CFN Media Interviews LeafLink
January 3rd, 2018
LeafLink is an online wholesale cannabis marketplace connecting over 1,700 retailers with more than 400 brands in six states. Currently in Colorado, Washington, Oregon, Nevada, California, and Arizona, LeafLink is setting the gold standard in the tech side of the cannabis space. By offering efficient and easy to use systems, this disruptive company is dead-set on industry domination.
CFN Media recently sat down with LeafLink Co-Founder Ryan Smith to discuss the company’s incredibly fast growth and its plans for conquering the cannabis market nationwide.
Rachelle Gordon: What is LeafLink how was the company conceived?
Ryan Smith: LeafLink is the largest online wholesale marketplace for legal cannabis companies. We connect over 1,700 retailers with more than 400 brands across six states – Colorado, Washington, Oregon, Nevada, California, and Arizona. We launched the platform back in March of last year and in the first full month we were live, did $12,000 in orders between retailers and brands. Last month we did $15,500,000 and that’s what our growth has been like. What we’re really focused on doing is two pillars of technology: first is the marketplace and second is order management tools. We are essentially creating a new standard for how transactions are done and processed by cannabis companies.
I started a tech company as a senior in college, which was an investor relationship manager for real estate funds (my family is in real estate). It was basically a way for GP’s to manage LP’s virtually. We sold it to a public company in 2014 that had a quarter of a million investors. We transitioned the team and products over to their larger platform.
Zach was originally a product manager at Limewire and then he started an ad tech company that did arbitrage trading on banner ads. He then sold that company and was at eBay on their B2B enterprise team doing EPI strategy. We got together and began to research in cannabis Colorado, being the most legally mature market. We realized there were these significant challenges around how orders were placed. For example, a purchasing manager or retail stores are texting, literally, 40 companies every week. And then those companies would get those orders and put them on post it notes, or Google sheets, or more text messages to send to the production team, the distribution and the accounting team. So that’s all when we decided to virtualize with LeafLink.
RG: What sets LeafLink apart from potential competitors?
RS: We think it’s of the utmost importance to be as educated and professional as much as we can, because it only gets the space to the next level – and is blowing away any preconceived notions that people might have. We are a great team of people with great cannabis experience, but more with great technological experience. We are a technology company for cannabis firms, not just the cannabis company that happens to do technology. We are pushing this new standard in the space.
We are also dedicated to execution. We are very focused on our team of 23, delivering to the clients more than what we promise, and making sure that we’re really there for the support system for them to run their businesses to, so as they grow, we grow together. That’s our whole MO.
RG: Why should cannabis companies partner with LeafLink?
RS: If you look at other industries, there’s a way their mother or their grandparents did business. There’s a lot of preconceived notions that this is just kind of how it’s done and it can be really hard to disrupt that. But here the difference is that this new industry is growing faster than almost any other, and you can have technology from the very beginning that sets a new standard. Even though there’s regulations and compliance and all these headaches, I think in three to five years, this industry will be looked at by others as an example of a tech-first industry because we can define it as such. The reason to be on LeafLink is if the goal is to be a standard company or it has significant market share, we’re in a position to not only provide those services, but that same kind of progressive mentality of where we all want collectively to be, which is not just another level of a cog in itself, but a leader to other industries as well.
RG: Why should potential investors consider LeafLink?
RS: The kinds of investors that we look for are similar to our team. People that understand the industry deeply, have invested in other companies, and know the challenges that are unique to the space, but then also bring in people that are very familiar with marketplace technologies and scaling a technological operation and general more startup challenges.
So far, we raised a little over $1,000,000 back in December 2015 when we were pre-team, pre-product from investors that we worked with before, so they knew how we operated. In March, we raised another $3,000,000 led by Lerer Hippeau Ventures, which previously invested in Casper, Venmo, and Warby Parker and followed on by Casa Verde Capital, which is a specific cannabis investment company. And our whole focus on that was really beginning to loop in institutional investors, showing that there’s something significant and powerful happening here. So we’ve raised $4,000,000 to date. Additionally, back in November we raised a significant Series A round, the 2nd largest in the industry, that totaled $10 million. This round was also lef by Lerer Hippeau Ventures.
RG: What are your current projections for growth?
RS: We did $12,000 in April of last year and reached $15,500,000 last month. We’re on track by next summer to hit $500 million in GMV transactions, and gross merchandise value of deals done on the platform. This essentially represents 8.5% of wholesale cannabis sold legally in the United States. So that’s our main goal as a company. We hit $100 million in annualized GMV in August and we’re gonna hit $200 million this month. So what took us 15 months to do the first time took us two and a half, three months to do this time, to double that – that’s the kind of growth we’re really pursuing.
We will be in ten new states in 2018. New Jersey, Rhode Island, Massachusetts, and Michigan are very exciting markets. Everyone seems very optimistic about New Mexico too. So we need to keep growing and servicing our clients where they’re going to.
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