Regulatory compliance has been one of the greatest hurdles, especially in California, to entering the cannabis industry, let alone surviving or thriving in it. Due to the cost of getting licensed and the confusing nature of California’s new regulations, many canna-businesses have had to shut down.
To help alleviate such woes, Marion Mariathasan co-founded Simplifya, a software system to help cannabis businesses self-audit and stay compliant with the ever changing landscape of marijuana regulations in California and around the country. Having come out of the tech space (in addition to owning the boutique tequila brand Demetrio), Mariathasan hopes Simplifya’s software will boost the rate of licensure in the cannabis industry. In sticking to this goal, Simplifya just rolled out services to California, and aims to be the tool of choice for at least 70 percent of the national cannabis industry. MERRY JANE caught up with Mariathasan to learn more about how the software works.
MERRY JANE: So what’s the elevator pitch for Simplifya, and how do we pronounce it?
Marion Mariathasan: Simplifya (pronounced Simplify-uh) is a regulatory and operational compliance company. We’re a software company. We take state and local regulations and simplify them down, so the can be understood by any type of individual. We turn them into yes or no questions within our software, so licensed businesses can self-audit and make sure they’re playing by the rules that have been set forth by state and local regulators. Our ambition is to be the hub for operational and regulatory compliance. From auto license renewals to document management to standard operating procedures and background checks, anything that falls under the compliance umbrella, we’re building into our system.
Does it work for businesses in any state?
Correct. We launched a year and a half ago in Colorado. We were there for a year, getting everything sorted out, as you can imagine for any sort of start-up tech company. Now we just opened up in California. We have L.A. County, Santa Ana, a bunch of different local jurisdictions within our system. We’re also launching in New Mexico, Arizona, Nevada, Washington, Oregon, and then in Q3 of this year, we’re going to the east coast — New York, Massachusetts, Michigan, Florida. Our goal is to be in every state (with medical or adult-use cannabis laws) by the end of this year, and then go international starting early next year.
Do people use Simplifya while they’re putting together their licensing applications, or only after they’ve been licensed?
In California, they’re doing it in tandem. When the regulations came out, we had it ready for the businesses. While they’re doing applications, they’re using it as a way to get ahead of the game. They’ll also use it after the applications have gone through on a monthly basis. We work very closely with banks and insurance. There are banks that mandate that Simplifya be used if they want to bank their money. On the insurance side, Skytree insurance and Cannasure give a 10 percent discount if businesses use it, because it’s a risk mitigation tool.
What’s the platform for Simplifya?
It’s a web app and a tablet app. There are people who use it on day-to-day basis. It’s not just a compliance software; we actually have a feed within Simplifya. If a business has multiple locations, they use it as a way to communicate within different locations and among employees. If they know there’s an issue with security cameras, for example, someone who does the audit can [message], “Hey, there’s an issue, get it fixed.” We recommend people do self-audits on a monthly basis. State and/or local regulations change, so to be on top of it, people do it on a monthly basis, so they can have audit reports handy and available if regulators walk in.
How does the audit process work?
It’s all broken down by category, such as security, advertising, packaging, or labeling. All the different categories are broken up; they can skip around. It’s a checklist. We’re trying to get [businesses] to honestly answer them — you can’t finish the audit report without answering all the questions. At the end, it tells you where you’re not compliant, and it tells you how to rectify areas that are noncompliant.
How much does the software cost?
The pricing varies state by state. In California, the state checklist is $80, and a local [checklist] is $49 per jurisdiction; $10 for each additional. It’s a monthly payment. We want this industry to thrive, so we try to keep price point manageable and cost-effective so it doesnt put a burden on these businesses, but makes them more efficient.
Which aspects of the industry are using Simplifya?
We have every type of license user. Anyone who has a license Simplifya should be their tool of choice.
How is Simplifya funded?
I was one of original investors; I’m also CEO. We raised three rounds: a Founders Round, Series A, and we just closed Series B. In total, we’ve raised $4.2 million. So we’re backed by private equity, venture groups, and family offices.
Was it difficult raising the money?
Surprisingly it wasn’t. Everyone realizes that operational compliance in the regulated industry is one of the key elements to have the entire industry succeed. Some of the top investors in the industry are behind Simplifya: Media Capital out of New York was the lead on Series B, and Hyper Ventures was the lead in our Series A. When you’re dealing with so much regulatory content, there’s a lot of value in what we do. Investors see value in what we’ve done so far and where we’re headed.
-Madison Margolin, Merry Jane