CFN Media Exclusive Interview with LeafLink Co-founder & CEO
February 20th, 2020
LeafLink is a B2B marketplace for the cannabis industry, focused on connecting brands with retailers to streamline wholesale ordering. Founded in 2016, this rapidly growing company recently closed a successful series B and has its sights set high (no pun intended). Active in 25 North American territories with more on the way, LeafLink is the place where the industry truly does business.
CFN Media recently spoke with LeafLink Co-founder & CEO Ryan G. Smith to learn more about the firm’s rise to success, their plans for the future, and what’s next for the industry as a whole.
CFN: What is the history of LeafLink?
Ryan G. Smith: My co-founder and CTO, Zach, was previously at eBay and Limewire. Before that, he’d started and sold a company. I started and sold another tech company as well, right before LeafLink, and we started looking at the cannabis space. We both live in New York, and we didn’t have a lot of cannabis experience, but we were excited about the idea of a business to business marketplace becoming the foundation of the supply chain. The cannabis industry was very interesting to us because of its growth potential, but also because it was all still new. It was an opportunity to define (versus disrupt) the way that businesses operate. while empowering brands and retailers in the cannabis space. We wanted cannabis to really become an example of what the most efficient tech-powered supply chain could be
So we made a list of questions. We took all those questions and just basically sat down with whoever in the cannabis space would meet with us to explain what problems they had. The problems varied a lot, but the ones that came up the most frequently – around ordering, product discoverability, transparency – really fit into the concept that eventually became LeafLink, the B2B marketplace.
In 2017, our goal was to move $100 million dollars in transactions through the marketplace. In 2018, it was to move $500 million. And last year, the goal was to move $1.5 billion. We ended up a little above that $1.5 billion by the end of 2019, and now as we enter 2020, we’re facilitating about 27.5% of legal wholesale cannabis transactions in the US.
The team is just around a hundred people now, mostly in New York and LA. We have offices in Toronto, in Denver, and in Austin, and we’re live across 25 different territories. Not surprisingly, the West Coast states are our largest markets, but I think 2020 is going to be a pretty exciting year for newer markets.
CFN: You recently closed your Series B. Tell us about that.
RGS: We closed our series B in August 2019, led by Thrive Capital, a New York venture capital fund. It was a $35 million round, and it was Thrive’s first deal in the cannabis space.
We have a track-record of bringing new faces into the industry, institution-backed parties. We also work with Casa Verde and a couple other cannabis funds, but really want to continue to help the industry go mainstream by bringing in these awesome new partners.
With that Series B capital now in hand, we are focused on continued expansion. We’re opening up 10 new markets this year. We’re seeing opportunities pop up in a number of East Coast markets, which is exciting, but it also depends on how regulations progress. We are exploring some potential international opportunities as well.
We also have been heads down on LeafLink Financial, our platform financing solution, as a way to continue to empower distributors and logistics companies in interesting ways. We want to keep building powerful tools for the LeafLink community, but we’re also getting to explore some new solutions that we know are desperately needed by the space.
CFN: What is LeafLink Insights?
RGS: LeafLink Insights is our data-driven business intelligence product. It provides really in-depth operations information and performance analysis to our clients. We’re beginning to think through some additional tools on top of that, so that companies know where they stand in terms of pricing, product performance, up-and-coming markets, just so people can really focus on continuing to grow. You’ll be hearing a lot more about LeafLink Insights as that continues to develop \and as that team really comes together.
CFN: What do you see ahead for the industry as a whole?
RGS: I think we’re starting to see the maturing of the industry. That means proper guidance on public companies and accountability. If people don’t do the things that they plan to do with the capital that they’ve raised, I think that will lead to issues. We’ll definitely see more layoffs in the short term and I bet we’ll see some bankruptcies. We’ll also see consolidation. I think it’s just growing pains, part of being a new industry. It’s ultimately a good thing.
I don’t think the first half of 2020 won’t feel anything like how positive and fast moving 2019 did, but I think it’s necessary for us to go through these kinds of pain points together so that we can grow the industry..
Eventually, as I mentioned earlier, I think we’ll also East Coast markets emerge. New York plan is to go legal this year. I think we’ll probably see Connecticut and New Jersey legalize too. Seems like Florida is a little bit on the fence right now, at best. But I think we’re going to start seeing even more of the population get access to necessary medicine or products that they want to be able to purchase legally. That’s something that I’m particularly excited about.
CFN: What’s on deck for LeafLink?
RGS: Continuing to scale. I think people will be hearing a lot more about LeafLink Financial in the coming months. We’ve spent a lot of time with counsel, advisors, investors, and our team to build something that we’re really proud of and very excited about. We are just beginning to scale this solution across the handful of markets that it’s in right now (since it’s only in ten of our 25 markets). That’s definitely one of our major themes – growing LeafLink Financial out aggressively this year and bringing it to members of the LeafLink community that we know that need financial tools.
CFN: What else should our readers know about the company?
RGS: I think there’s a lot of interesting things happening right now, both in cannabis and for B2B marketplaces generally. We try not to lose sight of how special and unique our industry is. We really have the opportunity to t become something fresh and new that other industries could emulate down the line. Because we don’t have a lot to disrupt and change, we can define it from the beginning. The industry is the wild, wild West and there are a lot of changes. Some companies go out of business, some companies are raising money. There are always challenges. I think what gets us really excited here at leafLink is that we know we’re doing something in a space that despite its craziness, will surely improve.
We see cannabis as being the model for other growing industries, which are harder to change because they have multi-generational behavioral patterns. That’s just how old legacy industries work. We don’t have that in cannabis. So I think that’s the opportunity and something that we’re really excited about beyond. I think the progress we make here, by doing things like continuing to embed financial solutions and logistics tools, are all pretty new. I’m eager to see how transformed the space is a few years from now.
This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.
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