Cannabis tech companies can sometimes be hard to understand and evaluate. On one hand, there’s undoubtedly pressing needs within the industry which innovative software can help solve. On the other, so many canna-tech businesses appear looking like “green” clones of broader technology platforms in other industries, or seem unfocused, trying to do it all for every company within the cannabis supply chain.
It’s these typical dynamics that made my conversation with Michael Piermont quite interesting. As President and Chief Revenue Officer at Leaf Trade, a Chicago-area cannabis startup, he’s already operating in fundamentally different territory than many West Coast peers. But it’s the company’s focused mission and measured, customer-led growth strategy that might make it a canna-tech winner in the long-run.
“At our core, we’re always trying to cut down the steps — make things easier, more efficient between wholesale buyer and seller”
Leaf Trade was born out of a straightforward initial mission — streamline operations and communication within the wholesale cannabis supply chain. In contrast to more developed industries, cannabis suppliers and retailers were navigating highly disorganized communications.
Leaf Trade’s solution was, thus, one that might retrospectively seem obvious: replace the hodgepodge of texts, emails, spreadsheets by providing a standardized system to more efficiently manage and execute orders.
While the product set has expanded, this mission (simplifying fulfillment, inventory management, and transacting) remains the guiding focus of what the company is striving to do today.
To Leaf Trade’s leadership, launching in Illinois has been a boon that might’ve been hard to predict. Executing a staged legalization process through legislation, rather than a ballot initiative like other states, allowed Illinois to build deep, collaborative foundations.
While most government regulations can be arduous at times, Piermont believes Illinois’ approach has allowed companies to work together to grow quickly — a belief backed by the success of Illinois-based players like Green Thumb Industries, Verano Holdings, Grassroots, and more. Leaf Trade has been able to scale with this success, as the vast majority of cultivators and 100% of dispensaries in the state now use the platform to transact.
Perhaps more importantly, the company has built their product to grow alongside organizations. As their customers have moved into new markets, they’ve been able to follow. While it helps that many states like Maryland, Ohio, Pennsylvania and Massachussetts operate in frameworks similar to Illinois, Piermont emphasizes Leaf Trade’s ability to grow into varying geographies and new customers across different market structures, as they have with Grassroots in six different states.
This expansion approach has created a true network effect-driven flywheel for Leaf Trade, where their enterprise-scale, multi-state operator customers attract dispensaries in new states onto the platform. In turn, the expanding share in dispensary customers makes Leaf Trade’s solution increasingly attractive to single state cultivators, helping the market achieve “a single source of truth”.
“Whether fully vertically integrated selling to yourself, or high demand markets struggling to figure out who gets what, Leaf Trade is a truly valuable platform in a 360° way.”
For similar reasons, Leaf Trade is now growing into the hemp market. With many cannabis cultivators considering or already operating in hemp, Leaf Trade’s team feels the same natural adjacency in hemp as it has in previous customer-led geographic expansions.
It helps that hemp might be an even better fit for Leaf Trade’s solution than cannabis already is. In contrast to the more focused and highly regulated cannabis markets Leaf Trade plays in, the hemp industry is practically defined by its even more disjointed supply chain — natural farmers, processors, genetics/seeds businesses, large brands, white labels, and more all operating with limited regulatory guidance or best practices.
The move into hemp makes even more sense looking forward. Piermont expects states to increasingly allow hemp CBD in THC products, further blurring the lines between the industries and making activity in both even more important.
However things evolve, Leaf Trade wants to help solve the complicated needs that arise. It’s Piermont’s goal to become the industry standard in making inventory ordering and management more efficient.