Today, more than 40 percent of America’s legal cannabis that’s produced across 20 states passes through Confident Cannabisâ€™ lab testing platform. Through a three-pronged approach, Confident Cannabis is bringing transparency to the cannabis industry, offering a platform to display lab testing results, to connect wholesale buyers and sellers, and to help consumers learn about cannabis strain science and data with the help of a program called Wholesale. The Confident Cannabis app empowers all verticals of the cannabis supply chain to know what products are being made out there and who’s making them, all in real-time. Cannabis producers, processors, wholesalers, and retailers can showcase and discover products from verified businesses, with test results directly from licensed labs.
And as the only platform to do this, Confident Cannabis recently raised $12 million in Series A funding, bringing their total to over $18 million since inception. The round was led by Poseidon Asset Management, one of the most well-respected cannabis venture funds. To learn more about Confident Cannabis, the inception of the platform, where the company is headed, and any tips for cannabis industry aspirants, Civilized caught up with co-CEO Steven Albarran.
How did you get into cannabis?
I’ve been a recreational consumer of cannabis since high school â€” not super heavy, but that’s when it started. In 2014 I was in grad school and I was really interested in all the things that were happening in Washington and Colorado with adult use legalization. That interest turned into a nine-month curiosity and interview process â€” I would interview a lot of operators with my co-founder Tony Lewis. We would go to stores, go to grows, and go to manufacturing facilities across the country. We’d ask people what was hard for them. If we could find a problem that was big enough and common enough that we could solve, we could make a business.
What was the biggest problem that you noticed?
The biggest problem that people kept saying over and over was that doing business with each other was too hard, and the reason it was too hard was that lots of companies were going in and out of business all the time. New operators don’t know who to trade with, and the inventory quality is all over the place. There’s a low trust level, so people stick with people they know. Stores stick with the same people, who they buy from over and over. They don’t want to take a risk with new vendors. When there was a transaction, there was a lot of paperwork and Metric reporting. Payments are hard [with all the] cash management, and the trade itself is cumbersome. As the biggest problem we heard about over and over again, nobody was addressing that problem.
So when did you get started with Confident Cannabis?
It started when we were at Stanford in 2014. That’s when we started thinking about it and then we started the company in 2015. I was studying business management.
How would you describe exactly what Confident Cannabis is?
We can help businesses simplify their wholesale testing and trade â€” that would be the shortest answer. To go deeper, we are an online B2B wholesale platform powered by lab data. If you want an analogy, you can say we are Autotrader plus Carfax for weed.
Can you walk me through how to use the app?
Growers test inventory with labs, and the grower and lab have Confident Cannabis accounts to communicate, order, and share results through. When the inventory comes back with the test results, it’s listed on our marketplace, which has all the info the buyer would want to see. A retailer can see 80 percent of the supply in that market that month â€” vendor name, product category, strain name, THC, CBD â€” kind of like Autotrader. You say you want a used car with 100,000 miles and a two seater, that’s what’s on the marketplace, and retailers can see what’s available, click a button, and order it. When they click a button, it notifies the seller that someone’s interested in the order and they can meet, evaluate the product, negotiate, and do the deal.
So what’s the business model?
The lab testing platform is free for most everyone. The vendors pay us when they accept requests from buyers. They only pay when they receive value, so it’s based on usage.
How many people use the app?
Nationwide, we have 8,000 cannabis businesses that are active users in some way. Our wholesale marketplace is live in Oregon only right now. We’ll be launching it in other places this year. In Oregon, we have about 800ish licensees on the platform, which include retailers, growers, manufacturers, and wholesalers.
What are your plans for the future?
We’re in 22 markets today for the lab testing platform, and we’re expanding into four or five other markets this year: Washington, California, Nevada, Colorado, Michigan, and Arizona.
Which labs do you work with?
We work with 75 labs, about half the labs in the country.
So we’ve written before about one of your subsidiary platforms, Connect. Can you talk a little bit about that?
So Connect is a way for the whole world, not just businesses, to explore the chemistry of [cannabis] flowers. No prices, no dollar signs. Consumers and patients can use it to identify strains of cannabis that are similar to ones they like and depend on, and go buy those on the shelves of their local dispensaries. For licensed cannabis businesses, if you find something interesting, you can click through to the item on our Wholesale marketplace platform. The marketplace is much more about buyers and sellers interacting, but Connect serves to inform both consumers and businesses on cannabis flower chemistry.
How is your platform changing the cannabis industry?
Our tagline is “bringing transparency to the cannabis industry.” The word “transparency” is important to us internally and externally. There are a lot of great producers who make great products, but maybe don’t have deep pockets, who didn’t raise a bunch of money, who didn’t have the biggest sales and marketing budget, but their products deserve to be found and carried in stores. We’re helping people stand out from the crowd when they don’t have a giant sales or marketing budget. Without something like this that levels the playing field, the biggest producers get the most shelf space. We are healing the ecosystem and helping consumers buy the best stuff for the best price. There’s a quote I like: “Sunlight is the best disinfectant.” We’re trying to shed light on what’s being made, who makes it, and what it’s made of. May the best weed win.
How does this help smaller scale cannabis companies?
It facilitates smaller entities getting into cannabis. We’re not anti-big business. Big businesses can and do use our platform and it helps them be more efficient. But it also gives small people a chance. It gives them the ability to stand out from the crowd when otherwise they wouldn’t be able to. I compared us to Etsy [helping] these small crafts people. Before Etsy they had no way to reach an audience.
What kind of insights can you glean out of Connect?
Indica, sativa and hybrid do not indicate how a person will feel on cannabis, so Connect shows that. That’s one of the insights you can glean out of Connect. People use [sativa, indica, hybrid] to describe more or less how you’ll feel, but it’s not a binary, it’s not like it’s just uplifting or relaxing. There’s more to cannabis than that. Is it creative, giggly, paranoid? Just using indica, sativa as the poles is wrong. Connect shows you that with chemistry, the indica, sativa, hybrid filter is all over the map. A few sativas are concentrated in the terpinolene area because terpinolene has a more racy feeling when it’s consumed â€” so people tend to call those things with terpinolene sativas. But the only thing sativa refers to is the shape of the leaves, the shape of the plant. That doesn’t correlate to how you feel or to the chemistry. The industry needs to come up with a better vocabulary.
So if Connect breaks down the indica/sativa division, where does THC come into the equation?
THC is the volume of the song you hear on the radio, and the terpene profile is the genre. So you can listen to classical music loud and hip-hop softly. But the shape and texture of the high and sound is the terpene profile. Everything else, like the other cannabinoids and terpenes, are the equalizer that fills in the texture and shape of the high. Together they’re the entourage effect. The primary actor is THC, unless it’s CBD dominant.
What’s been the most difficult thing about being in the cannabis space and what advice do you have for those looking to get involved?
I would say the hardest thing for someone coming in now is [figuring out] what to do when there are so many different options. You have to think about what you enjoy. If you take away the word “cannabis” and you describe a company you’re interested in working at, is that a company you would like? There are so many different verticals you can go into â€” bring skills from wherever you came from and find a home for it. This industry needs great people. Every new industry needs the best brains we can get.