and already the company has doubled in size and landed Aphria Inc., one of only three publicly-traded licensed marijuana producers in Canada, as its newest client.
“That’s a huge one for us,” said president John Prentice, 30.
Even so, the Canadian market is “tiny” compared to the U.S., he said, and Ample Organics is pitching Oregon State to provide their entire state tracking system, with plans to officially launch in U.S. in May. The company also has “feet on the ground” in the Bahamas.
Grow One, another Toronto-based company promising to “manage virtually every aspect of your production,” also has its sights set south of the border.
The company raised $1 million to work with five licensed producers, six applicants, a lab company and consultants to perfect its system before launching, said Peter Barbosa, 26, Grow One founder and CEO.
“This is just the start of something big,” Barbosa said.
“Canada is a small market,” he said, and the company is “excited” to jump in the U.S., where 23 states allow medical marijuana.
Prentice and Barbosa both founded their companies after realizing that existing software wasn’t set up to handle the complex regulatory world within which growers will have to operate.
Entrepreneurs face numerous hurdles beyond growing good pot. Health Canada’s stringent regulations include careful monitoring and quality controls on the products. Companies also have to manage the sales, shipping and customer relations and must also comply with Health Canada audits.
“We have the strictest regulations on medical marijuana anywhere in the world,” Prentice said. “The reporting capabilities and record keeping requirements are extensive.”
Barbosa warned the industry is still in its infancy. He said Grow One wants to be the best software on the market — not the first.
But Prentice thinks 2015 will be a crucial year for the medical marijuana industry.
“This is going to be the year the doors close on companies that want to work with licensed producers,” he said.
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