Big business can smell money, and in the case of Microsoft, the sweet smell of success smells a lot like marijuana. This is not a joke, the Microsoft and Kind Financial partnership is a monumental step forward for the cannabis industry.
Microsoft Cannabis Software Tracks Seed To Sale Marijuana Transactions from CannabisNet on Vimeo.
With 25 US States having legalized marijuana in one way or another, to date, corporate America has stayed away entirely. Marijuana, after all, is still illegal, according to the federal government. Unitl now. Microsoft is breaking the corporate taboo on pot this week by announcing a partnership to begin offering software that tracks marijuana plants from “seed to sale,” as the pot industry puts it.
The software — a new product in Microsoft’s cloud computing business — is meant to help states that have legalized the medical or recreational use of marijuana keep tabs on sales and commerce, ensuring that they remain in the daylight of legality.
It is apparent now, though, that the legalization train is not slowing down: This fall, at least five states, including the biggest of them all — California — will vote on whether to legalize marijuana for recreational use.
Microsoft’s baby step into the business came through an announcement on Thursday that it was teaming up with a Los Angeles start-up, Kind, that built the software the tech giant will begin marketing. Kind Financial — one of many small companies trying to take the marijuana business mainstream — offers a range of products, including A.T.M.-style kiosks that facilitate marijuana sales, working through some of the state-chartered banks that are comfortable with such customers.
Stores that sell pot have been particularly hobbled by the unwillingness of banks to deal with the money flowing through the industry. Many dispensaries have been forced to rely on cash for all transactions, or looked to start-ups like Kind, with its kiosks that take payments inside dispensaries.
Microsoft will be working with Kind’s “government solutions” division, offering software only to state and local governments that are trying to build compliance systems.
The company’s entry into the government compliance side of the business suggests the beginning of a legitimate infrastructure for an industry that has been growing fast and attracting lots of attention, both good and bad.
With infinite collboration opportunities between tech start ups and the marijuana industry, Microsoft’s willingness to attach its name to any part of the business is a big step forward for the young and eager legalized weed industry.
David Dinenberg, the founder and chief executive of Kind, said it had taken a long time — and a lot of courting of big-name companies — to persuade the first one to get on board. Microsoft has put a lot of emphasis on its cloud business, Azure. The Kind software will be one of eight pieces of preferred software that Microsoft will offer to users of Azure Government — and the only one related to marijuana.
It’s hard to know if other corporate giants have provided their services in more quiet ways to cannabis purveyors. There appears to be little precedent for a big company advertising its work in the space.
Twenty-five states have now legalized marijuana in some form or another, with Pennsylvania and Ohio the most recent. The biggest business opportunity, though, will come from states that allow recreational use of the drug, as Colorado, Oregon and Washington already do.
This fall, five states — including, most significantly, California — will vote on whether to join that club.
Mr. Karnes, the analyst, said he expected legal marijuana sales to jump to $6.5 billion this year, from $4.8 billion last year. He says that number could climb to $25 billion by the year 2020 if California voters approve the recreational measure this year, as is widely expected.
The opening up of the market in California is already leading to a scramble for the big money that is likely to follow, and Microsoft will now be well placed to get in on the action. In fact, many believe that legalization will actualy help the econony - and Microsoft wants in on that!
If you are the investing type, check out “Kind”. This is a company worth investing in and getting on board with.
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