Cannabis legalization is creating a tech revolution, reshaping understanding of the plant and the technology around it, which is now expected to impact mainstream producers, distributors and consumers for years to come.
Since the U.S. government outlawed cannabis in 1937, most modern industrial, agricultural and marketing innovation had been denied to the industry. For decades, growers, processors and retailers hid in the shadows and used antiquated practices to survive in the black or grey markets. In fact, even today, mature marketing practices, associated tax exemptions, payment processing solutions, enterprise resource planning solutions (ERPs) and other mainstream tech solutions remain inaccessible to most legal cannabis operators across North America.
Plato wrote that “necessity is the mother of all invention,” and indeed need does birth innovation. The global wave of cannabis legalization and decriminalization is now fueling an unexpected socioeconomic revolution and technological innovation boom. Particularly across 29 states and the District of Columbia in the United States as well as Canada, cannabis operators today are not only quickly catching up to cutting-edge technologies across every adjacent industry of relevance, they have now also kicked off their own wave of technological advancement in both agricultural and industrial applications across data processing, intelligent lighting, consumer behavior understanding and bio-sciences, to name a few.
As the founder and CEO of New Frontier Data, an analytics company focused on the global cannabis market, I have witnessed many of the technological changes that have redefined the industry in recent years.
The inclusion of new technologies throughout the supply chain is powerfully impacting the industry’s operational efficiency. Computer-linked sensors in cultivation facilities monitor and provide real-time adjustments to the light, heat, humidity, carbon dioxide, water and nutrients which plants need. App-enabled vaporizers adjust accordingly for the type of product being consumed and can track consumers’ dosing and routines. Virtually every aspect of the cannabis industry is ripe for technology-based innovation and disruption.
MyDx — a company that shares data with New Frontier — is one such company that is changing the market with data-driven science that makes it possible for consumers using a handheld smart device to test cannabis products for potency and unwanted foreign compounds even while tracking the efficacy and effects of what they consume.
Companies like Releaf and Strain Tracker allow medical cannabis patients to record their experience, from the efficacy of pain management to the energizing or soporific effects of each treatment. Patients can track the varying effects of the prescribed strains while the aggregated data can help cultivators and dispensaries offer the most effective products.
The city of Denver has a reported 4.2 million square feet of warehouse space devoted to growing cannabis. All those indoor grow facilities need lighting. Denver Relief Consulting hired a former NASA scientist experienced in lighting technology for long-duration space missions that mimic the sun, saving up to 40% on electricity and cooling. The light quality significantly increases cannabinoid production.
Additionally, improving the quality of light for a plant significantly increases its cannabinoid production. Many LED companies report significant gains in tetrahydrocannabinol (THC) levels in plants grown under LEDs: The improved potency, coupled with lower energy costs, enables growers to produce higher-quality products for less.
Customer Intelligence Platforms
Companies like METRC, MJFreeway and BiotrackTHC whose seed-to-sale tracking solution is mandated in some U.S. states, have become linchpins to an increasingly data-driven ecosystem. New levels of customer intelligence are being facilitated by online platforms like Green Rush (data share), allowing dispensaries to manage product inventories online; while customer-loyalty platforms like Baker are enabling both retailers and producers to understand and segment target customers in a highly nuanced and sophisticated manner.
These data-based platforms are designed to micro-target consumers based on their detailed shopping habits. Data helps retailers tailor discounts based on supply and demand while predicting which products people will try based on macro-purchasing trends.
Lab-testing companies such as Steep Hill Labs, an investor in New Frontier, have broken new ground in shaping and understanding product-quality and the cannabis plant potential.
Other laboratories like Franklin BioScience are focused on creating strict industry standards to provide pure cannabinoids, free from chemical contaminants that can prevent cannabinoid absorption and bioavailability.
While the research on the effects and efficacy of individual cannabinoids remains nascent, there is growing data to correlate patient health outcomes to specific product cannabinoid and terpene profiles. While much of the initial focus has been on the medical properties of THC and cannabidiol (CBD) (the two main cannabinoids), other cannabinoids appear to have compelling health effects. For example, the anti-anxiety and sedative effects of cannabinol (CBN) rivals that of diazepam (Valium) while the appetite suppressing effects of tetrahydrocannabivarin (THC-V) could present compelling and potentially disruptive opportunities for weight loss products.
In November 2017, MMJ International Holdings filed for a U.S. patent on a cannabinoid treatment for multiple sclerosis (MS), and the FDA just approved GW Pharmaceuticals’ billion-dollar investment in Epidiolex for treatment of epilepsy.
Cannabis legalization is in effect now, causing both a social and innovation revolution: We are witnessing a technology-driven transformation that may reshape the understanding of and experience with not only cannabis but other mature industries for years to come. As California rolls out its statewide, legalized, adult-use cannabis market, it will be a crucible for technology and innovation, providing state-of-the-art solutions through the reintroduction of a legal commodity with agricultural roots dating back approximately 12,000 years.
By: Giadha Aguirre De Carcer, Forbes